Laurence Graff, the Diamond King
The Diamond King, as Laurence Graff is sometimes called, has a regal air. Sporting an impeccably cut navy suit and tie (made by his tailor in London, rather than his one in Milan) with matching silk handkerchief tucked into his jacket pocket, he is the picture of restrained elegance.
It is an image reinforced by his surroundings – the Mayfair headquarters of Graff Diamonds, the company he founded in the 1960s, are high-ceilinged and cream-walled, the perfect backdrop for his modern art collection, which includes Damien Hirst, Andy Warhol and Roy Lichtenstein. Disappointingly, the man also known as “The King of Bling”, who has made billions over the years selling jewellery and gemstones and has five homes in different countries (his main residence is Gstaad, Switzerland), is not done up like a Christmas tree. In fact, the only gem in evidence is a tiny diamond on his watch.
Yet, beneath the refined surface are traces of the tough working-class kid he used to be. “Your personality in life doesn’t really change,” he grins.
On occasion, he insists, his uppermiddle-class voice slips to reveal the accent of his youth. “I was a cockney,” he says.
Born a year before the second world war in the East End of London to Jewish immigrants from eastern Europe who ran a tobacconist, he says he “became street-smart very early”. It sparked an interest in trade: “I saw people [in the local market] buying and selling . . . counting cash. I saw as a young boy that people could make something out of nothing.”
The environment made him aware of the importance of diamonds. “Jews have always had to move. Then it was a bad time, people were paranoid. What you do if you’re paranoid is put your money somewhere safe: diamonds.” He describes himself now as “proud to be a Jew” but not religious.
As a child, he could not have dreamt how things would turn out. (“When you have nothing, the first £10 is a fortune. You can’t imagine £1bn.”) Now his personal fortune is, according to the 2009 Sunday Times Rich List, estimated to be £1.2bn ($1.9bn, €1.4bn); Graff Diamonds has more than 30 retail outlets worldwide, selling high-end jewellery and gems to the likes of Oprah Winfrey and the Beckhams. Unlike other high-end jewellers, such as Cartier, Graff Diamonds is involved at every level of the diamond business from mining (through shares in Gem Diamonds, an African miner) to cutting and polishing in offices in Antwerp, Johannesburg and New York (through his controlling stake in the South African Diamond Corporation). In 2008, the group’s global turnover was $1bn.
It is hard to imagine what the young Mr Graff would have made of his trip this week to Washington for the unveiling of the Wittelsbach-Graff diamond at the Smithsonian Institution. He shelled out $24.3m (almost $10m more than the expected price and the most ever paid for a diamond at auction) for the gem at Christie’s in London in 2008.
Originally from India, the diamond was taken to Europe in the 17th century – in 1664, King Philip IV of Spain gave it to the Infanta Margarita Teresa to mark her engagement to Leopold I of Austria before passing in the 18th century to the Wittelsbachs, members of Bavaria’s ruling house.
Mr Graff says the purchase was a savvy investment. Critics have, however, doubted the wisdom of his next step – repolishing it to eliminate the chips and improve the clarity but reducing the stone from 35.52 carats to 31. The move has been likened by purists to making the Mona Lisa prettier. The decision prompted a rare moment of self-doubt – approximately 10 minutes he says, admitting: “It was a risk.” But he beams with pride contemplating the outcome: “It’s a ball of fire; it’s beautiful.”
His drive to “hunt” for top-end diamonds and open new stores derives, he says, from his “big ego”. He is unabashed. “Those who don’t have an ego couldn’t do what I’m doing. I am the best; I will remain the best. OK. That’s ego, but it drives me.”
Even as a teenager he had a swagger. After leaving school at 14, he became an apprentice at a jeweller in Hatton Garden, London’s historic jewellery trade centre, before being fired three months later. He then got another job repairing rings and making small pieces of jewellery.
At the age of 17, he decided to go it alone when the business he was working for collapsed. He took his designs on the road, knocking on the doors of jewellers all over England. “I knew I could sell, I knew I could do anything, I knew I could fly,” he grins. In 1962, at the age of 24, he opened Hatton Garden’s first retail shop.
After years of travelling, selling his wares overseas, in 1973 he decided to establish a store in Knightsbridge. “The oil explosion in the 1970s meant all of these sheikhs were coming over with more money than they’d ever had. We didn’t have time to count [their cash] and so had to weigh it,” he says. Then, he recalls, the oil boom dried up. Was he disheartened? “As one door closed another opened . . . Brunei became a major country and the royal family became important customers,” he explains. “Money just changes hands.”
Seeing regions’ economies rise and fall has given Mr Graff perspective on the recent financial meltdown, which triggered a crisis in the diamond industry, as owners closed mines rather than sold diamonds at reduced prices. “When you are in a business like diamonds, whether you sell today or tomorrow it doesn’t matter. I don’t mind about profits from year to year.” In 2008, the most recently recorded financial year, profits from UK operations were $77m, down from $117m in 2007. He believes turnover for 2009 is down a further 20 per cent but declines to disclose earnings aside from saying, “We are in profit.”
This focus on the long-term means Mr Graff would never float his company. He tried it once in the 1970s. After a few years, he bought all the shares back and took it private again. “I couldn’t stand up at an annual general meeting and say ‘your company’. I was doing all the work,” he says.
He is confident of the outlook now diamond production has restarted and prices have increased. His eye is fixed on China, describing it as “the biggest thing for my company”. He has opened one store in Shanghai, and more are planned for Beijing.
Mr Graff’s energy shows no signs of abating – he plans to take the Graff brand beyond jewellery through his latest venture, Delaire wine estate in Stellenbosch, South Africa. On the question of his age, he is coy. “Old enough,” is all he says. (He is 71.)
Quite why the trim and youthful Mr Graff is bashful is a mystery. Perhaps his reticence is due to the inevitable next question: when will he retire? “Never, never.”
He denies his refusal to stop working is a source of frustration for his son, François, the company’s managing director and next in line to run Graff Diamonds. The operation is a family concern – Laurence’s brother Raymond runs the workshops and his nephew Elliott supervises production.
Family is clearly important. He was close to his mother who died at the age of 98 in 2008.
“My mum was a very lovely woman. To the last day she’d ask, ‘Is everything OK? You’re not doing anything wrong are you?’ ” And was he? “No. Not in business anyway.”
That leads to the rather vexed subject which has been splashed across the tabloids: the birth of his daughter five months ago, the result of an extramarital relationship. His voice softens. “I saw my daughter yesterday; I see her whenever I can. She’s supported very well. Who knows, she might become chairman of Graff Diamonds one day,” he jokes.
He remains with his wife, Anne-Marie, to whom he has been married for 47 years. While we are in difficult territory, does he not worry about the origin of some of his clients’ wealth? Imelda Marcos, wife of Ferdinand Marcos, the corrupt former president of the Philippines, was a valued Graff customer, for example.
He recalls spending an evening with her and the actor George Hamilton on the bed of her suite at the Waldorf Astoria in New York looking through her jewels. “There will always be rogues in the world,” he says. “Who am I to judge? I’m a trader.”
Crime is a subject he is all too familiar with. Last year, armed raiders stole gems worth £40m from his London New Bond Street shop in Britain’s largest jewel heist. Nine people, according to Mr Graff, are awaiting trial. “It was a huge loss financially, our insurance premiums have gone up considerably. We haven’t got the jewels back.” Typically, the raid did little to dent his confidence. His eyes light up explaining the reason for the robbery: “[Thieves] want the best.”
Born: June 1938, in the East End of London.
Education: Left school at 14.
Career: At 14, he got his first job as an apprentice (“a dogsbody”) at a Schindler’s workshop in Hatton Garden, the jewellery district in London. Three months later, he was sacked. He got another job where he learnt how to repair rings and make small pieces of jewellery.
At 17, he decided to go into business alone. At 24, he owned two small jewellery shops.
In 1974, he set up in Knightsbridge, selling to buyers from the Middle East, enriched by the oil boom. This brought him into contact with serious money for the first time.
Interests: Collecting modern art, skiing, travelling.
from the FINANCIAL TIMES