It’s a sure sign that you deal in expensive rocks when your cutting facilities have been made seismic resistant.
“So that if there’s an earthquake, it won’t damage the stone,” explains Hugues Jucker, international sales director for the London-based, family owned Graff Diamonds.
Sitting in Graff’s Melbourne boutique, with an array of blindingly bright jewels on black velvet trays before him, Jucker is talking about the two or three stones of 100 carats-plus that Graff cuts and polishes each year, then shares with great fanfare with the media, then discreetly sets about selling.
Like the Graff Venus, announced to the world in early November. Weighing 118.78 carats and cut from a 357 carat rough diamond discovered last year at Graff’s South African mine, it’s the largest D colour, flawless heart shaped diamond in the world. According to the press release trumpeting its arrival, it took 18 months from discovery through analysis, cutting and polishing to completion.
Announcements like this are a potent way to remind the market of the quality of what Graff digs up, and the virtues of a vertically integrated business in which the Graff family controls everything from the South African mine that provides 10 per cent of its diamonds, to the cutting and polishing of those diamonds in its Mayfair headquarters, to the creation of the jewels into which those diamonds go, and finally, to the retailing of said jewels to the world’s extremely wealthy.
“You don’t know if you’re going to sell it or not,” Jucker says of these hero diamonds. “This is what I admire about the Graff family – they aren’t frightened to take immense risk. In fact it’s a calculated risk; they have the experience, the clients, they know what they’re doing. But it’s really a risky business and if you don’t like risk, you’d better not be in it.”
Graff's appetite for risk
Founder and chairman Laurence Graff obviously likes risk. Raised in London’s East End, in part by his Russian Jewish grandparents while his tailor father was away at war, Graff started out in the diamond business when, at 15, he got an apprenticeship with a jeweller in London’s Hatton Garden. Sick before long of scrubbing floors and being told he would never amount to anything, he moved to another jeweller, only to have it go bankrupt.
At this point, aged 17, Graff went into partnership with an older, more experienced jeweller. But according to the 2015 book Graff, that jeweller “lost his nerve when the business accumulated debts of some £3000” with the firm’s gold caster and stone dealer.
Writer Vivienne Becker says Graff took on the debt himself, “persuaded his suppliers to continue trading with him and repaid the debt in just six months”. He was all of 22.
It was in 1960 that Graff Diamonds officially launched, and 1968 when it opened its first boutique in London. Its founder continued taking risks over the coming decades, including buying the entire suite of pink diamonds from Argyle’s first tender in the 1980s, setting the stones in a flower brooch and promptly selling it to the Sultan of Brunei.
Laurence Graff is credited with changing the perception of yellow diamonds from the poor man’s white diamond into something worth paying a premium for. An avid art collector, his is often the name that emerges when a whopping stone – or perhaps a Picasso – sets a new record price at Christie’s or Sotheby’s.
Curious, then, that it took until the year 2000 for Graff to open its first store outside London, in that case in Monte Carlo. It has made up for lost time in the 16 years since though, with 55 stores now dotted around the globe.
Graff expands markets
“Mr Graff had always travelled the world,” says Jucker, who joined Graff in 2014 after working for Yves Saint Laurent and Chopard. “He understood the opportunities and decided to go full steam ahead. So now we have 10 stores in America, in Asia we have 20, Europe we have 10, the Middle East six, and in Moscow we have three.”
This year alone Graff has opened stores in Saudi Arabia, Oman, Houston, Texas, Macau and, in January, in Melbourne. Tastes vary according to market.
“Typically clients in the Middle East look for size rather than quality. But you come here with Asian clients from China or Japan and it’s the other way around; they go for quality over size – so it might be a bit smaller but of the very top quality,” Jucker says. “It’s the same in Russia, where you can’t sell anything there below F or G colour.
But you can’t make a rule, it’s about to whom you sell. If you sell to a sheikh or princess who has always had the best, they’ll want the best from you, too.”
Forty of Graff’s stores are owned by the company, with the remainder opened in a franchise arrangement with a local partner. The Melbourne store is in the latter category, a partnership with Emerald Group Investments. Itself a fast-growing family business, EG Investments has exclusive arrangements to retail Loewe and Bang & Olufsen in Australia, as well as operating Rolex boutiques and selling other luxury brands, from Cartier to IWC and Patek Philippe, through its multi-brand Kennedy boutiques.
Asked what the optimal number of Graff boutiques is worldwide, Jucker says between 60 and 65. “We want to remain exclusive. We don’t want to be everywhere.”
Chinese New Year
Situated in the gilded lobby of Crown Towers, the Melbourne boutique opened in late January in a bid to capitalise on Chinese New Year. Jucker says it’s done better than expected and that while some of the clients are tourists, there is more business from local clientele than you might think.
Jucker arrived with a bag full of high jewellery pieces to show to clients at a cocktail party held in the Crown Chairman’s Villa. The two biggest sales, which between them came to more than $1 million, were to a West Australian couple and a couple from China who spend much of the year in Melbourne. Jucker confirms they are actively looking for a Sydney site to complete Graff’s Australian presence.
Graff is not the only international jewellery house paying attention to an Australian market that for decades was serviced only by Australians buying abroad. Chopard and Van Cleef & Arpels are other recent arrivals, while existing players from Cartier to Tiffany and Louis Vuitton have upped the ante in both their boutiques and the quality of jewels they are bringing here.
The interest reflects the sustained affluence of Australia at a time when other parts of the world are doing it tough. Not that those buying at the Graff end of the market are too fussed by market gyrations. Entry level is about $US10,000 ($13,000), with an average sale $US200,000 to $US300,000.
“These people are affected but not in the same way,” Jucker says. “It’s more psychological – it depends if they’re in the mood to spend, and this can vary from country to country, day to day.”
Graff entered the watch market in 2008. At a time when sales of Swiss timepieces have come off sharply, being a jewellery house that sells watches rather than the other way around has its advantages. “The attention and energy for all these luxury groups was mainly put into watches and they maybe disregarded jewellery a little bit,” Jucker observes. “But with us it’s a different proposition because for Graff, 80 to 90 per cent of our business is the jewellery.”
While Laurence Graff is still very much involved with the company, its day-to-day operations are now run by his son, chief executive Francois Graff. Working for a family can have its downsides but Jucker says he likes it. “I like to report to the owners. It’s a privilege. They are the success makers, and they have the vision,” he says.
“There is stability and there is consistency. I like to work in this environment.”
The AFR Magazine Jewellery special is out Friday November 25 inside The Australian Financial Review.
