August 7, 2022

The King of Really Big Diamonds Heads to China

But none of the gems actually belongs to them.

At the May gala of the Metropolitan Museum of Art Costume Institute, these A-listers are simply borrowing their baubles from some big names in diamonds, a common P.R. tactic in the high-glitz business of gems.

Yet jewels from Laurence Graff, perhaps the biggest dealer in seriously big stones, are rare this evening.

“The people who wear Graff jewelry own it,” says Henri Barguirdjian, who heads Mr. Graff’s United States sales operation. “I think it is a bit of an insult to our clients who actually purchased our jewelry,” he adds, referring to the notion of non-owners wearing Graff jewels. “If you spend $1 million, that is a lot of money. Do you want a little model wearing it?”

It might seem remarkable that anyone would spurn a little free fashion buzz, particularly in a business like diamonds, and particularly in tough economic times. Lending jewels to boldface names is standard practice.

Standard, perhaps — but not at Graff Diamonds. The retail business, however, is only part of an empire that extends from luxe showrooms in London to gritty diamond mines in southern Africa to cutting rooms in Antwerp, Belgium, and beyond. It is a world that at times seems impervious to the fortunes of mere mortals, though not, it turns out, to the shifting sands of the global economy.

Beneath the headquarters of Graff on Albemarle Street, in the Mayfair section of London, is a warren of workrooms. There, 170 people produce the jewelry that Graff sells worldwide.

But now Mr. Graff is pushing into China, where the number of billionaires is climbing annually — and ranks second only to that of the United States. Everyone else is piling in, too. The exploding market for diamonds in China, it seems, is yet another sign of its rising economic might, or at least the willingness of its ultrarich to spend — and spend big.

“We make more sales to newer money than to older money,” Mr. Graff says in explaining China’s appeal. “Americans are not attracted in the same way in spending money on jewelry as in the Far East.”

Let others fret over a mere carat or two. Mr. Graff’s purchases of giant gems awe the diamond world. Over the decades, he has sold many major stones, including the Magnificence, a 244-carat white diamond, and the Maharajah, a 78-carat yellow diamond. Graff Diamonds hit the headlines in 2009 when robbers made off with $65 million of gems from its shop in Mayfair, in the largest jewel heist in British history. (The jewels have not been recovered.)

His customers have included Oprah Winfrey, Arnold Schwarzenegger, Denzel Washington, Victoria Beckham and Danielle Steel. In the past three years, Mr. Graff spent more than $100 million on four diamonds. That’s right: $100 million to buy just four stones. For one of them, a flawless, 24.78-carat pink diamond, he paid a record $46 million last year at a Geneva auction.

And he is not likely to lend it to anyone for the evening.

Today, Mr. Graff’s offerings include a necklace of 26 stones cut from the Lesotho Promise, a 603-carat rough stone that he bought for $12.4 million from the Letseng Mine in the African country of Lesotho. The company now values the necklace at more than $60 million. Also for sale is the Graff Constellation, a 102.79-carat flawless round diamond that was cut from the $18.4 million, 478-carat Light of Letseng.

Not that he buys only rough stones. He paid $24 million for the 35.5-carat Wittelsbach diamond, a fancy blue stone that is a rival to the Hope Diamond. In a controversial move, he recut the diamond to remove imperfections, prompting criticism that he had essentially painted over a Rembrandt. The Wittelsbach Graff sold recently for an undisclosed amount.

Mr. Graff oversees a network of 32 stores worldwide, and owns 12.14 percent of Gem Diamonds, a publicly traded mining company. Through a 51 percent stake, he controls the South African Diamond Corporation, which cuts and polishes diamonds; Safdico has 520 employees in places like Johannesburg, Antwerp, Mauritius and Botswana.

Though Hollywood celebrities are often photographed wearing big gems, “they are not big purchasers,” Mr. Graff, 73, says. “They don’t have that sort of money.”

Increasingly, the sort of money that moves this market is Chinese. Though buyers rarely disclose purchases, experts agree that the Chinese appetite for diamonds — particularly for colored diamonds — is growing.

The American diamond market, like the American economy, has slowed in recent years. Mr. Graff plans only one new store in United States, in San Francisco, a city that has many visitors from Asia. Graff already has three stores in East Asia, and plans to open one in mainland China and one on Taiwan.

The swing to Asia, and China in particular, has startled even Graff’s veteran management. “If you had told me five years ago that the biggest buyers would come from the People’s Republic of China, we would have laughed,” says Mr. Barguirdjian, Mr. Graff’s longtime lieutenant. “It took us by surprise. America used to be the No. 1 market. Now that is being challenged.”

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