Luxist Guest Post: Chris Del Gatto of CIRCA On The Real Value of Jewelry
Have you ever wondered what that diamond necklace that your grandmother left you would be worth if you ever wanted to sell it? We did, so we asked Chris Del Gatto, Chairman & CEO of CIRCA, the largest global buyer of fine jewelry from the public, to share some trade secrets on the true market value of jewelry. As you can imagine, there's typically a disconnect between the public's perception of what jewelry is "worth", and the true market value of that item. True market value means the price that you would get if you were to sell the piece. This is very different from an appraisal value – what you would have to pay retail to replace an item if it were lost or stolen. What's important to realize is that when you're paying retail, you're paying for labor, marketing and the various profits made along the way.
For example, the generic yellow gold & diamond tennis bracelet that retails for $5,000, will typically cost a retailer an average of $1,800-$3,000, whereas the manufacturer's cost to make the piece would be more like $1,260 - $2,100. As someone who now owns that bracelet, and is selling it back into the marketplace, you're starting over again. You're not going to make back the profit that the manufacturer and retailer made. You also have to discount the labor that went into the piece. What you have left is the intrinsic value of the stones and the metal as your base. However, you can start adding value back if:
1) the piece is superbly designed and manufactured
2) the stone qualities are very high
3) it's a period piece, like Art Deco, Retro, etc.
4) the piece is signed by a famous maker such as Cartier, Van Cleef & Arpels, Tiffany & Co, etc.
This is an example of a piece that we bought this summer. It's an Art Deco lady's evening watch by Cartier made of platinum and studded with old mine cut diamonds. The formula would go something like this: Value of the platinum and diamonds + superior craftsmanship of a Cartier piece + the fact that it is an Art Deco piece from the early 1920's + Cartier signature and hallmarks = resale value.
In the case of this watch, the smallest part of the calculation came from the materials. The style, period and signature are what provide the real value. We bought art in this case, not materials.
Ultimately, as in any industry, the rules of supply and demand reign. The true value of something is always what someone else is willing to pay.
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For more on this Art Deco watch visit the CIRCA Blog.
