At night, in bed, Michel Einhorn reads about computer code. “My wife doesn’t like it,” he reports, “but the internet is changing, and I have to learn about [the latest programming code] XML.”
Einhorn has always been nuts about computers. When he was growing up, in Belgium, he took a correspondence course in robotics. Lucky enough to receive BBC transmissions, he gleaned further tips from the Open University. After he moved to London – where he works as a diamond dealer, in Hatton Garden – and everybody started talking about the internet, Einhorn asked himself: “How difficult can that be? It must be easier than building a robot.” So he took himself to PC World, bought some books, and set up a web site.
On cooldiamonds.com, you can choose from a variety of rings, earrings, and necklaces at competitive prices. More important, you can specify the stone you want according to cut (shape), clarity (from flawless to severely blemished), colour (from white to dirty yellow) and carat (size).
“If you click on ‘More expensive’, it goes up first by size,” he explains, demonstrating the site in his pokey suite of offices. “So then maybe it’s a bit too expensive, so you change the clarity, and after that the colour.” With 72,000 available permutations, this gives customers a choice no ordinary shop could possibly match. If Einhorn doesn’t have a particular stone, he calls on his father, one of the few diamond dealers, world-wide, allowed to purchase rough diamonds directly from De Beers. And if his father doesn’t have it, Michel can ask any of 300 family members in the trade. “Yesterday we sold a £4,000 diamond to someone from Nottingham. We posted it to him. He hasn’t even seen it yet.” (All stones Einhorn sells are certificated, and can be returned within ten days.)
Even with internet sales increasing, Einhorn’s business remains mostly offline. He trades with fellow dealers, local jewellers, and shops across the country, including the West End. To explain how this works, he calls his broker – and within moments there’s a knock on the door from Moshe Meyer. “Moshe, tell the man from the Financial Times what you do for me.”
Meyer, who is Swiss and does not speak perfect English, wears a crumpled blue suit, with matching fedora. As he speaks, he plays with the rim of the hat, and strokes his beard. “Mr Einhorn, you understand, he can’t go to a customer and say ‘Buy from me’ – because that looks desperate. But with me [selling on his behalf], they [buyers] don’t know who the owner is. I can push up the price.” Einhorn interrupts: “When Moshe goes to Bond Street I tell him, ‘Don’t mention my name!’” Why not? “People in the West End get upset,” Meyer says, “because Mr Einhorn gives good price.” In other words, he sells much the same jewellery as the Bond Street stores, but for less. (Many people in Hatton Garden make this claim. It’s usually true.)
Meyer, who earns one per cent on each sale, has no permanent office. He’s usually to be found upstairs, in the London Diamond Bourse and Club, the regulator of London’s diamond trade which also serves as a dealing room for some 800 members. Can I look round? Einhorn raises his eyebrows, and whistles. Meyer fidgets nervously. Outsiders are not allowed in. But – since this is the FT – Einhorn picks up the phone and politely requests permission from the board. They’ll have to think about it. Within a few minutes, the phone rings: permission is granted. (But our photographer, deemed a threat to security, is excluded.) So we step outside Einhorn’s suite and make our way along the dingy corridors, garlanded with closed-circuit cameras, to the bourse.
After all that hype, I’m expecting to find the bourse truly extraordinary, and the atmosphere frenetic. In fact, it’s ordinary – if anything, shabby – and the men trundling across the dirty carpet – many of them dressed, like Meyer, in the traditional outfit of ultra-orthodox Jews – look half-asleep. In one corner, near the budget canteen, elderly men play cards. (“It’s summer,” says Einhorn, “so business is flat.”)
Introducing me to man called Menachem – who has not shaved, recently, and for security reasons prefers not to give his surname – Einhorn explains how deals are closed. “When you say Mazal he says, “that’s when you make an agreement. There is no signature or contract. Just Mazal That is one reason why we make deals with family – because who else can you trust?”
The diamond trade has long been dominated by Jews, not least because Jews, for centuries, were excluded from other trades and professions. “Also, when you’re persecuted, you need something you can carry,” one man tells me. “You can’t carry a house in your pocket.” But not every member of the bourse is Jewish. One who is not says: “I do use the word Mazal – if I’m dealing with Jewish suppliers – but there’s nothing lost if you don’t use it. A nod will do. Or a telephone call. Or you could say, ‘By the way, that is sold.’” (If there should happen to be a dispute between members of the bourse, the matter goes to binding arbitration. “If you decide not to abide by it,” says Menachem sternly, “you will be expelled.”)
In addition to the deals transacted at the bourse, a good number take place in the privacy of dealers’ offices. Some dealers reach agreements in the street. Around lunchtime, while shoppers gaze into windows, two men conduct earnest discussion in the front seats of a blue Jag – finishing with a hand-to-hand exchange of goods for cash. Nearby, four others – all Hasidic Jews – close a deal while standing round a parked Volvo.
And, increasingly, deals are transacted with members of the public. On both sides of the street, and spilling over into side-roads, such as Greville Street, offices and workshops have converted to retail. The secretive diamond and jewellery business is finally opening itself up to outsiders – but the process is gradual. Despite the lower prices, punters often feel less confident dealing with Hatton Garden than with the illustrious jewellers of the West End. Equally, members of the Hatton Garden community retain considerable suspicion of outsiders. Stuart Disdale, for instance, is extremely wary. “I’ve got five shops [on Hatton Garden],” Disdale admits, in an extremely brief telephone conversation, punctuated every 15 seconds by a call on his other line. How – and why – did he build up such a collection? “I just see a shop for sale, and decide if I want to buy it.” Having disclosed these trade secrets, Disdale inexpertly muffles the receiver on his phone and asks somebody: “I’ve got a guy says he’s from the Financial Times . How can I get rid of him without him writing something rude about me?” (The solution, it seems, is to claim pressing business on the other phone.)
Others are not suspicious of the press – but sometimes feel nervous about dealing with members of the public, because some of these may turn out to be villains. In many premises, for this reason, the front door can be opened only by somebody on the inside. Take A R Ullman, towards the southern end of the street, which deals in antique jewellery, medals, clocks and watches, pipes and cigarette boxes, magnifying glasses and lorgnettes, and silverware including – but not restricted to – cutlery, mesh handbags and tea pots. The current owner is Joseph Ullman, who grew up wearing the hated yellow star in Hungary, where his grandfather owned a similar business (the shop in Hatton Garden was founded by his father, in the 50s). If Ullman doesn’t like the look of callers, he shouts through the window: “Twenty minutes! Come back in 20 minutes!” Few bother to return, and even if they do he can always send them away again.
Having explained this, Ullman briefly leaves me in the hands of his colleague, Jeffrey Pinkus, and steps outside to make a local delivery. Is he worried about carrying valuables? No, says Pinkus. “There are a lot of plain clothes police. You try running down the road and see how far you get.”
The next instant, one of Ullman’s business contacts, a repairer of enamelled goods, steps through the door and demonstrates that racial slurs are no more attractive when perpetrated in Yiddish than in other languages: “He’s left the door open! Wide open! In all the years I’ve been here, I’ve never seen that. You want to be careful,” he adds, making comedy machine-gun motions. “You could have a couple of Schvart”ers [black people] in here.”
The good news for prospective visitors to Hatton Garden who happen to be black is that this pestilent enameller is an outsider, just visiting Hatton Garden from outside London. There’s no reason to suppose that the amiable Ullman and Pinkus would not welcome black customers. And anyway, round the corner, in Greville Street, is Chic II, a jewellery shop that is run by a black man. Jason Clarke declines to discuss inter-racial dynamics in the Hatton Garden area – “I’d sound as if I had a chip on my shoulder” – but happily reveals that his shop’s biggest sellers include chains and bracelets. In addition to the sizeable black customer base, he adds, Chic II caters for a lot of Travellers.
Martyn Pummell, next-door to Chic II, keeps his front-door open to all comers. Pummell has been in Hatton Garden since 1955, when there were only four shops in the diamond district. He vividly recalls the crazy days of Purchase Tax, which did not apply to second-hand goods. “There was money to be made from writing out an invoice [to make new properties seem second-hand]. You got 10 per cent for that. There were people standing on the corner, over there, just writing out invoices all day.”
But Pummell is not some old codger, stuck in the past. He, too, sell diamonds from a web site, approveddiamonds.com, with back-office operations located in his fantastically untidy basement, amid diamond scales, an ultrasonic cleaner and a furiously loud polishing machine. “We had one order today for a £3,500 diamond bracelet,” Pummell boasts. “Last week, we had a guy – some kind of businessman – came in at lunchtime for an engagement ring to take to New York that evening. He selected the diamond on the internet and chose a ring from the window. It was a hurry, but we managed it.”
To accommodate customers like that, Pummell retains a couple of working jewellers on the premises. There are two of them, working at the back of the room amid saws, blow torches, and a fuming pot of acid (known as “pickle”) that somehow doesn’t irritate their throats as it does mine. The principal jeweller, Sam Sherry, is Australian. The trainee is still more exotic – she’s female. “There were 50 per cent women in college,” reports Lucy Payne, adding with some puzzlement, “but there aren’t many women here.” She’s right. As well as being largely – but not exclusively – Jewish, Hatton Garden is emphatically male. One woman answers phones in the bourse, another assesses gems at the Hatton Garden Pawnbroker. Here and there, you find female shop assistants. But there are no women in any of the workshops I visit. None, for instance, in the basement occupied by silversmiths Gareth Harris and Dennis Smith.
“Actually,” says Harris, “we’re gold smiths, even if 80 per cent of the time we work in silver.” What’s the difference? “Gold is harder to work, in some ways. It has a higher tensile strength, so there’s more physical effort involved. But it’s very forgiving. You can beat it and beat it, and it won’t crack. Silver, if you pushed it, might split… There’s something unique about how gold spreads when you hit it with a hammer. And it behaves in a different way, under heat. Silver’s an exceptionally fine conductor of heat: with gold, you can heat a bar at one end and still hold the other.”
So why have teapots traditionally been made of silver, with cripplingly hot handles? “Well, you do get a decent cup of tea from metal. We find that people who bring teapots for repair are usually desperate to get them back again.”
Harris is currently working on a silver decanter – a special request – in the shape of a mesolithic mound near Marlborough. Producing this involved a great deal of original thought. “It is to scale,” he says, “but we had to use artistic licence, because it has to contain a bottle of port, and you have to be able to drink from it.” Over three months, he’s spent about two or three weeks on it. If he takes too long, he makes a loss. “People come to us with an idea, and until we have fully designed the object it’s hard to work out the cost. We haven’t lost, on this one. We’re in our 40s, and finally getting this right.
“If you run your own business, you are dealing with vast amounts of money because the raw material is so expensive.” If you work in gold, he says, you save the dust. “There used to be a tailor in Hatton Garden who would give jewellers a free pair of trousers in return for the trousers they wore at work – which he then burned to melt the gold dust. We used to melt our floor sweepings, once a year, to pay the insurance.”
Back in Einhorn’s office, a customer has turned up, to collect an engagement ring he purchased on the web site. He’s travelled from Kent, to collect a solitaire, weighing 0.73 carat, with a very white stone (graded G), and very small blemishes (VVS2). The price, £1,995, is extremely reasonable, which should make the prospect of proposing marriage, tomorrow, even more thrilling than otherwise – but for some reason the customer looks terribly depressed. It’s as if he’s somehow foreseen that when Einhorn opens the wooden box containing his ring it will turn out to have been mounted incorrectly. Because that’s exactly what happens. “Ah,” says the doomy customer as Einhorn presents his ring with a flourish. “I was expecting a white -gold ring.”
Oh dear. “This will be corrected for you very quickly,” Einhorn promises, already picking up the telephone and dialling the number of a jeweller across the road. “Brian, it’s Michel. I have the Financial Times here and a customer who expected a ring in white gold but we have given him yellow gold. Can I bring it to you, with the mounts, and you do it, sort of, straight away?”
Receiving an affirmative answer, Einhorn replaces the ring in its box and puts the box in his pocket. Then he takes me back down the corridor, down the stairs and across the street – all the while explaining that the mix-up resulted from this particular item being unusual, a special offer. Stepping through an open door, we climb the bare wooden stairs, passing a series of doors with locks, bolts and security peepholes. At the top, a door opens to reveal three jewellers working hard in conditions of uncommon squalor.
Brian Jocelyn, who has worked in Hatton Garden for 30 years, is happy to reset the diamond. But Einhorn, in his hurry, has forgotten to bring the white-gold mount and Jocelyn has nothing similar to hand. Disaster! Using his mobile phone, Einhorn phones the office and speaks to his Kentish customer. “Would you mind having a platinum ring instead?” he cajoles. “That would normally be £150 extra, but we will not charge you for your inconvenience – it’s like a free upgrade.” Naturally, the man assents, so Jocelyn starts bashing the new platinum mount to make it the right size. Having done that, he picks with tweezers at four diamonds lying before him. Even in the sickly yellow light of a fluorescent tube, hanging 18 inches above his worktop, each gem twinkles alluringly. “Now,” he wonders, “which one was it?”
De Beers, on its web site, suggests men should spend one month’s salary on a diamond engagement ring. the business phoned several jewellers, anonymously, to compare the prices for a round-cut, flawless stone with the whitest colour available (grade D), set on a plain band of 18 carat yellow gold. Hatton Garden proved much cheaper than elsewhere.
A saleswoman at Aspreys revealed that a one-carat stone of that quality would cost “nearer £20,000” than the £10,000 budget the business initially proposed. “Well, actually in the twenties,” she adds, “though I can’t say precisely how much.” At Boodle & Dunthorne, £10,700 would buy a ring with 0.88 carat stone, though strong hints suggested that £10,000 might suffice. To reach the one-carat threshold the price rose sharply, to £18,500. In Edinburgh, Mappin & Webb quotes ”£16,000 or above”.
And Hatton Garden? On Michel Einhorn’s www.cooldiamonds.com, an engagement ring with certificated one-carat stone costs precisely £11,902. Martyn Pummell, of Finecraft Workshop Ltd and the web site www.approveddiamonds.com , quoted lowest of all, at £10,110.
But West End shops remain sniffy about Hatton Garden. “It might cost less, but they don’t particularly work on the design and [they] put it in any old setting. And a lot of people there [in Hatton Garden] come and go… a bit fly-by-night. We are not planning to go anywhere.”
© FT Magazine
Some time after writing this story, believe it or not, I started to provide sales training myself, for nice people who don't like that kind of thing