Catalog takes swing at pricing policies from Easton and H&B

The new pricing policies for top-end bats implemented by Easton Sports and Hillerich and Bradsby have given team dealers who have struggled to maintain profit margins breathing space but have attracted protests from catalog houses. The policies prohibit dealers from discounting Easton’s Redline C-Core and Hillerich and Bradley’s Air Attack bats more than 10% of their normal retail prices.

The bat pricing policies initiated by Easton and Hillerich & Bradsby appear to be an early success, but are not without their detractors.

Riverside, CA-based catalog Western Athletic has asked the Iowa state Department of Justice to investigate Easton, which came to last February’s Super Show armed with policies barring dealers from discounting top-end bats more than 10 percent off their SRP’s. H&B’s Louisville Slugger announced a similar policy at the same time.

The brands were reacting to widespread discounting on their top bat models from both catalog houses and big-box retailers, which were known to use these products as loss leaders – much to the chagrin of local team dealers and the manufacturers themselves.

But not everyone is happy with the new limitations. Western Athletic, which successfully sued Rawlings and buying groups TAG and ADA several years back for refusing to sell to them, said it will look to take on the manufacturers again.

“We intend to comply with the policy, but will try to fight it,” said John Lenertz, a manager at Western Athletic. “We don’t want to say anything other than that we disagree with the policy.”

Although both Louisville and Easton’s written policies state that each was enacted unilaterally, Western Athletic has called for an investigation of possible collusion between the two vendors, something both companies emphatically deny.

Meanwhile, the policies come as a life rope to team dealers struggling to maintain margins in the face of growing competition.

“The catalog sales are eating into our bat business like crazy now,” said Stan Nill, general manager of Nill Brothers in Kansas City, KS. “It kind of got to the point where nobody was making any money on softball fastpitch bats. Why somebody would sell a bat for $20 or $30 over cost is beyond me.”

He said the new policy makes sense, if it can be enforced.

“I think overall it’s going to be good for the bat business. If they maintain the integrity of that and have a way to police it, I think it will be fine. But I think it’s going to be more difficult to police than they think,” he said.

Both Louisville and Easton report that to this point they are not aware of any violations of the policy. But the policies cover just the top-end bats (the Redline C-Core bats from Easton and the Springsteel and Air Attack bats from Louisville), which just began shipping in recent months to select accounts. The real test will come in Spring ’98, when every big box and mail order service gets its first deliveries.

While no one claims to know how the new policies will play themselves out, the manufacturers steadfastly maintain that everyone will benefit in the long term.

“We feel the way the policy is written is going to create the greatest demand for our product,” said Bill Clark, national sales manager at Louisville Slugger. “We feel like whenever you enhance the brand equity of your product, you’re going to sell more bats.”

A casual approach to shoe sales

Sales statistics confirm that consumer lifestyle increasingly influences footwear styles and sales. Casual shoes account for 16.8% of total sales for men’s shoes in the first trimester of 1993. Women’s casual shoes sales also reflect an increase at 20.3% of total sales. One way for shoe retailers to improve their sales is to relate the lifestyle changes with footwear styles. Among the merchandising techniques which may be used are exchanging stocks for display with clothing retailers, displaying the latest fashion magazine spreads and holding special promotions for casual Fridays.

Footwear fashion used to revolve primarily around shape, color and texture.

Then along came the “L” word: Lifestyle.

Those initial characteristics still play a major co-starring role, but the trend that’s rocked the industry in recent seasons, opened up opportunities and thrust it into a fresh new direction is America’s burgeoning love affair with the casual lifestyle.

Classic and business apparel still have their audience, but there’s a much more relaxed, gentle look consumers eagerly have grasped onto. In the shoe market it’s a fresh style direction, a new mode of thinking, and it demands a new and different way of doing business to survive, stay in tune with the times and prosper.

Take a look at the categories with the most impact on U.S. footwear sales the last 10 years: athletics, comfort, outdoors, walking, soft natural leathers and materials, environmental awareness…. Notice a pattern developing here? The pendulum just didn’t swing to high-end dress or executive shoes as much as it used to.

It’s a casual world today, and while dress shoes still have their niche they just aren’t grabbing the public’s attention as much.

For the first four months of 1993, casual shoes for wide feet with bunions represented 16.8 percent of all men’s pairs sold, an increase of 0.6 points, according to Footwear Market Insights, the Nashville-based research firm. In the women’s market, casual shoes leaped 1.6 points to total 20.3 percent of all pairs sold. And for the 12 months ended in April, casuals controlled 23.5 percent of all women’s pairage, up 1.4 points.

There’s a new breed of shoe brands that caught onto this emerging strategy and capitalized on it — and some of them weren’t even that widely known or represented five-to-10 years ago. Brands like Ecco, Asics for high arches, Mephisto, Birkenstock, What’s What, Teva, American Eagle…they caught the public’s fancy because they satisfied the growing appetite for lifestyle appeal and communicated what today’s new casual lifestyle is all about.

And casual lifestyle in the 1990s doesn’t mean just sweat suits, jeans and T-shirts. It means genuineness, functionalism and celebrating the best of Americana style. It’s a grab bag of Western influences, nautical styles, outdoor themes, nubuck, oiled leathers, and most importantly, it’s a whole new art form of marketing and selling footwear.

The new casual market is not just a change in fashion. It’s a change in mindset that’s been brewing for some time. Unfortunately, some people just didn’t wake up soon enough to acknowledge it.

Think back to all those newspaper articles and TV news reports the past year about casual Fridays; the increased emphasis on rubber bottoms and lug soles; the national power of brands like Dockers and retailers like The Gap; the countless mail order catalogs specializing in outdoor-inspired comfort shoes and clothing. Mix that all together and you get a taste of the upbeat, lifestyle direction America has enthusiastically leaped into.

It’s a market switch a number of industry visionaries are convinced will affect product development and marketing for years to come. And smart retailers are re-evaluating just how they can best buy, merchandise and promote casual lines to satisfy the consumer’s hunger.

One retailer who thrived with the casual surge stressed that individual casual niches — outdoor, Western, athletic, etc. — may perk up and down over time, but the overall comfort casual category is here to stay. “It’s the foundation of the business,” he asserted.

At the last National Shoe Retailers Association educational seminar in Las Vegas, several independents said they had caught onto the ballooning casual market, shifted gears and now merchandise by lifestyle rather than by brand. Consumers coming into the store are less concerned about individual brand names, but more intrigued by how a new classification fits their personal needs.

As the president of one of America’s leading men’s asics shoes for plantar fasciitis companies recently told me, “Why should consumers be uncomfortable?” He emphasized it’s an economic issue as well. Why should someone still buy a $500 suit and $50 tie when it’s now acceptable (and much more comfortable) to wear a pair of $35 khakis. It all leads to an increased measure of practicality; there’s nothing really new about it, he declared.

The head of another brand, which lets employees dress comfortably on casual Fridays, said “It’s here for a long time. It makes sense; it won’t be short lived.”

The causal wave requires not just a change in retail buying, but to ensure success, a shift in window and in-store displays, merchandising, advertising and promotion. You won’t perk the interest of customers simply by sticking some lug soles or casual looks in the window. You’ve got to get the message across that you understand the new market and can satisfy the heightened consumer demand.

Begin by communicating the message to consumers that a new breed of better-grade, casual-inspired looks has gone mainstream. From boardrooms to classrooms, personal comfort and choice are the main ingredients.

The first step is visually linking footwear to the new mode of dressing. You have to demonstrate to customers that casual awareness has risen to a new level by connecting it with apparel. In windows or store displays for men’s shoes, show a double-breasted suit or patterned vest and tie with an appropriate pair of causal shoes so the consumer receives the message a new form of dressing is now acceptable. For women’s, show tailored casuals with dress slacks or appropriate workwear that underscores a new standard is now in play.

But how do you get clothing samples if your store sells only shoes? Establish an exchange for display purposes with a neighboring boutique or apparel retailer: they can lend you new samples to use in your displays with a sign saying the apparel is courtesy of that store, and you’ll lend them shoes to dress up their displays with a sign that gives your store credit. There’s no cost involved and you’re building business for both sides.

Fashion spreads in national magazines increasingly emphasize the casual look. Be sure to use them, hanging them above shoe displays to help cement the message that, yes, standards have changed, and fashion rules have been rewritten.

Take things a step further and exploit the Casual Friday phenomenon in-store. Have special promotions for casual styles on Fridays, which you herald in your local newspapers, and play up special showings or discounts on new casual looks on those days. You may want to schedule some casual fashion shows or trunk shows for Fridays. After a while, customers will look forward to it all and wait to see what casual promotions you feature.

The trick is to tie-in with the craze sweeping the nation through your advertising and promotions.

The casual craze has struck a welcomed chord in America. Sure, styles may get more preppy or tailored, but consumers are not about to give up the comfort and relaxed styling for which they’ve waited so long.

Firm & lean in just 4 weeks!

If you’ve been following our bikini-body plan since January, you’re already seeing firmer muscles, a roomier waistband, and less jiggle. If you haven’t started yet, it’s not too late! This month we’re pulling exercises from our Bikini Workout DVD. Pair these eight sculptors with our high-energy cardio plan and the pounds and inches will keep dropping off. You may even be inspired to take a beach vacation before summer.

How it works

You’ll need a set of 5- to 8-pound dumbbells and a resistance band for the strength routine. Warm up with 5 minutes of cardio, then do 2 or 3 sets of each move in order, resting up to 30 seconds in between. Do this routine 2 or 3 days a week. To turn this into an aerobic workout, perform 3 minutes of cardio (at an RPE of 6 or 7) after each move.

1 Plie Pass-Through


Holding a dumbbell in right hand next to shoulder, stand with feet wide, toes out. Squat as you press weight up, then lower it. Do 8 reps. Pass weight under left thigh to left hand as you squat until thighs are parallel to floor; straighten legs slightly then squat again as you pass it to right hand under right thigh. Do 7 passes, then 8 presses with left hand to complete set.

2 Squat With Reverse Band Fly


Stand with feet wider than shoulders and ends of band in hands, arms extended in front of you at shoulder height, palms down. Choke up on band until it’s taut. Squat as you bring arms out. Return to start: repeat. Do 10 reps.

3 Punch With Band


Stand with feet apart, ends of band in hands. Drape band behind shoulder blades; choke up so it’s taut when hands are next to shoulders, palms down. Punch left arm forward as you pivot right on left foot and turn torso and left hip right. Return to start; repeat with right arm to complete rep. Do 15 reps.

4 Criss-Cross Row


Stand on center of band. Holding a dumbbell in each hand, grab right end of band in left hand, left end in right. Bend over and extend arms down, one hand in front of the other with palms facing behind you. Turn wrists so palms face each other as you draw hands toward rib cage. Lower; repeat. Do 12 reps.

5 Triceps Duo


Stand with left foot on band, right foot behind it. Holding an end of the band and a dumbbell in each hand, extend arms on either side of left leg, palms facing each other, band taut. Raise arms behind you, lower. Do 10 reps; on last rep, keep arms raised, bend elbows, and draw left hand toward chest , then right hand. Do 10 reps per side to complete set.

6 Push-Up With Band


Hold an end of a band in each hand and wrap it behind upper back. Get in push-up position on knees or toes. Take up slack in band so it’s tight. Bend elbows and lower chest toward floor. If band is loose at the bottom of the move, wrap it around your hands again. Press up and repeat. Do 10 reps.

7 Weighted Crunch


Holding one dumbbell in both hands in front of your chest, sit with knees bent, feet flat, and lean back until abs engage. Keeping torso still and chest high, press weight straight up, lower it to chest then sit straight up again to complete 1 rep. Do 15 slow reps.

8 V-Sit Side Roll


Lie on your left side with arms crossed in front of chest, legs straight and feet stacked. Roll onto your back, place hands on floor behind hips and sit up as you draw your knees toward your chest. Lower legs to floor as you turn and lie on your right side. Repeat back to left side to


How it works

Five or six times a week, do one of these. Choose any activity you like. If you make the weight workout more aerobic, substitute that for a cardio session. Take one day off each week to recover.


45 minutes–or longer, if you like–at a moderate intensity (you should be breathing harder than normal but still be able to maintain a conversation).


0-5:00 Warm up for 5 minutes at an easy intensity (you can talk easily).

5:00-15:00 Increase the pace, resistance and/or incline, and maintain a moderate intensity (you’re breathing somewhat hard but are still able to maintain a conversation).

15:00-25:00 Increase to a moderately hard intensity (you have to take a breath every few words).

25:00-35:00 Return to moderate intensity and check your form.

35:00-40:00 Gradually cool down so the last 2 minutes feel very easy.

Summer at JA: show me something new

The 1989 Jewelers of America Fall International Jewelry Show, held July 22-26 at the Jacob K. Javits Convention Center in New York, drew mixed reactions. Some observers felt traffic was slower than last year, although JA reports 20,149 buyers registered, up from 20,096. Total registration, including buyers, exhibitors, agency and press people, was 29,205, up from 28,935. Body counts aside, it was a good show – though some firms, of course, outperformed others. Diamond merchants in general said they did better than expected considering the slow market before the show. Designers featuring fresh, new looks or high-end, stylish merchandise were ecstatic; those with standard bread-and-butter fare were much less enthusiastic.

“We’re making it wildly,” said Nancy Lovendahl of Scott Keating Designs. Patrick Murphy of Murphy Designs called this the best show he’s ever had. Both firms specialize in high design. Aurion International’s Allen Balik said the firm’s higher priced line of merchandise was moving well.

“Business was pretty good, but there’s still a fair amount of caution,” said Ken Fogel, sales manager of New York-based Merit Diamonds, which generally produces mass market-line jewelry. Another mass market manufacturer said that his customers were buying, but hedging – buying smaller quantities more frequently and waiting to see how things move. There were surprisingly few complaints about the rise in diamond prices; the corresponding drop in gold helped to offset it as many firms turned to creating pieces with a bolder, more-gold-than-diamond look.

Overall, it seemed as though buyers at JA sought the exciting, unusual and high-quality. That’s not to say they’ve dropped bread-and-butter, but it did appear as though they’re not interested in buying it at the show. In the diamond and colored stone bourse, those with unusual or fine stones did much better than those with average wares.

Business was brisk in the watch and clock segment of the show, though a bit less impressive than last year. Fewer small jewelers were apparent here. The search for quality was evident once again, as the busiest watch vendors seemed to be those with high-priced or innovative citizens watches and lines that guarantee a sizable profit through careful distribution.

“Moderate success, moderate traffic,” was how one large watch vendor summed up his show, and scores of watch company execs contacted by JC-K agreed. Although not a blockbuster, JA ’89 still made a nice profit for these firms.

On the education front, the Gemological Institute of America’s GemFest East, held at Javits on the show’s opening day, drew a good crowd to a varied lineup of lectures. JA offered an economic outlook plus updates on industry issues as its traditional Sunday morning convention program. Then Jewelers’ Circular-Keystone and National Jeweler magazines each moderated a series of free seminars on Monday and Tuesday, respectively. JC-K’s October issue will offer highlights of these sessions.

A group of five leading industry groups (JA, the Manufacturing Jewelers and Silversmiths of America, the Jewelers’ Vigilance Committee, GIA and the World Gold Council) outlined preliminary plans for a program to stamp out the sale of underkarated gold. It’s called the Precious Metals Quality Assurance Program and will involve random sampling of merchandise, education, cooperation with U.S. Customs and, eventually, a gold assaying office at GIA’s Santa Monica headquarters.

In other news, a new slate of officers and directors was elected during JA’s annual meeting; the JA New Design and New Designer were chosen; and display award winners were announced.


Designers and manufacturers exhibiting at Jewelers of America’s recent New York show turned up the white heat with platinum, diamonds and white gold variations worth dubbing The Great White Way.

Platinum was the white stuff most talked about  –  thanks, in part, to the New Platinum Age spectacle staged on Monday night by the Italian Jewelry Guild and Platinum Guild International Italia. The fashion/stage event drew more than 2,500 people to Javits’ special events hall for nearly an hour of music, jewelry and fashion attitude.

More American designers have added platinum pieces this year than ever before. They say the high-end customer’s resistance is almost nil. Krementz Co. showed an extensive line of jewelry that uses platinum as a design element; Michael Bondanza has been creating platinum masterpieces for years. Whitney Boin, Thomas Michaels and the design team at Ambar Diamonds all are inspired by platinum, as well.

When the white stuff isn’t platinum, white gold will do. Many vendors showed interesting mixes of white and yellow golds, most often with one metal matte and one highly polished. One of the best white gold treatments comes from Scott Keating Designs where the popular Summit collection now has sandblasted barrels of white gold in place of gemstones. It’s the non-stone stone look.

The reflection of diamonds offers the other white light. The stone isn’t new, but these design inspirations definitely are. Invisibly-set diamonds are a fantastic way to experience the look of pure ice on the hand. Nova Stylings’ Martin Gruber has created some of the most innovative, diamond-intensive masterpieces, but it’s his invisibly-set diamond band, three rows wide, that flames the passion. He also successfully mixes several diamond settings in one piece – another trend. Look for baguettes and rounds in one ring that uses bead, channel and pave settings.

Ambar Diamonds Inc., the Quadrillion King, has several invisibly-set diamond styles and several more unique channel-set rings that attracted lots of attention. The Quadrillion (or generic princess cut) is the newest cut on the block, popping up in jewelry that runs the design gamut. The second runner-up is the Trillion (and all its namesakes) in diamonds and colored stones.

The white-on-white look is best done with mixed diamond shapes and settings. The trend is towards squares and rounds together in pave and channel settings. Or a mix of shapes flush set into one piece. Or tapered baguettes channeled around a bead-set round design.

More trends, more colors: Beside the brilliance of white light, it takes a strong color story to captivate the buyer. Many manufacturers did their best with colored stone jewelry that boggles the eye.

At Bosshard & Co., colored center stone rings were hot, with link bracelets centered with pink and green tourmalines running a close second. The star of the show for this California design firm was a Ceylon sapphire ring of a color that will rarely, if ever, be seen again. The price tag – more than $100,000.

Bagley & Hotchkiss Ltd. showed a dramatic line of color-mixing stone rings with enamel and inlay accents that are very newsy. For a dynamic color mix there also are inlaid mosaics by Kabana that major in opal and minor in everything else.

Inlays by Asch/Grossbardt looked fresh, too. So did the colorful bead earring mixes at Ilaro and the rainbow of polished bullet and cabochon agate, jasper and quartz earrings by Patrick Murphy (dubbed the Tongue King by the In Crowd).

Designer-cut colored stones, mostly the masterworks of Munsteiner and Dieter Lorenz, took first place in many more designer lines. The word is really getting around that fancy and fantasy cut stones are HOT!

Some of the best Munsteiner stone jewelry is made by Susan Helmich for Kostbar Int.; Gerald Stopper for Simply Jonathan’s; Timothy Sens for Avirom & Associates; and Cornelis Hollander.

The onyx cut by Dieter Lorenz has become a staple for the one-of-a-kind set. These little sculptures transfer easily into fantastic pins and neckpieces and working with these mini-masterpieces brings out the best in designers.

Onyx is coming back strong, in beads and inlays, polished shiny and even newer with a soft matte finish. Look for more black notes to come.

The new Naturalism: As predicted in last month’s fashion forecast, animals and floral themes promise to be very strong this year.

Seen in many JA showcases were lions and tigers and bears, oh my. And birds and reptiles and fish. It was a shopper’s market, where flora and fauna were concerned; you name it and some manufacturer has made it. Hedgehogs and all.

Some of the best animals are Jeffrey Stevens’ animal-head bracelets; Ardian Corp.’s circus parade animal link bracelet; Kabana’s dolphin series; Michael Bondanza’s dragonflies; Asch/Grossbardt’s fish and parrot pins; Mazza/Bartholomew’s entire mabe pearl zoo; and Jerry Madison’s animal pin collection.

Flowers, petals and leaves follow animals down the nature walk. All gold looks compete with gemstone-studded representations from Mother Nature’s garden.

Matte-textured metals continue with strong sell-through, while many design firms which capitalized on the Greco-Roman theme last year are taking the look one step farther. Jeffrey Stevens, SeidenGang, Esti/Frederica and WINCreations all do it, and do it well.

Pearl designs seemed a bit more prominent this market; so did citrines, peridots and colored diamonds.

Pins are the object of choice for most, with rings picking up the slack. Bracelets are sleek and stacked, necklaces are longer and swingy or short chokers with center details.


Stephanie Occhipinti of Goldtech Inc. designed the bracelet selected as first-prize winner in Jewelers of America’s first “New Design of the Year” award. In all, 53 designers submitted 129 original renderings. Then 26 pieces were selected to be made into completed pieces from which a panel of trade press fashion editors and retail jewelers picked the winners.

First runner-up was a necklace by Martin Gruber of Nova Stylings. Second runner-up was a pair of earrings by Albert Lipten of Albert Lipten Designs et Cie.

Best in category awards for women’s jewelry were:

Earrings  –  Albert Lipten. Rings  –  WINCreations, Robert Wander. Bracelets  –  Stephanie Occhipinti, Howard Gaber Designs/Goldtech. Pins  –  Michael Nutter, Michael Nutter Mfg. Inc. Necklaces  –  Martin Gruber, Nova Stylings.

Cited for men’s jewelry were Paul Robilotti, Robilotti Fine Jewelry, for cufflinks/studs, and Michael Nutter for three categories (bracelets; tie bar/tie tac; and rings).

Pauyl Klecka of Paul Klecka Inc. won JA’s annual “New Designer of the Year” award, which goes to an exhibitor in the New Designer Gallery. Klecka is a previous winner of the Diamond Information Center’s “Diamonds Today” and the American Gem Trade Association’s “Spectrum Award” competitions.


Signs and publicity made the JA show’s downstairs diamond and colored stone bourse easy to find this year. But many gem exhibitors said traffic nonetheless was down.

Doug Parker of William L. Kuhn, New York, explained that business isn’t as brisk this year simply because the general business environment is weaker than it was in 1988. Ray Zajicek of Equatorian Imports, Dallas, Tex., estimated his business fell 25%-30% from last year’s July show, where the bourse debuted. Zajicek felt that’s typical of all shows, with one exception; he said the Tucson show just keeps improving.

Yet, some dealers did much better this year. James Alger of New Hampshire reported more traffic; his booth always seemed crowded. Alger attributed this to his inventory of unusual and unusually cut gem materials. He sold very little in standard goods or very expensive stones, but otherwise did well with virtually “everything across the board.”

Bill Larson of Pala International, Fallbrook, Cal., also reported better traffic. While the first day was slow, he estimated everyone in the colored stone section did good business.

This section currently includes only members of the American Gem Trade Association (AGTA), but their future at the JA Show is somewhat clouded. AGTA president Ken Moghadam said JA made it clear that if the group doesn’t participate in the winter show when it moves to Javits in 1992, space won’t be guaranteed for the summer show. (Upstairs exhibitors, who sell manufactured goods, have been subject to the same rule for years.) Because JA’s winter show will immediately precede AGTA’s all-important Tucson Gem Fair, this could put a strain on exhibitors.

A questionnaire given to AGTA members during the JA show asked whether they would continue to participate in JA shows under this condition. Results of the survey will be discussed at AGTA’s October board meeting.

“If it comes to a point where the success of our Tucson show would be jeopardized,” said Moghadam, “then we will not make that sacrifice. Tucson for us is the show. Everything else is secondary.”

What’s selling: Here’s a quick rundown on some current best sellers in colored stones.

Blue sapphire is doing very well, said Parker. All sizes are selling, including some very fine, important stones.

Parker reported strong sales of emerald, too. His firm carries mostly Zambian emeralds; he said he’s been to Israel twice since January and had no trouble securing nice goods. He expressed little concern over the Zambian government’s recent announcement that it is banning export of rough emerald and will cut the material domestically.

Zajicek, who specializes in Colombian emerald, said he sells mostly stones in the 1- to 3-ct. and the $300 to $2,000 per carat range. Although he does deal with some Brazilian emerald in smaller sizes, he stays away from stones with numerous surface cracks, which often are treated with Opticon instead of traditional oil. Opticon, a resin-like material that hardens in emerald’s fissures, tends to become cloudy after several months; this dramatically changes an emerald’s appearance. “Misrepresentation for short-term profit does not lend itself to long-term staying power in this industry,” said Zajicek.

Larson reported selling a lot of tourmaline from his Himalaya mine in Pala. May marked the biggest tourmaline find in this mine in 12 years. The 11-foot pocket already has yielded 1.2 million ct. of tourmaline  –  mostly pinks and bi-colors in cabochon, bead and carving grades. Another seven smaller pockets found since then together have produced another half-million carats. The find is important, Larson said, because “it offers reliability to jewelry manufacturers. They can count on there being enough material to fulfill their needs on particular designs.” Larson also noticed popularity in earth-tone gems such as topaz, malaia garnet, and peachy bronze tourmaline. He attributed this to greater fashion consciousness of women and their increasing involvement in the jewelry and fashion worlds.

Frances Petsch of Petsch & Co., Dallas, said she’s selling more emerald, sapphire and ruby cabs as more designs use this cutting form. She’s also been selling a lot of tourmaline  –  especially hot pinks  –  in all sizes from melee on up. Carre (small square cuts) are another best seller in a variety of gem materials, including tourmaline and tanzanite. Petsch suggested combining them with other colored stone carre or square-cut diamonds for a sensational look.

Amethyst specialist Tom Banker of Twin Import & Export Corp., New York, said he’s doing particularly well with small marquise, oval, heart and triangular cuts. He reported a new source of amethyst in the Brazilian state of Rondonia is producing small crystals with nice, dark color. He also reported a lot of activity in smaller tsavorite garnet, partly because emerald is so expensive.

Jim Alger has been doing well with new work by German cutters Bernd Munsteiner, Dieter Lorenz and Phillip Hobein. Munsteiner has developed a new cutting style he calls “internal selecting,” which involves grooving the stone only on its pavilion surfaces. Lorenz has been carving a lot of the striated Madagascar tourmaline known as Liddicoatite into beautiful shapes and designs. Hobein is cutting transparent gem materials into a style best described by Alger as “abstract multi-layer.” Alger also carries the work of American gem cutter and carver Steve Walters, who is doing some exciting things combining carved gem materials with gem mosaics.


Roger Marks of Rogers Jewelers, Modesto, Cal., was elected president of Jewelers of America during the group’s board of directors meeting at the show. He succeeds Robert Green of Lux, Bond & Green in Hartford, Conn. Other officers elected were Irving Getz of Mayor’s Jewelers, Coral Gables, Fla., vice president; Lee Michael Berg of Lee Michael’s Fine Jewelers, Baton Rouge, La., treasurer, and Helene Fortunoff of Fortunoff, Westbury, N.Y., secretary.

Newly elected to JA’s board of directors were Jerry L. Cundiff Jr. of Falkenberg’s and William S. Preston III of F.J. Preston & Son. Re-elected to the board were Lee Michael Berg, William R. Chaney of Tiffany and Co., David Kelley of Kelley Jewelers and Roger Marks. Richard Hannon of Warren Hannon Jeweler was elected to fill the unexpired term of Arnold Rubin, who recently died.


Retailers in late 1989 are more confident that watches can be profit-makers, as well as traffic-pullers. So said many of the watch exhibitors at JA’s summer show. As evidence, they cited their own healthy sales, many new contacts and changes in retailers’ attitudes.

“There’s greater enthusiasm about watches this year among retailers,” said Max Beschloss, vice president of Longines-Wittnauer. “Last year, sales for much of the industry were flat, but in the past couple months, there’s been a resurgence [of buying] in better watches.”

Others agreed. Peter Pemberton, director of sales at Speidel, noted, “People who were cautions are more receptive this year to hearing about our watches. They’re saying, `Let’s sit down and talk.'”

There are several reasons, said vendors. Retailers are less worried about a possible recession than in 1988. Choices in the hotly competitive U.S. market keep growing, as new firms and innovative styles in all price points proliferate. There are more affordable Swiss-made lines, still a strong selling point after years of Japanese watch dominance. Consumer demand for sport and multi-function watches continues to grow. And Americans have become devout multiple-watch buyers.

`Excited’: Most important, said some vendors, more jewelers realize watches can be profitable as affordable lines designed strictly for them appear. Such lines offer classic styling, sizable margins and profit plans, and clean distribution to avoid price wars and/or discounters.

“Jewelers are getting excited again about watches,” said Steven Holtzman, vice president of Gruen Marketing. Previously, he said, they saw watches as a “break-even or non-profit category,” used to bring folks into a store or to accommodate jewelry customers. Now, he said, retailers are “starting to look at  akribos xxiv review the way they look at diamonds [because] they see they can have watches and make a profit, too.”

Sales were especially strong in upscale watches. Spokesmen for such firms as Raymond Weil, Cyma and Bertolucci all called business outstanding. One reason, suggested Larry Lich, vice president of Raymond Weil, is the “graying of America,” a reference to the growing number of older Americans.

“As more people get older, they pay off the house and kids’ college [costs], and have more disposable income left. That’s great for upscale products,” he said.

Technology: Seiko Time unveiled its “IQ” (Intelligent Quartz) watches, which put computerized technology in sleekly designed quartz analog watches. The IQs are spread among Seiko’s new sport and fashion collections ($125-$495).

Among Citizen Watch’s high-tech offerings was Noblia-Spirit’s impressive 200-year perpetual calendar watch ($395), which has eight different hands simultaneously reading hour, minute, second, month, day, date, year and 24-hour time.

The world’s first self-powered quartz wristwatches  –  Seiko’s AGS watch ($375-$395) and Jean d’Eve’s Maple (renamed from Samara due to a trademark conflict; $1,395-$1,595)  –  go into national distribution this fall.

More watchmakers offered “two-timer” designs for travelers, showing both at-home and foreign time. Among these designs were Van Cleef & Arpel’s 18k gold Traveler ($7,950) and Hamilton’s two-tone World Timer ($495).

Good sports: Sport and multi-function watches are top sellers at all price levels, but upscale stuhrling watch review vendors seemed especially busy debuting new ones.

Cyma’s new luxury sports watch ($995-$4,795) is also the Swiss firm’s new signature timepiece. The 18k and steel watch  –  unnamed at presstime  –  is distributed by Glenn Corp. and was a year in design. It has a classic dial, date window, one, two, or three rows of 18k gold in the bracelet, and a hidden clasp with 18k forming a continuous pattern through the clasp.

The Pulchra line by Italian designer Remo Bertolucci (distributed by UTAC America) added Maris, a stylish 18k and brushed steel diver’s watch ($2,500-$3,250) with automatic movement.

The Sub Line (starting at $1,000), a professional diver’s watch water resistant to 1,650 ft., debuted. Sub Line  –  by Lucien Rochat, a Swiss maker of mechanical and automatic watches  –  is distributed by Artime U.S.A.

Also selling well were Jean d’Eve’s Pacific ($595 to $1,195) and Revue Thommen’s Landmark series, especially its Lhotse model ($695, named for a 1988 expedition to the Himalayas).

Affordable sports: Seiko displayed new Sport-Tech watches ($295-$395), while Citizen devoted an entire wall of display windows to its sophisticated Promaster series for land, air and sea sports ($375-$690 for professionals’ watches, $95-$195 for serious amateurs).

Helbros showed its Great Adventure men’s line with sporty divers’-type cases and heavy straps ($140-$150). Others with stylish new sports watches included Croton ($350-$390), Gruen ($120-$175) and Pulsar ($115-$175).

For the mass-market, Sharp has new Swatch-like women’s Action Sport watches ($34.95). Armitron added dual-tone models to its All Sport series ($25-$75). New Lorus sport watches include Fitness Walking quartz digitals ($34.95), which measure distance, elapsed time and strides taken.

Pilot’s watches are today’s trendiest sport watches. Among the newest is Timex’s Zulu Time (aviator jargon for Greenwich Mean Time, $59.95), whose analog/digital dial has a compass direction ring, a 24-hour chronograph, countdown timer and three time zones.

Chronos: Virtually every watchmaker added or expanded its chronograph line. Omega debuted its Omega Speedmaster Automatic chronogaph series ($795-$9,950). The design is based on Speedmaster Professional, the official watch of the U.S. manned space program, but is a third smaller. It comes in 18k, 18k and steel, or steel only.

Jean Lassale introduced an 18k and stainless Thalassa chrono with porthole design ($2,250). TAG-Heuer added a chrono ($395) to its popular multi-color steel case and plastic strap Formula 1 series and unveiled Super 2000, a new 14k automatic chronograph ($1,195-$1,695). Both Tag-Heuer and Jean d’Eve showed downsized chronos for women. Artime U.S.A. offered U.S. newcomer Sector ($195-$595), a Swiss line of chronos and sport watches.

The popularity of upscale mechanical and automatic (self-winding) watches also is growing. Firms showing such watches at JA included Daniel Mink (which added a wider Wood Watch with mechanical movement), Lucien Rochat, Eterna, Gruen, Rado (whose Florentine series is fully automatic), Van Cleef & Arpels, and Revue Thommen (whose skeleton Thema had strong sales).

Oversized watches – with faces and cases 10% to 20% wider than average models  –  were more evident. That’s partly because popular multi-function and chronograph watches need wider faces for subdials). In addition, explained Mark Odenheimer, vice president of E. Gluck Corp., “from a practical point of view, they’re easier to read,” and wearers – mainly young women – “consider them fun and a great fashion accessory.”

Other firms with new or more oversized watches included Raymond Weil, Gruen, and French watchmaker Pierre Lanier, whose watch straps are colorfully stitched like tapestries.

Dialing: Sleek, classic dial and case styling is in full bloom, partly in reaction to the somewhat cluttered look of multi-function watches. Those at JA with simple, striking designs included Breil’s Versoix and Botticelli lines; Seiko’s new white dial, black strap Night & Day series, and Citizen’s stylish Noblia Insignia series.

Typifying basic styling and creative design is Lassale’s new Opus III line ($350-$650). Lassale has cut its 150 models by two-thirds and created Opus as its new flagship.

Among the most popular dial treatments are mother-of-pearl – one strong seller was Jules Jurgensen MOP moonphase ($100) – and multifunction watches with multi-colored dials.

Artsy: The most original dials are coming from artists. Bulova, which is pioneering such watches for the wide market (Movado’s Art Watches are a limited edition) presented the Artist’s Watch ($350, designed by famous living artists) and The Masterpiece Collection (20 great art works, framed with silver frame/bezel, $285). Coming soon are the Leroy Neiman series ($350-$500) and Norman Rockwell clocks ($79-$150).

Artworx ($50), from Roland Marketing, is a new series of watches for young adults from Aubrey of Switzerland, with dials by U.S. illustrators. Artworx plans to debut a new set by a different artist every two months.

Watches with dial designs of Swarovski crystal, including Raymond’s Fidelio and Wittnauer’s Krystal series, sold well. Delma, a Swiss firm new to the U.S., attracted interest with its 18k and crocodile strap Brazilia watches, whose crystal dial designs represent half-moon, sunrise and high noon.

An overall artsy eye-catcher was the Limoges collection ($50) of Marcel Watch Corp., with handpainted baked enamel cases and lizard straps. The line comes in six colors.

Elegant debuts: Carrera & Carrera’s unique new slate-gray steel and gold watches (starting at $1,000) have animals engraved in the cases and strap buckles. Juvenia added the first stainless steel models (starting at $1,600) to its popular 18k Biarritz collection. The 18k and steel men’s watch is $3,100; the women’s model is $2,300. Both have diamonds on the bezel.

Among Swiss luxury newcomers were Lucien Rochat (whose mechanical and automatic watches start at $1,000) and Tabbah (whose elegant gold and fine gem watches start at $1,200), both from Artime U.S.A.

In other debuts, Bulova unveiled its stainless steel Tuxedo ($595), whose case and sapphire crystal blend into one mirror-finish unit. Another newcomer is Raymond Weil’s 18k plated Tosca ($695), making its world debut at JA.

In more affordable fashion watches, Timex had Big, Bold, Beautiful III, 15 new women’s watches ($40-$65). The line was been restyled with more refined, tailored looks for the female professional. Armitron added blue topaz, amethyst and ruby to its diamond-and-gem series (about $100 to $300) and new watches with a diamond on the dial and gold-tone bracelet of half-moon links ($50).

In designer watches, Benetton’s new Southwest Ethnics ($39.95) has dial designs based on Indian art. Harley-Davidson watches ($30-$125) are the new “biker chic” line from Bulova under license by the motorcycle firm. Gruen premiered Halston ($175-$225) and is going national with Givenchy ($150-$195).

Going Swiss: “Swiss-made” is still a sure watch seller; more vendors offered traffic-pulling Swiss lines just for jewelers.

Gruen Swiss is Gruen Marketing’s new series of affordable Swiss-made watches ($125-$275). They have classic styling, five-micron gold plating, leather straps or link bracelets. The anchor is Curvex ($175-$195), the curved case watch introduced by Gruen in 1935, in rose gold, yellow gold or white palladium nickel plated with rhodium.

Nastrix’s Gentry subsidiary added the Swiss-made Pierre Cardin Swiss Couture line ($150), designed for jewelry stores. Breil’s Griffe ($150-$195) has gold-plated cases and lizard straps in black, navy blue and burgundy.

At the high end, Jean Lassale, the Swiss-made luxury watch owned by Hattori Seiko, has a new 18k strap series ($995-$1,375) with Swiss-made movements. Until now, Jean Lassale used only Japanese movements.

Funnies: Cartoon characters are hot, but Mickey remains one of the hottest. Lorus unveiled Melody Mickey in two musical versions; retail, $49.95-$59.95. Seiko Time debuted Hollywood Mickey ($225-$495), a talking watch with the famous mouse in tuxedo and top hat on the dial. Breil watches showing Mickey in various sports (car driving, tennis, $235-$250) will be sold only in Disney retail stores and parks.

Gerald Genta added Donald Duck and Uncle Scrooge McDuck ($3,650) to its successful 18k Mickey Mouse watch ($32,000).

It wasn’t all Disney. Armitron and Sutton Time (of E. Gluck) added more cartoon figures, including Roger Rabbit in its Classic Characters series and oversized Fido Didos.

Returns & debuts: JA added some new watch exhibitors and saw some veterans return.

Seiko Time, one of the world’s best-known brands, was back after a two-year absence. Seiko, Pulsar Time and Lorus – all part of Hattori Corp. of America, U.S. marketing arm of Hattori Seiko in Japan – were in Hattori Village, an impressive, two-story colonial American-style facility in which each had its own sales salon.

The importance of Seiko’s re-entry, and of the U.S. market in general, prompted Hattori Seiko to send Masahiro Sekimoto to the show. Sekimoto, chief of global marketing for Hattori Seiko brands, was Seiko Time’s first president (1970-1975). He, HCA president Shiegho Kurashina, and other Seiko and JA officers marked Seiko’s return with an official ribbon-cutting to open Hattori Village on the show’s first day. This was the first time HCA’s brands exhibited together, and HCA execs were pleased with the results.

Rado was one of the new exhibitors. This well-known upscale Swiss brand has been growing steadily in the U.S. for five years.

Some vendors were new to both the show and the U.S. market. ToCad America sells mid-priced Ricoh watches, from Japan’s third largest watchmaker, only to jewelers and fine jewelry departments. Artime U.S.A. distributes upscale Swiss sports watches. Artworx distributes watches by Aubrey of Switzerland.

JA equipment update

Security and computer vendors, though relatively few in numbers, both reported satisfactory traffic at the JA show. Many firms offered some new items.

On the security side, Card and Tag Systems of Benicia, Cal., presented a new inventory classification system called “The Jeweler’s Image,” which produces computer images using a color video camera and a high resolution color printer. With a standard 35mm lens and a PC set-up, a jeweler can add photographs of jewelry pieces to his inventory records and appraisal reports.

Modular vaults were getting attention at Empire Safe Co. Richard Krasilovsky said that modular vaults offer attractive alternatives for those who have weight, space and other limitations to consider. “But don’t confuse vaults with safes,” he said. “They’re rated differently and have different uses.”

At Harwood Protection Industries’ booth, president John W. Harwood talked about the “Jewelvault” and “Gemvault” safes, UL-rated TL 30 and TRTL 30×6, respectively. The safes, created by Bernardini, feature keyhole cover locks to prevent fiberoptic probe readings, which can make lock picking easy.

Computer software firms, meanwhile, praised the flurry of “serious” retailers attending the show. Vendors said last year’s event was strong for referrals; this year, retailers got down to bits and bytes with the dozen companies exhibiting.

“Last year I sold no systems right off the floor,” said Tim Sullivan, director of marketing, Applications Systems Corp., Boston. “On the first day of this show I sold two systems right off the bat.” ASC was offering its show special, $1,000 off a $7,000 system and free training.

Jerry Riendeau of D.A.T.A. Inc., Elmhurst, Ill., attributed growing interest to the fact that “so many more retailers have personal computers today.” That means more are looking for the latest retail software. Those who recently purchased inventory programs, for instance, now want accessory programs. Retailers could find appraisal systems, manufacturing systems, bar code point-of-sale and on-line computer networks on display at Javits.

Chandru Nambiar, director of sales-systems for Kassoy Automated Solutions, Hicksville, N.Y., saw representatives from several major jewelry retailers on the show’s first day. Kassoy sells complete bar-code inventory systems for large retail chains.

Audi Vance, president of Vance Info Systems, San Francisco, let word leak that her firm sells an inventory control and accounting system with user prompts and menus written in Spanish and capable of handling foreign currencies. “I couldn’t believe the response,” she said. – Bruce Flickinger & Michael Thompson.

New group will fight underkarating of gold

A new coalition has been formed to help stamp out what’s been called “the disease of underkarating” in the jewelry industry. Its members are the Jewelers Vigilance Committee, Jewelers of America, the World Gold Council, the Gemological Institute of America and the Manufacturing Jewelers & Silversmiths of America.

The group’s initial thrust will be to conduct widespread sampling of gold jewelry merchandise to find if its quality is as stated and to check whether quality-marked gold has an accompanying maker’s trademark. A longer-term goal will be to create an assaying facility at GIA’s Santa Monica, Cal., headquarters. The ultimate goal is to banish mismarked goods from the business and, in the words of Frank Maier Jr., president of JVC, “restore confidence in the product …the public must know that what they buy as gold is gold.”

Maier said at an inaugural press conference – held during the Jewelers of America New York July show  – that the group is confident it can raise the funds needed to pursue its venture, to be known as the Precious Metals Quality Assurance Program. Michael Barlerin, chief executive for the World Gold Council’s U.S. operations, indicated that his organization will be willing to give financial and people aid to the venture once the action starts. “We’re willing to play catalyst in getting the program going,” he said. “The commitment is there.” He added, however, that many details have to be worked out before the action can start.

The nature of GIA’s testing facility will have to be decided, for one thing. William Boyajian, GIA president, indicated that he might approach the issue much as the Institute approached the irradiation issue – slowly and carefully, gathering information over time. GIA is now setting up a testing lab for irradiation of gemstones, with the blessing of the Nuclear Regulatory Commission. He said that if the other organizations in the group commit to action, GIA will too.

Funds for random testing of gold jewelry, both in the field and at jewelry shows, also will have to be raised. Also, a comprehensive sampling process will have to be developed. Present efforts by JVC’s monitoring committee, while dedicated and effective, are limited in scope.

Also on the agenda:

* A major educational effort to spread the word that gold items carrying a quality mark must, under federal law, carry a maker’s trademark. As part of this effort, JVC is preparing a “How to obtain a trademark” kit.

* A missionary effort to get the U.S. Customs Office to check imported gold jewelry more carefully to see that it is legal.

* Cooperation with Italian and other foreign manufacturers to encourage compliance with U.S. laws governing gold jewelry.


  • Platinum used alone or with yellow 18k gold.
  • White gold, sandblasted, set into all yellow gold designs as a new design option.
  • The White Light of all-diamond looks (with little or no metal showing).
  • Invisible settings in diamonds as well as sapphires and rubies.
  • The mix of settings in one ring, along with the mix of stone shapes.
  • Unique settings that capture the stones in channel “hugs.”
  • Continued use of square and triangular stones, especially diamonds.
  • Cabochons – particularly citrine and green tourmaline.
  • More coin jewelry than in the recent past.
  • Increased use of pink gold.
  • Short choker-length necklaces and extra-long chains (not much in between).
  • Pins galore and more rings than earlier seasons.
  • Animal themes in pins and bracelets.
  • Matte metal finishes with diamond accents and colored stone centers.
  • Fabric textures for gold – folded, wrapped, twisted and tied sheets of metal
  • Lapel pins for men and women.
  • Onyx inlays, beads and bullets.
  • Matte onyx, rose quartz and crystal beads.
  • Designer stones cut by West Germans and the new crop of Americans.
  • Representational themes like sports equipment, cars and flora and fauna in pins andcharms.
  • Charm bracelets and bracelets with dangles.
  • Convertible earrings.
  • Stack rings and bracelets.
  • Exotic colored stones and obscure agates and jaspers.
  • More, and better quality, enameling than ever before.

At the tone, it’s Bulova time

Bulova Watch Co Inc is launching its first major television advertising campaign since the 1980s. Its ‘America Still Runs On Bulova Time’ campaign features the commercials ‘Troops,’ ‘Apollo’ and ‘Radio’. The spots were directed by Benjamin Productions’ Tracy Trotter out of New York-based Burkhardt & Hillman. Bulova is known for launching the very first TV and radio advertisements.

Pioneering Watch Company Breaks Back Into Broadcasting With Spots From Burkhardt & Hillman.

The Bulova watch company, which pioneered broadcast advertising by airing the world’s first radio and TV ads, has mounted a major TV campaign – its first in over a decade.

The campaign, “America Still Runs On Bulova Time,” via New York ad agency Burkhardt & Hillman, broke last week. The agency hopes that the three spots – “Apollo,” “Troops” and “Radio” – directed by Los Angeles-based Tracy Trotter through Benjamin Productions in New York, will restore Bulova’s brand image, and reach younger consumers who think of Bulova as their grandfather’s watch.

Pioneering Media

The campaign aims to bridge the old and the new by pairing archival footage and contemporary, family-oriented scenes. According to Bulova’s marketing director, Francie Abraham, they began production by researching the company’s advertising history at the Annenberg School For Communication at the Univ. of Pennsylvania to confirm the watchmaker’s pioneering use of media. Abraham explained that in 1926, history’s first radio commercial – “At the tone it’s 8 p.m., B-U-L-O-V-A, Bulova Watch time” – crackled across the earphones and loudspeakers of KDKA radio, Pittsburgh. By 1940, the almost omnipresent time checks, “At the tone, Bulova watch time is…” were playing on all 240 commercial radio stations then operating in the U.S.

On July 1, 1941, a :20 spot for Bulova was broadcast on now-defunct WNBT-TV New York from Ebbets Field in Brooklyn at the start of a Dodgers-Phillies game – the first-ever TV commercial. Media buyers take note: It cost $9.00 to buy time for that commercial – $4 for air charges and $5 for station charges.

The world’s first electronic watch, Bulova’s Accutron tuning-fork timepiece, was introduced in 1960 and widely advertised on TV. And in ’69, an Accutron clock was placed on the moon by Apollo 11 astronauts, the first men to set foot on its surface.

But while the company, founded in 1875 by Joseph Bulova, has long been one of the most recognized brand names in the world, the 1970s saw it swamped by competition from Japanese quartz-watch makers. After faltering for several years, the company changed hands and was bought by Loews Corporation in 1979.

Abraham noted that the company has since stabilized its retail presence and re-designed its line, and is hoping the new spots will resurrect some of the brand’s broadcasting luster. “We’ve been gaining market share without much advertising,” she said, “so now seemed like the perfect time to follow through with ads that will bring consumers to the counter asking for Bulova.”

The TV campaign is linked to Bulova’s print campaign from Kirschner & Carnoff in New York, which emphasizes families having quality time together.

Campaign History

Burkhardt & Hillman creative director Ron Burkhardt said the production’s biggest challenge was finding the necessary historical stock footage and matching the right music to fit the period. Easiest to get was the film for “Apollo,” which pairs stock NASA footage with a hospital birth scene, while the voiceover says bulova watches reviews “was there for America’s first journey out of this world and today we are often there when someone new comes into it.” It opens with astronauts on the moon, footage that came free from NASA.

In “Troops,” archival shots of World War II marines jumping from an amphibious troop carrier are matched with new film showing kids jumping from a van for a soccer game as the voiceover explains Bulova was there to help time invasions on the battlefield and today it helps get soccer troops to the field on time. And “Radio” shows scenes of old radio show productions matched with the contemporary shots of a father arriving at an airport and glancing at his nixon gold watch as his son rushes up to greet him. Once again the voiceover ties Bulova’s history to modern times.

Stock footage for “Radio” and “Troops” came from stock shops The Image Bank and Grinberg in New York. New live-action footage for the spots was shot on location in New York and New Jersey.

According to Burkhardt, the spots should appeal to a wide range of ages, with Apollo getting the younger consumers, “Troops” connecting with the baby boomers, and “Radio” the seniors.

Abraham added that, “I know it’s a bad pun, but I think it’s very timely that Bulova’s moving back into TV with this campaign just now with young people’s trend toward nostalgia and the popularity of programs like the History Channel.”

A few bitter realities

The downward pressure on the Canadian dollar was predictable, if not inevitable, once U.S. President Ronald Reagan sent his proposed budget to Congress.

That budget, with its projections of monumental deficits through 1990, gave the clearest possible signals to speculators and investors around the world. Even if Congress tinkered with the budget, they knew that the American dollar and interest rates would both stay high.

In these circumstances, the Canadian dollar was going to fall. No matter what the Opposition says in Parliament – and neither party has a realistic alternative policy – the Government had to sanction a managed decline in the value of the Canadian currency with a small increase in interest rates.

Yet the current surge of the U.S. dollar alone does not explain our falling dollar. After all, the dollar began falling a number of years ago now, its fall a reflection of certain bitter realities.

Foremost among these were Canada’s poor productivity record, its own burgeoning public debt and a stubborn refusal to restructure our industry.

Put simply, successive governments have been misapplying public funds to prop up losing or declining industries. The result of these political decisions has been a systematic and huge application of scarce resources to unproductive activities. Inevitably, these mis-investments took their toll on Canada’s economic standing. But no party will say these things for fear of losing votes.

Look about Canada and see a landscape littered with industries protected by government regardless of their international competitive positions. The car industry is assisted by restraints on Japanese imports. So are the textile and footwear industries.

Megaprojects mock the bold promises of their inventors and drain away taxpayers’ money – Northeast coal in British Columbia, Expo ’86 in Vancouver, Mirabel airport, Via Rail, the Olympic Stadium, the post office sorting complex in Montreal. The list runs on.

Uncompetitive industries – business being at once government’s sharpest critic and most insistent supplicant – demand their tithe of taxpayers.

There are too many fishermen or fish processing plants on the east and west coasts. Canadair and de Havilland continue to be sinkholes for public money. We are stockpiling heavy water in Nova Scotia for Candu reactors which nobody wants to buy. We’re reinstating passenger rail routes which will resume losing vast sums of money. We put more money into a losing oil-based petrochemicals plant in Montreal. We pour money into money- losing steel mills in Nova Scotia.

Unemployment insurance has become a social welfare program. In Newfoundland, make-work projects are designed to give people just enough working weeks to qualify for unemployment insurance.

The examples of misallocating public funds could run on and on. In every case, the reasons behind the allocations are political and social. Either no alternative employment exists or governments, having lost huge sums already, don’t mind dropping a little more cash to buy political peace.

This kind of economic behavior has been the Canadian way for decades. In the 1970s, when the terms of international trade turned against us and our productivity weaknesses became more glaring, governments intensified the subsidies and protection.

In this way, governments (usually Liberal) tried to cushion social distress. The approach also brought political gains. But it delayed structural adjustments in our economy, a sustained attack on weak productivity and a more intelligent national debate on the role and capabilities of government.

Canada’s code on South Africa could take cue from U.S. model

The Canadian Government might resolve the difficulties it has with its voluntary code of conduct for Canadian companies in South Africa if it were to revamp it along the lines of the Sullivan Code in the United States.

The Sullivan Code has the dual advantage of being at arm’s length from government while at the same time being compulsory for companies that have agreed to become its signatories.

The major flaw with Ottawa’s code is that it has no mechanism for enforcement, either by law or by moral suasion. Moreover, it is inclined to be stronger on noble rhetoric – however well-meaning – than on the presentation of specific, informed recommendations to Canadian employers operating in the apartheid state.

The Canadian code, first published by the Department of External Affairs in April, 1978, has received attention recently because of reports in The Globe and Mail that the giant Canadian multinational Bata Shoe Co. is in violation of it.

Bata is by far the largest direct Canadian employer in South Africa, with 3,500 workers. The Globe articles focused on its two footwear manufacturing factories in the black bantustan of KwaZulu, about 200 kilometres from Durban.

Questions have been raised in Parliament. External Affairs Minister Joe Clark has promised to personally review the code’s provisions and mechanisms.

The code’s intent was that Canadian employers in South Africa, on their shop floors and in their communities, should strive to dismantle the structures of apartheid that keep black workers and their families on the bottom of the economic and social heap.

To this end, it said Canadian employers should report annually to Ottawa on what progress they were making in meeting the code’s goals.

Unfortunately, External Affairs never spelled out how this was to be done, although its then-minister, Don Jamieson, now Canadian High Commissioner to London, assured Canadians his department intended to follow “developments” closely.

As the problems with mechanism became more apparent (and as no Canadian company ever made the kind of annual report the Government expected), Ottawa fell silent.

The U.S. Sullivan Code has the same intent as Ottawa’s code. But rather than being the responsibility of Washington, it is solely in the hands of the man who gave it its name – black Baptist pastor Leon Sullivan – the companies which are its signatories and the consulting firm of Arthur D. Little, which monitors corporate behavior according to the code’s principles.

Its enforcement provision could not be more simple: publicity.

The names are made public of U.S. companies operating in South Africa which are not signatories or which are dropped from the signatory group.

Companies are dropped if they do not report annually.

The Little firm grades the reports – and makes its grades public – not only on the basis of what companies have done to comply with the code’s provisions but on how much improvement they have made in the course of a year (thus a company could be given a good grade for initial compliance, but the grade would be lowered if it failed to improve on its own record).

The problem with trying to enforce a government code is that it places Ottawa in the position of more or less applying Canadian law extraterritorially to South Africa. The principle is anathema to Ottawa, which consistently has opposed the extraterritorial application of U.S. law to U.S. companies operating in Canada.

Ottawa would avoid this difficulty if it turned its code over to the approximately 30 Canadian companies operating in South Africa and perhaps invited an organization such as the Toronto-based Task Force on the Churches and Corporate Reponsibility to monitor it.

The code’s language, in addition, is in need of review – given Bata’s reaction to some of its provisions.

For example, the code says employers should pay their workers at least 50 per cent above the “poverty line”. Bata says its two KwaZulu plants already operate at a loss and the profitability of its entire South African operations would be wiped out if it complied with Ottawa.

The code is silent on such a situation, making neither allowances for it nor moral judgment nor provision for examining a company’s financial health. Would Ottawa prefer Bata not to be in South Africa – presumably putting 3,500 employees out of work – rather than violate its stipulation on pay? The code says Canadian companies should provide adequate assistance to their employees and their families for such things as housing and education.

Bata says its employees live in their own houses. It believes that Ottawa had in mind merely migrant workers in hostels. It is difficult, from reading the code, to be clear on what Ottawa did mean.

However, it is instructive to examine the poverty datum line – called the Household Sufficiency Level (HSL) – which Bata and many other employers use to determine wages.

Like many things in South Africa, the HSL is applied with racial distinction: for example, the HSL’s minimum monthly housing allowance for blacks in the Durban area is about $12; for coloreds, $31. There is no HSL for whites.

Ottawa’s code talks about ending economic disparity. What “poverty line”, therefore, is it talking about – the poverty line for blacks which Bata uses and which would appear to keep blacks in an economic class of their own? Or some kind of universal poverty line which officially does not exist? Bata asks why it should contribute to education when education is provided free by the state.

State per capita expenditure on education in South Africa is about one- seventh for blacks what it is for whites (this week’s South African budget is reported to have substantially increased black education spending, but a large gap remains).

If Ottawa specifically had intended that Canadian employers should give financial assistance to bridge the gap between white and black expenditure on education, it would have been helpful to employers if its code said so.

Bata is also somewhat of an exception. Most Canadian companies involved with South Africa are either minority partners in South African concerns or are Canadian banks lending money into South Africa. The Canadian code makes no recommendations on their behavior.

Finally, under proposed Sullivan Code revisions – being worked out between the companies and Rev. Sullivan – U.S. corporate signatories will be obliged to publicly condemn apartheid and lobby the South African Government for change.

The Canadian code has never made that specific requirement.

A spirited approach

News from Britain of new styles for, almost of, men, goes unabated. In the realm of popular music, there is Morrissey, the bushy-browed lead singer of The Smiths, whose hair, cut flat and quiffed, and shirts, rumored to be ladies’ oversized, have already been emulated by English youth, and Pete Burns, of Dead or Alive, who sports long crimped locks, the slightest amount of makeup, and sometimes a patch. In the field of mere fashion, the English Menswear Designer Collections have emerged as one of the hot attractions on the international trade show circuit.

Seven of the group’s nineteen members were in New York last month, invited by the Designers’ Collective, to present their fall lines. While even within this sample representation there was great diversity of design, the English exhibitors seemed to share an honest, adventurous spirit that made them the talk of the four-day event.

Chairman of the organization, Roger Dack, with 20 years of rag trade experience under his belt, was the most senior of the designers, but by no means stodgy. Quite capable of the kind of quick talk and aggressive manner necessary to make government agencies realize the importance of the E.M.D.C.’s efforts to establish an international profile, Dack, nonetheless, spoke of a sense of humor as the highest need. Though there was nothing really ground-breaking about his Franklin collection of tailored, textured sportswear, there was, in his mixing of plaids and paisleys, an echo of the nervy, avant-garde nature of current English fashion.

It may be taken as a sign of just how advanced that Martin Cassar, who designs a division of Custom Shoes, was able to say, “I could have shown last year’s collection.” Compared to the kind of continental, low- vamp slip-ons being offered by other footwear exhibitors at the Collective, Cassar’s thick-soled boots and bootees, while of a traditional English sturdiness, appeared particularly ew.

Floral motifs, such as have been so intelligently handled by British women’s wear designers for spring, showed up in shirts by Clive Jennings and Jerry Richards for Empire Apparel as well as in the jacquard weaves employed by Charlie Allen. Su Nicholson, for the Sioux label, adhered primarily to solid shades in a collection of appliqued wool and cotton fleece. What was special about her line was the way she juxtaposed sporty and formal elements, suggesting a multi-faceted male who might at one time wear track pants, at another, a dandified bow tie, and at some other, both.

A native of Hong Kong who studied at the Chelsea College of Art and whose mother now lives in Toronto, Antony Kwok expressed the general excitement of designing men’s wear as the opportunity to break many rules and his particular interest as specializing in unusual, frequently luxurious fabric. Besides coats of soft black alpaca, jackets of soft blue llama, Kwok’s fall collection included some extraordinarily snazzy evening duds, among them, wing-tip shirts of silk jersey, metallic knit turtle- neck pullovers, and shawl-collared jackets of silk gauze in silver or turquoise.

Equally brilliant was a collection called Arkitect designed by the Moroccan-born Simon Abihissira. Hard to forget were jackets, in pinks, greens, blacks and blues, of wool in which were combined Welsh tapestry techniques and Islamic patterns and trousers of lustrous raw silk. Impossible to forget was the pink organza shirt featuring sleeve plackets snaking from cuff to elbow. The Arkitect fall line, as well as printed shirts from Empire Apparel, is to be distributed in Canada by Power Clothes Works, a Toronto agency that deserves credit for doing so.

Canada, Taiwan strive to establish a balance in import-export trade

Canada’s trade with Taiwan is likely to grow again this year, but despite efforts on both sides of the Pacific the balance in Taiwan’s favor continues to expand.

The growing gap is of considerable concern in Taiwan, says Lorne Seitz, senior vice-president of the Canadian Chamber of Commerce.

Canadian exports to Taiwan – primarily paper products, copper, coal and grain – rose 15.8 per cent in 1984 to $400-million from the level of the previous year. But in the same period, imports from Taiwan – mainly footwear, textiles and consumer electronics – jumped 32.2 per cent to $1.22-billion.

This year, exports probably will approach $500-million, but imports are likely to climb even more, to between $1.4-billion and $1.5-billion.

A Canadian trade delegation, including Mr. Seitz, met Taiwanese officials earlier this month and urged them to make efforts to narrow the trade differential.

The gap in the trade balance is proportionately the same size as that between Taiwan and the United States, Taiwan’s largest export market, and the situation ”s causing no end of concern in Taiwan,” Mr. Seitz said.

The Canadians suggested Taiwan could increase its imports of Canadian coal and go to Canada to buy some metal products and all of its grain, rather than most of its grain, as is the case now.

They also suggested Taiwan could make some purchases in Canada rather than in Australia, with which Taiwan has almost balanced trade of about $700-million each way annually.

The Taiwanese are looking to diversify and to decrease their reliance on imports from Japan, which currently has a $3-billion trade surplus with Taiwan.

In hopes of boosting sales of Canadian goods, the chamber of commerce is preparing to establish a trade office in Taiwan, perhaps later this year.

Financing is the stumbling block. With no diplomatic relations between the two countries, the Canadian Government is prevented from providing the $500,000 to $600,000 needed to set up such an office and a support system in Canada. “The situation is kind of ludicrous,” said Ted Chih-Fan I, president of Investec (Taiwan) Ltd., a Taiwanese management consulting firm. “Purchases from Canada are very much agreeable to Taiwan, and the lack of political relations makes that more difficult.” Victor Chen, director of Far East Trade Service Inc. in Vancouver, says Canadians must maintain personal contacts if they hope to do business in Taiwan. Frequent follow-up visits are essential, he said.

U.S. and West German telecommunications companies, for example, keep a close watch on projects being developed through official agents in Taiwan.

A Canadian office could also help Taiwanese business people who want to come to Canada. A frequent complaint is the lack of a Canadian visa office in Taiwan. That forces potential travellers to apply for visas in Hong Kong, where the nearest Canadian post is located. Similarly, Canadians must apply for visas through Taiwanese offices in the United States.

Canada should also consider giving multiple visas, good for four or five years, as the U.S. Government does, Mr. Chen said. These make it easy for business people to make frequent trips.

Taiwan relies heavily on foreign trade. Exports comprise about half of the country’s gross national product.

Strong export demand has been the engine of Taiwan’s economic recovery following two years of slow growth in 1981-82, says a report published by the international banking department of the Royal Bank of Canada. ”he impressive export-led recovery is now being consolidated by an increase in momentum in consumption and private investment.” And with the economic recovery boosting tax receipts, the Government increased its spending plans by 11 per cent in 1984-85.

The Government is also committed to industrial restructuring, from labor-intensive to technology- intensive processes, and it is encouraging diversification of exports, which are mostly consumer- related goods.

Opportunities exist for Canadians to increase sales, particularly as Taiwan needs technology and equipment for planned nuclear and telecommunications developments.

As well, the Government of Taiwan recently decided to reduce import tariffs over the next three to five years.

Canada and Taiwan do not afford each other most favored nation status in trade, but ”hese things can be negotiated,” Mr. Chen said.

Mr. Chen’s company, which has offices in Toronto and Montreal as well as Vancouver, offers information and consultation services free to encourage trade between the two countries. The office is financed through levies paid by the Taiwanese Government, unions and businesses.

Italian shoes pump up trade surplus

Canadian shoe quotas may have cost Italian manufacturers $70-million worth of business in the past few years, Italy’s ambassador to Canada says.

Francesco Fulci cited the quotas as one of the major sticking points in Italian-Canadian trade relations, along with provincial wine-pricing policies and defence-related trade.

Footwear is Italy’s main export item to Canada – with more than six million pairs worth $120- million shipped in 1984. Italy and other exporters of higher-quality shoes have long said they do not compete for the same market as Canadian manufacturers. The quotas do not apply to the highest- priced fashion boots and shoes, a market dominated by Italy.

But although the exempt items account for a major share of the dollar volume, they make up a relatively small part of Italian production, which has led to the friction over the quotas. “The measure was supposed to be temporary,” Mr. Fulci said in a recent interview. “When it is in force for so long, it is not a temporary measure any more.” The federal Government first imposed shoe quotas in 1977 and has extended them several times. Restrictions on leather footwear were lifted in late 1981 but reapplied in July, 1982. The quotas are scheduled to expire at the end of November. “I feel that to enhance our bilateral trade we should . . . render both our markets even more immune to the disease of protectionism,” Mr. Fulci said.

Canada had a deficit in its trade with Italy last year of $538-million, more than double the 1983 level, and a far cry from the record 1980 surplus of $378-million.

But Mr. Fulci played down the numbers. “What counts is not who is in the black or the red in a particular year, but to increase the volume of trade.” After falling to a low of $549-million in 1983 from $988-million in 1980, Canadian sales last year were $578-million, a 5 per cent increase from a year earlier. “We are climbing out of 1983’s trough, but it will be some time before we get back to how we were doing in 1980,” said John Pearce, commercial counsellor at the Canadian embassy in Rome.

Mr. Pearce cited the decline in pulp and lumber exports as major reasons for the drop, which saw Canada’s share of total Italian imports fall to 0.75 per cent in 1983 from 1.3 per cent in 1980. The value of pulp exports last year was $177-million, up from $116-million in 1983 but still down from $230-million in 1980. Lumber exports fell to $14-million from $15-million in 1983 and $59-million in 1980.

Two factors are at the root of this downturn – cost and the economic situation in Italy. Between 1980 and 1983, the dollar appreciated from an average exchange rate of 725 lire to 1,222 lire, while a 16 per cent devaluation of the Swedish krona made the products of Canada’s biggest European competitor more attractive. And the Scandinavians have duty-free access to European Community countries.

Italy’s economy was late in picking up, and its recovery is not expected to approach U.S. levels. “With only a weak recovery we cannot expect Canadian exports of raw and fabricated materials to jump back to former levels,” Mr. Pearce said.

Mr. Fulci said both sides should work to diversify trade in non- traditional areas such as high technology.

He said Italy is buying flight simulators, electronic equipment and engines from Canada, but Canada is not reciprocating.

Federal officials agreed that Italian defence contractors have not won significant Canadian business in competitive bidding. But they said the ambassador has no basis for his complaints. “They are welcome to bid. It’s a matter of being competitive,” one official said.

Meanwhile, Canadian officials expect the European Community to bring the wine-pricing issue to the General Agreement on Tariffs and Trade.

In August, 1983, Ontario adopted a floor price system that cut severely into sales of Italian wines that had been priced below the minimum level set by the province.

As a result, Italian producers lost about one- third of the volume of their Ontario market in one year, Mr. Fulci said.

Canadian consumers bought $24-million worth of Italian table wine in 1984, compared with $22- million in 1983 and $20-million in 1980. Italian cheese exports were $7-million in 1984, compared with $9-million in 1983 and $7-million in 1980. Still, Canada enjoys a surplus in its food trade despite declining cereal sales, which have been hit by European Community protectionism.

Durum wheat, used for spaghetti and vermicelli, is Canada’s second- largest lira earner. Sales in the 1983-84 crop year (which ended July 31) were worth about $100-million, up from $96- million a year earlier, but below the $134-million reached in 1980. Italy’s good harvest in 1984 could have an adverse effect on exports this year.

Canadian exports of fish products are worth about $15-million annually. The Mediterranean is overfished, prices tend to be high and the quality uneven, leading to significant reliance on imports.

Smoked salmon has found an Italian market; and prospects are bright for clams because of problems finding uncontaminated shellfish in local waters, which are high in bacteria.

Both sides are exploring industrial joint ventures as a means of increasing trade flows. Small and medium-sized Canadian companies could benefit, for example, from Italian expertise in such areas as machine tools and industrial design, officials said.

Joint ventures in third countries are another option. Mr. Fulci mentioned Italian participation in the Argentine and Romanian nuclear projects, and noted that similar opportunities exist in Egypt, Turkey and Indonesia.