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Finding a gold mine in diamonds
Economy

Finding a gold mine in diamonds

Monday, 19 May 2008
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Carol Besler
Journalist

“Watches are functional art.”

Carol Besler covers watches and jewelry worldwide.

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5 min read

Why is the watch industry suddenly putting diamonds on every wrist?

Diamond-set watches have become an industry standard, with bespoke pieces and limited edition jewelry watches and diamond-set complications almost as prevalent as “set” versions of timepieces from already-seen collections. Designs are increasingly more original, diamonds are bigger and more precisely cut, and as some movements become more difficult to source, diamonds are taking the place of complications as the “added-value” component of high-end watches.

As such, they must have considerable intrinsic value, and that is one of the reasons the luxury watch industry uses primarily VVS, G-color diamonds, or Top Wesselton, as they are conventionally called in the watch industry. The requirements for cut in off-rounds are even more stringent. “For a diamond company to supply the watch industry, it has to be very strong in its sorting and preparation work. All the requirements are very specific and you have to be absolutely precise” says Vartkess Knadjian, president of Backes & Strauss, a diamond company that launched a watch brand three years ago in partnership with Franck Muller Group. “Within Switzerland, there are only a handful of specialized firms who cut and set diamonds for the watch industry,” he says. “We have our own in-house capabilities, which is our great advantage.” Backes & Strauss is even going so far as to set ideal-cut stones in its watches, in sizes as small as .005 carat. “We’re totally mad,” admits Knadjian. “But as we’ve called ourselves masters of diamonds since 1789, I felt we had to distinguish ourselves from our competitors. It also means we don’t need the human eye to match the stones. When a stone is ideally cut, then by definition, all the table percentages and angles are identical.”

We have a 98% accuracy rate.
Alex Gil
Diamonds as a new value added

Miguel Gil, located in La Chaux-de-Fonds, is one of a handful of custom gem setting workshops serving the elite watchmaking industry – the company’s clients include Roger Dubuis, Rolex and Audemars Piguet. Alex Gil, son of company founder Miguel, says finding diamonds of the quality required by the diamond industry is not usually the problem. In fact, the firm also operates a diamond company in Belgium, Alhambra. “Cutting them to the precise tolerances required is where the artform lies, especially with baguette cuts, which require three-dimensional precision.” He notes that clients such as Rolex visit the workshop at regular intervals to inspect the diamonds and the settings. “We have a 98% accuracy rate,” says Gil.

The factory has had a particularly busy year, and Gil attributes the demand for diamond-set watches in the industry on the shortage of movements, set off by Swatch’s decision to gradually reduce supply of movement kits to the rest of the industry, beginning in 2006. “In some cases it’s very hard to find the desired mechanical movement, so a quartz is used, or maybe a tourbillon is desired by not available, and a basic automatic is used instead. So to in order to add value, you put 200 diamonds into the watch instead of 20,” says Gil.

Bunter and the invisible setting technique

Claude Sanz, owner of Bunter, a gem cutting and setting operation near Geneva, concurs. “If you have no movement, you have no watch. So if you want to grow as a company, you can’t do it right now with quantity. You must add value, and you can make as much money on the diamonds as you can on the movement.”

Sanz specializes in an invisible setting technique he developed over a 10-year period, which he debuted four years ago in the Jacob Rainbow Tourbillon, followed by the million-dollar Hublot Big Bang last year, fully set with 463 baguette diamonds, for a total of 32 carats. “Invisible setting is challenging because the tolerances are in all directions,” he says. It’s not like channel or prong setting, where you can compensate with the gold. Each diamond must match the others around it perfectly, in every direction. Not only that, but the grooves have to be measured precisely from the table of the gem in order for the diamonds to sit flush. So it’s not only the X and Y axis, it’s also the Z – the vertical axis.” Sanz says setting jewellery is easier – “It’s more flexible, and it doesn’t have to withstand the kind of shock that a watch does.”

Certainly the demand seems to be growing.
Setting complicated watches is common practice

Several brands are energetically embracing the jewellery watch boom, and it is hard to say whether it is driven by movement shortage or just good marketing. Certainly the demand seems to be growing. While many of the players have roots as jewellers, they have also forged a reputation in the realm of high watchmaking in recent years. Harry Winston, Backes & Strauss, Bulgari, Dior and Chanel all began either as jewelers, diamond dealers or couture houses. Most have joined ranks with the Swiss watchmaking elite, producing high-end complicated timepieces and, in the case of Bulgari, in-house movements in fully integrated manufactories.

Setting complicated watches is now common practice, one that combines the best of both worlds. Girard-Perregaux, for example, put its world timer movement to admirable use in the diamond-studded 24-hour Shopping Watch, for ladies who like to engage in retail therapy on several continents. It’s the perfect power watch for the woman with spending power.

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