Claire Adler is a London-based luxury goods journalist.
Laurence Graff is possibly the most important jeweller in the world today. However, as he engages in a significant expansion programme for the business, the size of his family is part of the challenge, as Claire Adler discovers…
Securing a face-to-face interview with Laurence Graff is no easy task. With homes in London, New York, Cap Ferrat in the south of France, Geneva, a Feadship yacht, a Global Express SRS plane, a winery and vineyard in Stellenbosch – the Napa Valley of South Africa – and a well-known preference for avoiding the press, Graff is something of an international man of mystery. Then again, more than almost every other fine jeweller in the business, he successfully piles heaps of mystique onto the eye-popping diamonds he sells.
To jewellery industry insiders, his is a household name. Worth an estimated $2.5 billion, Graff, 69, has probably handled more important diamonds than any individual this century. The Sultan and Queen of Brunei, Oprah Winfrey, Elizabeth Taylor and David and Victoria Beckham count among Graff's longstanding clients.
The Graff empire, which last year posted a turnover of $400 million, is split between Graff Diamonds International (GDI) and Safdico. GDI includes all corporate offices, jewellery workshops and retail stores worldwide. The company has 27 Graff stores globally, from London and Tokyo to Kuwait and Las Vegas. There is even a store on board the luxury five star cruise ship, the Residensea.
Safdico is a world-class diamond company with offices in Johannesburg, New York, Geneva, Mauritius and Antwerp. Safdico's worldwide diamond marketing and distribution network specialises in top-end extraordinary diamonds, which include the Queen of Africa 102 carat intense yellow cushion diamond and the Safia 90.97 carat D Flawless round brilliant.
In a reassuring example of how the diamond industry is helping the local economy and giving employees a quality of life which wouldn't have been available to them, Safdico employs six deaf people who are being trained in fancy polishing, while lecturers come and speak to staff about HIV and prevention.
Laurence's brother, Raymond, is production director, while his son, Francois, 43, is managing director. Francois joined the company in 1986, aged 22. Laurence has been married to Francois' French mother for 45 years and the couple have two other children who have chosen not to join the family business – Stephane is an artist and writer, while Kistelle owns riding stables. Laurence's nephew and Raymond's son, Elliot, manages the design, diamond buying and manufacturing of Graff jewellery.
When the immaculately dressed Graff enters the airy boardroom, which is surrounded by vast paintings and a flat screen switched to Bloomberg TV, it is impossible to forget the legendary journey he has made to get here. He spent his first seven years in a single room with his Jewish Romanian mother on Commercial Road in London's impoverished East End. Aged 14, his marks at school were so poor, his family encouraged him to find a trade.
A newly-released coffee table book about Graff documents how, aged 15, he was sacked after three months at his first apprenticeship at a jeweller named Schindler in London's Hatton Garden, where his duties included going out to buy sandwiches for the workers. But Graff's unstoppable passion for diamonds combined with raw ambition and a talent for building client relationships brought him immense success, even at a surprisingly young age.
"I was very observant as a young boy growing up in the East End of London and wanted to learn everything," remembers Graff. "I was brought up from an early age with the values of honesty and respect and these have stayed with me all my life. I was making jewellery when I was 15 and when I saw my first diamond this set off a passion in me that has taken me all the way to being known as one of the world's leading diamantaires. Each stone has a personality. There's so much going on in such a small gem. The process of cutting and polishing a stone that comes from the ground is the same irrespective of size."
At 17, making Stars of David in his free time at a bench in his parent's house to sell to friends, Laurence Graff could not have imagined that he would open over 20 stores globally and receive four Queen's Awards for Enterprise. During his 20s, Graff travelled to the Far East, holding bi-monthly exhibitions at Singapore's department store, Robinsons, forging relationships with Malaysian, Indian and Chinese clients who have remained loyal clients ever since.
In 1974 Graff opened his first major retail store in Knightsbridge where he welcomed clients from all over the world. "The Sultan of Brunei came into the store and so did every member of the Saudi Arabian royal family and other Middle Eastern families," remembers Graff, who was already a personal friend of the Sultan of Brunei's brother, Prince Sufri.
Graff routinely helped his newly wealthy Arab clients find their way in London, connecting them with doctors and drivers. When Saudi princesses returned from their shopping trips, they would change into their new clothes in Graff's office. One unforgettable day, Saudi Prince Turki bin Abdul Aziz walked in unannounced and bought out the entire shop including a 14 carat diamond.
In 1987 the most successful jewellery auction ever was held in Geneva for the jewels belonging to Wallis Simpson, Duchess of Windsor. Graff bought the Windsor Yellows, a pair of fancy yellow pear-shaped diamonds of 51.01 and 40.22 carats respectively. Graff also bought the most historic and sentimental piece of all – the Duchess of Windsor's 19 carat emerald engagement ring. "It is one of the finest emeralds I have ever seen,' he was quoted as saying at the time. "I've got the original jeweller's invoice which was made out to 'The King'." Graff gave the ring to his wife for their 25th wedding anniversary.
Last year, when the 15th largest rough diamond ever discovered came to light in the Maluti Mountains of Lesotho, the president of Lesotho himself telephoned Graff immediately with the news. Within days, diamond experts from Safdico, Graff's manufacturing and trading arm, were in Lesotho.
In Antwerp, bidding parties each spent four hours examining the 603 carat rough stone. Two days later they had presented their sealed offers. At a record-breaking $20,500 per carat, Graff secured the stone for more than $12 million.
In May 2007, the first cut was made, marking the start of a stressful, time consuming and precise year-long operation to transform this huge rough crystal into magnificent, flawless diamonds. There is no try-before-you-buy with rough diamonds, so Graff developed cutting edge software, tools and cutting machines specially for the Lesotho Promise, as it was named, and it has since yielded 26 stones.
Integrating business and family
Graff's business became the first in the diamond industry to be vertically integrated – ie, taking a diamond all the way from acquiring it in the rough through to selling jewels in his own shops. Vertical integration continues to give Graff a leading edge in the industry, and the benefits mean the company can produce at a more competitive rate and offer a more exclusive selection of the finest stones to clients worldwide. The integration of manufacturing, craftsmanship and retail makes commercial sense and calls for new skills to complement traditional ones.
Graff buys diamonds in the rough from mines in Canada, Australia, Russia and South America but the majority come from Africa. Many are from the Premier Mine, one of South Africa's oldest mines still yielding high quality stones. Graff is also a DTC (Diamond Trading Company) sightholder, which means it is one of 93 selected companies in 33 countries entitled to buy rough diamonds from the De Beers sales and marketing arm.
Today, in order to make this vertical integration complete and capitalise on the benefits this could bring, Graff is keen to buy a mine. Last year his attempt to acquire the Lesotho's Letseng mine fell through just weeks before the record-breaking Lesotho Promise was discovered. Graff will not say where else he is searching for a mine to purchase, but it is clear that owning a mine is a huge and expensive investment and sometimes unpredictable – the supply of diamonds needs to be consistent to justify the cost.
Despite these difficulties associated with expansion, Graff admits the first major challenge he faces is finding good people. "Taking a person into your company is like taking someone into your family," he says. "It doesn't matter about the references, the truth prevails in the end."
Graff insists that the working relationship between family and non-family is good, but he says: "The main problem with working with family is that there aren't enough of them. Sometimes I wish I was an Indian with a huge family around me to join the business. Jewellery businesses have traditionally been family businesses. When you sell such expensive items, trust is everything."
Graff fully intends to hand the business over to son Francois one day. "The good part is that a family member knows in their heart that one day they will possess something very special. But when things get difficult, family members are harder to fire. It's also easier to lose your temper with family," he says.
The second major challenge is finding exceptional stones and balancing the stock in the boutiques round the world. "Diamonds are mined every day, but quality diamonds are not," says Graff.
Burgeoning demand from China, India and Russia has contributed to an increased shortage of diamonds. But Graff doesn't want to delve into the issue of how he plans to find enough diamonds to keep his shops brimming with treasures.
Graff is now concentrating on Asian expansion due to soaring growth in recent years of the Chinese and Indian economies and the increasing numbers of middle classes with disposable income.
Every piece of jewellery at Graff is a one-off. The same Graff advertising images are used in both Eastern and Western markets and it is not unusual for Graff to see the same clients at different locations. His customers keep on returning for his rare diamonds, timeless, classical jewellery and world-class craftsmanship.
Yet despite several new store openings – Tokyo and Hong Kong this year, Geneva and New York in 2008, and more to follow in Shanghai and Beijing in 2009 – haven't some of Graff's most serious buyers of high end jewellery taken a hit over the summer?
"There are more people out there with more money than ever before," maintains Graff. "The surge has been boosted by new money from Russia, China and India which in itself is reshaping the very high end of luxury even as global markets take a slight hit. New money is spent more easily than old money. There is an expression, 'Make it easily, spend it easily'. I believe we are in a boom now."
An art form
Ask most jewellers today who or what their rivals are, and most cite holidays or high spec electronic goods. Yet Graff suggests art, his self-confessed second love, is a rival to jewellery. With an average customer spend at Graff "of at least six figures" according to Graff, he's probably not far wrong. "We have pieces for £5,000 all the way to several millions," he says.
Graff himself owns a modern and contemporary art collection estimated at $250 million and elements of it adorn the Graff offices on Albemarle Street, Mayfair, including an acrobatic white sculpture of supermodel Kate Moss at the reception.
The vast majority of Graff's jewellery production takes place in Graff's headquarters, in two adjacent 18th century townhouses in Mayfair, a couple of floors below the company boardroom. Here, in a workshop thought to be the largest in the world for handmade jewellery, diamond setters and polishers surrounded by the most advanced laser welding machines on the market and top quality Leica microscopes sit in an airy, spotless room. Between 400 and 600 pieces are produced here monthly.
More than any other jeweller, Graff aligns himself closely to the art world, and to art collectors in particular, by exhibiting his jewels every February at the prestigious International Fine Art & Antiques Fair in Palm Beach. For Graff, the link between jewellery and art is natural. "I consider diamond cutting one of the greatest art forms there is," he says.