The Jeweler Shaking Up the 600-Year-Old Diamond Industry
WHY YOU SHOULD CARE
Because he’s dealing the customer in.
By Nick Dall
Yair Shimansky sets his alarm for 3 a.m. and boards a plane two hours later. After flying from Cape Town to Kimberley, he drives 140 miles to Wolmaransstad, a dreary town of 3,500 in South Africa’s ”maize basket.” By midmorning he’s poring over rough diamonds, using high-tech equipment and smartphone apps to calibrate their potential value. It’s already been a long day, and a mistake could cost him tens of thousands of dollars. “You need to have balls of steel,” he whispers.
One of the only jewelers whose team takes stones through every step in the process — from bruting and polishing diamonds to turning them into jewelry — Shimansky is an unmitigated success story with 10 stores in South Africa and one opening in New York later this year. And considering that he’s been operating within the constraints of the 640-year-old diamond industry, his story could break even bigger if he pulls off a plan to bypass rules prohibiting the sale of rough diamonds to the public.
Shimansky likens it to buying a house on spec rather than fully furnished.
Shimansky grew up in Israel, spending months at a time with his sea captain father and part of high school in London, where he developed a lasting distaste for wearing a suit and tie. After completing military service, he spent two years in Japan and moved to South Africa for what was supposed to be a short visit. But instead of returning to Israel, he started selling jewelry at flea markets around Durban — at first importing silver pieces and later crafting his own designs.
That was 25 years ago. Today, he is the head of Shimansky Diamonds, a brand with five patented cuts, including the Brilliant 10, which permits “little to no light leakage,” according to the company’s site. He established the Cape Town Diamond Museum in 2011 and has the distinction of designing the world’s most expensive temporary tattoo (it includes 612 diamonds). This might be achievement enough, except Shimansky, who slept in his store in the early days because he couldn’t afford security, is focused on a legacy that “maybe three generations from now,” he says, will see his brand going toe to toe with the likes of Tiffany, Cartier and Graff.
Nissim Halio, a colleague of his, says Shimansky “can see very far into the future.” “I’m the one who comes from diamonds,” observes Halio, who has spent four decades establishing himself as one of the best diamond cutters around. “But Shimansky created the new shapes.”
And Shimansky’s newest idea is bigger than any patented cut. For anyone looking to buy a diamond, the only option is purchasing cut and polished stones — at approximately four times their rough value. Although this “no rough” rule isn’t going to change, Shimansky has found a way for customers to enter the production pipeline sooner. Before the end of this year, buyers will be able to pay for rough stones up front and, about 45 days later, receive a cut and polished stone of guaranteed grade, color and size. Customers can then take ownership or Shimansky will sell the stone on their behalf. If the finished stone fails to meet expectations, they will be entitled to a full refund — but if the diamond’s value exceeds projections, the customer walks away with the profit.
What’s driving Shimansky — a man who controls diamonds from mine to finger – to eliminate the middleman? “It will create a larger scale of economics,” he says, “and it’ll attract more people to the brand.” Also, customers can request their rough diamond be cut into a single large stone or several smaller stones — which tends to offer a larger return on their investment. Shimansky likens it to buying a house on spec rather than fully furnished.
As convinced as he is that his idea is a game changer, Shimansky is surprisingly unfazed by the prospect of it being copied: “Brands like Tiffany and Cartier have billions of dollars tied up in retail and can afford to sit on a diamond for years. I have a limited amount of money and I have to make it work for me.” Which is why he’s pegging his hopes on the much lower overheads attached to e-commerce. He showed me mock-ups of his new online store, featuring 3D scans of the rough diamond — and representations of the polished stone — plus diagrams of various cutting options. All quite impressive, but they raise the question: Why would customers be willing to make such hefty purchases online?
David Gabay of Treasure Diamonds, a rival diamond dealer in South Africa and Israel, admits he’d be reluctant to buy a big stone online, “but the fact that it was going to be cut and polished by Shimansky would give me some peace of mind.” Gabay also has concerns about Shimansky’s ability to guarantee grade, color and size, but he surmises that even if something goes wrong in the process, Shimansky would ensure “no one is disappointed by offering a replacement stone.” Or, as Shimansky himself has promised: a money-back guarantee.
Selling rough diamonds online may be Shimansky’s big idea, but it’s not his only one. This month, he plans to open a one-of-a-kind concept store in Cape Town where customers will cut and polish rough stones under expert guidance, before seeing them transformed into jewelry. Because of the risks associated with letting untrained people work on gems, the stones will be smaller and less valuable than those he’ll offer online, but he predicts the experience will be priceless. At the end of the three-day process — at a cost only slightly higher than buying the equivalent ready-to-wear jewel — customers will walk away with something utterly unique because they selected it, designed it and cut it. “Eating a carrot you’ve grown yourself is always more satisfying,” says Shimansky.
What does he see “far into the future”? Diamond cutting has remained essentially unchanged for 300 years, he says. “I want to invent new tools that allow me to cut diamonds into organic, free-form shapes.” Tools, I’d venture to guess, he will eventually adapt so his customers can cut diamonds into free-form shapes.
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