Some times when you find the right person, you need to lock it down.

These are some videos we have produced about life and love and the perfectly cut Passion Fire diamonds we carry in our shops and on-line. We wanted to celebrate the release of a cartoon hero I grew up with, Green Lantern. We find these videos help promote our brand and drive some traffic to our websites. Plus, they are also kind of fun to produce.

http://www.gottalockthatdown.com/

The importance of doing something good

We may not be able to defeat evil, but if we do something to support what is good and right in the world we will eventually over take the evil that exists. We cannot sell a product which symbolizes love and commitment and allow it to be tarnished by unfair labor practices, child labor, and war and terror. As an industry we must be vigilant to continue to strive to do good by improving the diamond producing countries, giving a fair share of the profit back to the miners, and making sure we are being good stewards of the earth and all the natural resources.

At Passion Fire Diamonds we are committed to ethical sourcing and transparent and efficient markets which are fair for all people involved. Doing something good is important because values matter and all business transactions involve moral choice. We can offer product which respect the environment and exploit children or which helps those miners. We could choose to bless our community or exploit it for the sole goal of short term profit, but at what expense? With my own family of six children, I want this community to be better than when I found it for the sake of my own children, as well as others.

At the recent international diamond conference in Las Vegas, there was a great deal of discussion regarding the Kimberly process, ethical sourcing and “fair trade” practices, which can even be certified. We support the Kimberly Process, while recognizing that there are serious flaws in the current system. We too this opportunity to discuss with each of our suppliers the importance of ethical sourcing, and made it very clear we have a zero tolerance policy. If any diamond does not have a clear history, we won’t buy it for our sites or stores.

I personally was not aware of the difference between ethical sourcing and full blown fair trade certification, but it is definitely something I want to look at with respect to not only the diamonds, but also the “green” gold and other metals we use. We will always recycle whenever we can whether it means buying our client’s diamonds and precious metals in order to recycle them into new rings. The only way our industry can meet the rising diamond demand in coming years is to re-cut and recycle diamonds from the second hand market. This requires that we offer a fair market price for these diamonds and not take advantage of consumers who are not as familiar with the diamond market. We are looking for ways we can use some of the more outdated cutting styles so that we can provide better offers for recycled diamonds.

An offer no reasonable man could refuse.

I’d gotten to that Red-Star table by positioning myself early and ugly in that regard. As a Master Gemologist Appraiser—one of 41 in the U.S.—I understood the physics and optics of gemstones as well as any in the South Hampton Roads Area, and what constituted value in a gemstone. I’d apprehended early what true added value was, and, more important still, how to achieve it. As a marketer, I saw and deeply felt how important a personality-driven brand could be at the local level, and how that brand could be affirmed, reaffirmed, and then reaffirmed again not only in my showcases and displays but outside the stores as well, by my position in my community. My concept of of the “personality-driven local brand” rested on my worldview that a business must not only make a profit for the stakeholders, but be a blessing to the community, much as what financial guru Jim Collins has written, filling the unfillable hole in a market, which he referenced in his book, Good to Great (one I highly recommend.)

Diamonds, one of the jeweler’s two great income-streams (timepieces are the other), had always been sold as a commodity. Now these chips of crystallized carbon were undergoing a branding themselves, with premiums going to jewelers, cutters, and manufacturers able to differentiate their stones not only from the guy down the road but from the WalMart out by the interstate: Believe it or not, WalMart has been the world’s No. 1 diamond merchant for almost two decades: At the height of our expansion, for example, December 2005, our regional market share had reached seven percent. WalMart, which had already begun to lose share to online merchants such as Blue Nile, was down to eight percent of diamond sales, nationally. That sales volume of WalMart and the other Big Boxes by itself crippled many an independent jeweler throughout the late-20th Century downturns.

Their market share owed as much to their reach as buyers as to their omnipresence in the American mall. A jeweler’s trade is as dependent upon his relationship with his suppliers as his relationship with his customers. There was no competing with them on price, volume, or credit-terms. More crucially, however, we couldn’t compete for the supply of diamonds typically sold. Ninety percent of the vendors I would fight to get a parcel of one-carat diamonds from would have spent five, ten years simply to get in the door at a Vendors Day in Bentonville, AR.

The only solution was to sell different and demonstrably better stones, and to use my expertise in branding, and my personal local brand to outrun the big guys. It was a slippery slope: As a client of two of the first national diamond branders, Boston, MA’s Hearts on Fire and northern California’s Eight-Star, I understood the benefits but also the inevitable shortcomings of a retailer’s relationship with such companies, and had begun my own “private-label” diamond and diamond-jewelry lines. Those private-label brands—and I soon added David Nygaard timepieces as well—could at times be a logistical nightmare, but they helped guide a path to the most visible, accountable, and margin-enhancing sweet spots of the supply chain. It was a path that would take me from being yet another buyer of goods from national manufacturers, yet another guy walking the aisles at trade-shows, to being a local private-labeler, and, inevitably, an overseas manufacturer, and top notch jewelry designer  myself.

An Offer No REasonable Man Could Refuse

It was an ordinary business lunch at an ordinary restaurant in the Town Center in Virginia Beach, mid-August 2006. For me, it was the closest a man gets to walking on air while eating a BBQ pork sandwich and onion rings at a Red-Star Tavern.

Wachovia, in the form of a loan officer named Tom Mitchell, was wining and dining me and my thriving jewelry chain, which I’d grown to six doors in three years. He’d been sent to me by the worldwide banking giant’s regional president, Jeff Dykman, who not only wanted to take my business from the smaller regional chain of BB&T, but to have me open Store No. 7 proximate to what was to have been the “Wachovia Center” in downtown Norfolk. No one had ever asked me to open another store, and that really fed my ego.

No. 7 was to be fully funded with a Five Year Note, stocked like none of the other six doors, a crowning achievement for our business. It was also something of a personal laurel-wreath: The Five Year Note Tom offered was non-demand—the best kind of note. Unlike a demand note, which a bank can place into default any time they wished, this couldn’t be “called” so long as we made the monthly payments.

As a student of the diamond and jewelry trade, I was deeply aware of what that Note symbolized. On the surface, Tom was just your typical mid-America loan officer, a former jock who’d probably gotten his job because he connected easily and naturally with people, a type more friendly than bright, who from mid-school on was used to people wanting him in their corner, if only to look cooler than they were. I suppose I too was a typical, if aggressive, mid-Americas retailer. No one in their right mind has ever accused me of being cool.

Beyond that Red-Star Tavern, however, lay a banker-jeweler relationship dating back to 15th-Century Venice—roughly the time when diamond merchants in the small Belgian towns of Bruges and Antwerp first learned the secret of cutting a diamond, the world’s hardest substance. Scratch two diamonds against each other to create diamond dust, collect that dust, use it to “impregnate” a stone wheel, similar to one used in pottery, and you’ve created a diamond surface capable of polishing facets onto a rough stone. These merchants had a new and immensely profitable trade. Located principally in Venice for its central position on waterways connecting northern Europe and India (source not only of diamonds but other precious stones, metals, spices, and other commodities), they were the repositories of a new kind of transportable wealth, one capable of funding not only other merchants but the doges of Venice and soon much of Europe’s royalty. It’s a gross oversimplification, but they in essence became the first private bankers, and a powerful, if secretive connection between the banking and jewelry trades was born. It continued: through the growth of nation-states, of the great cities and population centers, the transformation from monarchies to democracy, and with it, the democratization of wealth and the growth of a retailer class, embodied in that Red-Star Tavern by none other than myself.

It was a heady but also perilous time to be a jeweler. The 21st Century had brought a sea-change to the now $85-billion jewelry trade. Globalism, the massive flow of free information and competition at the top of the supply chain had, for the first time, forced a truly free market upon us, rather than the supply-side cartel put in place by the monolithic diamond miner De Beers at the turn of the 20th Century. Supply-chain visibility, accountability, best-business practices, vertical integration, branding, private-labeling, and added value were, almost overnight, becoming hallmarks of a trade that for centuries had been the provenances of kings, criminals, and shadowy monopolies. Those changes brought less proactive jewelers, designers, manufacturers, and even sightholders—the top diamond cutters who received goods directly from De Beers and the other miners—to their knees, and it made millions for those at the vanguard of those changes. The dividing line was pretty clear: The first, losing group were participants who had long relied and profited on price-competition. With prices already sky-high—the dot.com boom had seen to that—the new metric no longer lay in the black numbers artificially embossed on price-stickers and bar-codes, however. With a spiraling growth of the jewelry-buying public’s ability to educate itself (and compete for buying power) on the internet, the secret to margins and growth now lay in adding value to one’s merchandise.

A Titanic Appraisal

I had a pretty interesting appraisal on an old stainless steel pocket watch, circa dates 1910 from the movement serial number. It looked like a workman’s watch. The story made it all the more intriguing. It was given to a young baby who was separated from his mother, on a lifeboat from the Titanic.   The story goes, a mother and her child were traveling to meet her husband, working in America.  When the ship hit the iceberg and passengers summoned to the lifeboats, the young baby was brought on deck by his mother. Mrs. Astor took off her shawl, seeing the baby was cold and wrapped it around him as they waited for a lifeboat. One came available, and the baby was placed in the arms of a nurse, while his mother waited for another lifeboat.  The baby was placed in the arms of a nurse in one lifeboat but he was so distraught that one of the men on the boat handed over a shiny pocket watch to distract the baby and keep him occupied. The only men on the boat, from the history, were crew and the watch was a “common working man’s watch.” It wasn’t fancy, just kept good time, with a stainless steel case.

The boat was lowered into the icy waters while the mother waited and hoped another boat would allow her on so she could be reunited with her baby. “At least,” she thought, “my baby will be safe.”  The nurse kept the little one warm with Mrs. Astor’s shawl and a second blanket and kept playing with the shiny watch to keep him distracted while the crew rowed the life boat away from the sinking ship.  With her baby now safely off the sinking ship, the mother turned to her own safety and looked for another lifeboat which might take her. She found one, and got into it hoping she would be reunited with her son. In the cold waters of the north Atlantic, she waited for a ship to come.

Eventually, the Carpathia made its way through the ice and began to pick up the various lifeboats which had been separated from one another during the night. Her boat was one of the earlier ones to be found. As she stepped out onto the Carpathia’s deck she quickly looked for the faces from the boat carrying her son, but saw none.  After searching the Carpathia and the other lifeboats, the mother began to second guess letting her son go. After all, she had been picked up almost 3 hours earlier. Then, Carpathia saw another lifeboat and moved closer to retrieve her.  This boat did, indeed have the nurse holding the young baby, keeping him warm with her own body. By this time, the baby had fallen asleep, still holding the pocket watch when the nurse past him over to his thankful mother. The watch remained in the family until the baby died several years back as an old man.

The watch was bequeathed to his best friend who also died some years later. The friends family brought it in for appraisal, giving me the names they knew and sketchy parts of the story. I did some research and uncovered the full story I have just related.  This is an example of “provenance” which essentially is an intangible aspect of value which increases the value of an item being appraised. A friend of mine purchased the original Batman Batcave secret button, inside the statue. It was documented and he paid more for the item because of its history.

In the case of this watch, the story was passed only through oral tradition and none of the principles were alive to attest to it, linking this particular watch to the events in the story.  Even though it was plausible, maybe even likely for the romantics like myself, I could not consider the story in the value of the watch. It was a fun assignment nonetheless.

Many people would go and visit the grave site of Jesse James, which was on the property where his mother lived for many years.  They came with an almost  cult like fixation of the gunman.  She was an old widow at the time and money was scarce, so she began “working” the traffic that came her way and began to tell all kinds of stories for her audience, who listened intently.  Eventually, she would ask, “Would you like to see his gun?” and almost certainly would be greeted with a firm “yes, of course!”  She would let them handle the gun and then at just the right moment might say, “You know you sure seem fond of it.  Would you like to buy it from me?”  She would then prepare the papers for the person and sign and authenticate the gun she had just sold as being owned by none other than Jesse James.  These guns would be passed through families with many similar stories.  One happened by an appraiser friend of mine.  We talked about it and looked at the serial numbers, just to make sure the dates were consistent.  The funny thing about serial numbers is that most of these guns were manufactured well after dear Jesse had died.  Apparently Mrs. James would frequent the local gun shops and purchase quite a few guns at one time and would certify each one as original before selling down her inventory.  She thus had a nice “widow’s pension” from her sons exploits and was able to have lots of company in her old age and even some income.

And some people thought appraisals were boring business!

How I Became a Toxic Asset and Survived!

My story was a harbinger of the destruction of the American capital system as it’s been known since the Reform Acts of 1933.  Local and trade magazines have profiled my overnight descent from pillar of the community to toxic asset when the banking crisis imploded last year.

I owned a fast-grown chain of high-end jewelry shops in the Virginia Beach area, with the civic status and awards expected of a high-profile entrepreneur, and then some. In 2006, I was Virginia Business Magazine’s Success Story of the Year and I had grown my company from one to six stores in three years. Wachovia, America’s quickest-growing bank in  2007, pitched me to replace our prior bank, with an offer no reasonable man could refuse, enabling and encouraging further expansion—even to an overseas factory—with a five year note.

My personal banker faced a failed engagement and demanded a full $15,000 refund on a custom ring we made for him some 18 months before, “or else…”   In April 2008, months before the rest of the country would become aware of the self-destruction of the American banking system, Wachovia invoked what is known as a “nervous clause” to retroactively place my loans into default the prior July, despite the fact they were current. A meeting with their “closeout” men took ten minutes, and I was suddenly standing at the edge of an abyss. My house and personal finances were tied to those notes.

I hired an industry liquidation company to raise cash, and closed two stores, but I was cutting off fingers to save the hand. In June, Wachovia requested a “collateral inspection” as a means to seize $1.7 million still in inventory, though they failed to do it properly by all accounts.   All our accounts were frozen, hard assets locked up, and my chain was extinct. We had been named the 5th “Best Place to Work,” in our region, but were unable to make final payroll for some 35 employees. I became persona non grata in the highly sequestered worldwide diamond chain—much of my inventory was “mine” on credit, and the dealers had no recourse to their goods. One did try—hiring a hit man who threatened me and my family, and placing us on the FBI Victim Assistance list. I injured my back carrying out records and saw my office of seven years for the last time on an ambulance-stretcher.

Wachovia, Wells Fargo,  placed my home into foreclosure, and the local media reported the auction last August.  No bidder showed up—temporary limbo—though federal TARP money did enable Wachovia to pay off my first mortgage and acquired my home in early June this year; they then sold it in a “closed door deal” to the prime suspect in our embezzlement case, dubbed the “largest jewel heist in Virginia Beach history,” by the local NBC affiliate.

This blog is in part the story behind the story reported by the local and trade press.  It is the story of survival and how God can use the most difficult challenges to grow our character.  I’m writing a book but in the meantime, enjoy the blog.  Don’t worry, I’ll add some other things too.

Healing in many forms

Triumph over Adversity was the name of the Virginia Business Magazine article in which I was named “Virginia Success Story” in 2006.  Just two years later we were forced to shut down all seven stores when Wachovia retroactively called our notes in default. We were current in April when they called them, and we began an orderly liquidation of two stores.  Wachovia wanted out quicker than we were able to liquidate, and four days before they had to report their own enormous losses, they seized our inventory under a “collateral inspection.”  My home was placed in foreclosure within 30 days by the bankers looking for quick cash and someone to blame for their own mistakes. My wife and six children were thus forced out of our home of 16 years, and moved to the country, the 4th poorest county in the US, I’m told.  Healing takes many forms.  As I was driving through the country, seeing the cotton fields set against the bright reds and oranges of the maples, and a golden eagle flying over head, I saw a beauty I would have missed just a few years ago.  My creative juices have been released as I have been learning to build jewelry on a computer (take a look at my new web site: www.davidnygaardfinejewelers.com) and can take the design where ever I want, freedom I never experienced with the 7 stores.  The song which grabbed me on the drive was by Michael Card: “It is amazing the freedom we find from the things we leave behind.”

Getting Caught by the Virus- not H1N1!

I got a Face Book message this morning from a friend from church which was quickly followed by a friend from Oklahoma.  Both referenced a photo/movie clip of me and I got curious about something out there in cyber space being posted of me.  Maybe I’m paranoid but I wanted to track it down.  Well, I didn’t realize it would be a virus, after all, my friends had no contact with each other.  I suppose I am gullible enough to fall for these tactics.  Meanwhile, I’m stuck in the store trying to get some new product up loaded to my new Boutique while the storm passes.  Bridges are out all over town so I’m kind of stuck here for a while.  At least I can answer the virus questions on FB in between taking digital photos of some new designs I’m working on for the Boutique.  Check it out at www.davidnygaardfinejewelers.com.