New York Diamond District, Part 2

Diamonds are sold on diamond exchanges called bourses. There are 28 registered diamond bourses in the world.  The World Federation of Diamond Bourses  (WFDB) was founded in 1947 and united all diamond exchanges under  roof. 

New York bursa is named DIAMOND DEALERS CLUB (DDC). DDC was found in 1931 when a group of   diamond dealers gathered together in an office in lower Manhattan, where at the time New York’s diamond business was centered.  

According to New York legend, a diamond was dropped and apparently lost, when two diamond dealers were examining it.  Later missing diamond stone fell from a pants cuff of one of the dealers. At that point, it is told, he concluded that American diamond dealers should follow the initiative of their European colleagues and organize a secure facility in which to conduct business. In 1993 DDC moved  its offices and trading platform to  580 Fifth Avenue, at the corner of 5^th avenue and 47 street.

The first building had 11 floors and was built in 1925.  In 1929 famed architects of their era, Warren & Wetmore ( they built Grand Central Station)    were hired by the owner   to design a 33-story Art Deco building, to be known as the Empire Trust Building. 580 had to be built on top and around the original building. Once completed, 580 Fifth Avenue became one of the tallest buildings in New York City.DIAMOND DEALERS CLUB  has its own synagogue  and a  kosher luncheonette.  Business in the DDC is conducted using rules that have been around for generations.  

The deals are based on honesty and trust and there are no written contracts.  DDC bylaws state that  “Any oral offer is binding among dealers, when agreement is expressed by the words ‘Mazel and Broche’ or any other words of accord.” 

 DDC become the first official diamond exchange to launch a first fully functional online diamond trading floor in 2011.

New York headquarters  of the Gemological Institute of America (GIA) , the world’s largest gemological institute,  was  located at the same building as  DDC. GIA is the inventor of the “four C’s” (cut, clarity, color, carat) and educated consumers know to request GIA certification.  

 The institute  has 11 campuses and nine laboratories in 14 countries and serves as the standard-setter for the jewelry industry.

In June 2013 one of the most productive developers   Extell Development Co  opened   Gem Tower skyscraper on West 47.  As of July 2013, more than 80 percent of a three-story space in the building dedicated to a shopping center for precious gems had been leased.  Gemological Institute    acquired three full floors and nearly 80,000 square feet of space in the newly built   skyscraper. 

Gary Barnett  (Gershon Swiatycki ) is President and founder of Extell Development . His father Chaim Swiatycki was a rabbi and Talmudic scholar. Barnett began his career as a diamond trader in Antwerp, Belgium in the 1980s. I wrote about one of the latest Extell developments building, New York's tallest residential  building One57, in one of my old posts.

New York Diamond District, Part 1

Almost 80% of the world's diamonds are sold in New York, in Diamond District. A year-long study that was done several years ago found that jewelry, diamonds and gold were three of New York State’s top four exports.

The name diamond is derived from the ancient Greek αδάμας (adámas)  -  “unbreakable”   and have been treasured as gemstones since their use as religious icons in ancient India.  Most natural diamonds are formed at high temperature and pressure at depths of  87 to 120 miles  in the Earth's mantle. The diamond is uniquely resistant to damage by heat or scratching, and can be cut or polished only by another diamond. The mid-nineteenth century discovery of diamonds   in South Africa sparked the world's biggest diamond rush.

There are a limited number of commercially viable diamond mines currently operating in the world.  There is only one   non-commercial diamond mine - The Crater of Diamonds, an Arkansas State Park  that is open to the public.

Diamonds were very popular in the middle ages.  Many large and famous stones   such as the Koh-I-Noor and the Blue Hope were found in India at that time. You can read about Blue Hoope - the Moonstone in one of my posts.

Until the mid-1940s the jewelry trade was headquartered downtown, at Maiden Lane. In  1923 Fenimore C. Goode, a broker, promoted construction of a new building at 20 West 47th Street specifically to tempt the Maiden Lane firms to move.

There are more than 4,000 independent businesses in the Diamond District now, and nearly all of them are related to diamonds or fine jewelry. This block brings in $24 billion a year to New York. The district employs 22,300 workers, and another 10,000 if you include indirect employees.

 About 95% of the traders and workers are Jewish and many are Hasidim. During the Spanish Inquisition of 1492 the Jewish diamond merchants had to leave Spain and set up shops in Amsterdam.  Because diamond cutting required very little equipment other than some hand tools, the Jews soon made Amsterdam  the diamond capitol of Europe.    During WWII  the Jews that escaped fled to the United States.

Renée Rose Shield in her book “Diamond Stories: EnduringChange on 47th Street” wrote: “ The diamond, a pebbly object transformed into a twinkling, astronomically priced jewel, has allowed Jews to transform themselves from rejected refugees of one country to respected businessmen of another.”

There is a small Radio City Synagogue on the third floor of 30 W. 47th St.   There is  Manhattan’s only Bukharan kosher eatery, Taam-Tov in N41 where you can have Shish kebabs and pilafs.

For 58 years, 41 W. 47th St. was home to the Gotham Book Mart (the name was inspired by Washington Irving).    The store specialized in poetry, literature, books about theater, art, music and dance. The store virtually played as a literary salon, hosting  poetry and author readings and art exhibits.  American writer Arthur Miller said  about the store: “ It's impossible to imagine New York City without it."  

Fanny Steloff,  the owner of the store that was open  in 1920, died in 1989 when  she was 101.  The house was purchased in 1946 for $65,000 and sold in 2003 for $7.2 million to Boris Aranov, who   owned another adjacent building.

Harry Winston, King of Diamonds

The simplest ring in Harry Winston  Jewelry shop, located at 718 5th Avenue,  is $2,600. Wedding bands of more than twenty different styles  start at $3,900.For over a century, Harry Winston has been synonymous with exquisite gems and jewelry  that rival (and often surpass) the royal collections of the world. 

Harry Winston was a famous American jeweler.   Known as the “King of Diamonds”,  he owned  the Blue Hope, a 45.52 carat deep blue diamond, discovered in India 300 years ago and  considered to be the rarest gem ever fond on the  Earth.

 The plot of the first detective novel in the English language , “Moonstone” by Wilkie Collins  (1868), is  based on the legend about Blue Hope . Henry Winston  was the  last owner of  Blue Hope and donated it  to the Smithsonian National Museum of Natural History in Washington in 1958 after owning it for a decade. Winston   famously sent the diamond to the museum   via USPS.  Over five million people go to the Harry Winston Gallery in the Smithsonian every year to view the Hope Diamond.

Winston was among the most famous jewelers in the world, well-known to the general public. In the 1953 musical film "Gentlemen Prefer Blondes", the song "Diamonds Are a Girl's Best Friend" includes the spoken interjection "Talk to me, Harry Winston, tell me all about it!"

Harry Winston's mother and father emigrated  from Ukraine in 1890. His father Jacob started a small jewelry business. As the legend says,  Harry, 12 years old at that time ,  recognized a two-carat emerald in a pawn shop, bought it for 25 cents, and sold it two days later for $800.

     In 1920, at the age of 24, Winston started his first business, the Premier Diamond Company.   

Winston's jewelry empire  started with the  acquisition  of  Arabella Huntington collection after her death.  Arabella was   known as the richest woman in America  and an  collector of art, jewelry and  antiques.  Her son Archer   donated many of her paintings, including  two Rembrandts  and  a Vermeer,  to the Metropolitan Museum of Art.

   Since Winston invented ‘celebrity jewelry dressing’, stars from Marilyn Monroe and Elizabeth Taylor to Gwyneth Paltrow and Angelina Jolie have graced the red carpet adorned by diamonds personally designed and crafted in the Harry Winston workshops.

   In 1968 Harry Winston  purchased   rough diamond  over 601 carat in the South African kingdom of Lesotho. The cleaving (slicing ) of the stone, named Lesotho,  was broadcast live on television in 1968.  Aristotle Onassis purchased   one of the stones  for Jacqueline Kennedy Onassis’ engagement ring. She only wore it twice and then it was locked away in a bank vault in New York.  In 1996 Sotheby's auction of Jackie's estate the stone was sold  for $2.59 million. 

    The list of the diamonds owned by Winston is really impressive
By the end of his career, Winston had owned, at one time or another, most of the history’s famous diamonds.  Winston bought  718 Fifth Avenue, at 56th Street in 1959. The original  building was built in 1872 and belonged to a  cabinetmaker and interior decorator Charles Baudouine, who used the house as  the main residence.  Fifth Avenue Association gave him an award for the best altered building of the year, when Winston moved his $35 million in jewels to the new location in 1960.
 

 Wilson had two sons and when he passed away in 1978, he left   the company to his son Ronald and two trustees, but  instructed that both his sons- Ronald and  Bruce - should get equal income from the company.

In 1990 Bruce filed a suit against Ronald demanding more information about the finances of the company. Ronald made several offers to buy his brother out but Bruce refused.

Both brothers finally settled in 2000 when Bruce sold his stake in Harry Winston

Inc. for $44 million. Funds for that payment came from Fenway Partners, a NewYork-based private equity group, which received a 55% stake in return.

Three years later, Fenway Partners wanted to cash out and Aber Diamond Corporation, an exploration company formed in 1994 in Toronto,  announced its plans for a friendly takeover of Harry Winston. By May 2004, Aber had acquired a 51% stake in Harry Winston for $85 million with an option to buy the rest of the company.  Aber soon exercised its option and in September 2006, for an additional $157 million, it bought the rest of Harry Winston. A year later, Aber took on the glorious name of Harry Winston and the company began trading on the NYSE under the ticker symbol “HWD” and officially changes its name to Harry Winston Diamond Corp. HWD changed ticker and is traded now under DDC (Dominion Diamond Corp).

In 2008 four men wearing wigs and female clothing entered a Harry Winston jewelry store in   Paris neighborhood   and swiped an estimated $100 million in jewels. It was the most important robbery in French history, only second to the world record in Antwerp, Belgium, in 2003. $25 million in stolen jewels was found three years later  in Paris sewer.