Profile: 47th Street

The store door bangs open. A middle-aged man dressed in black comes out hurriedly toward an acquaintance he’s spotted on the street, obviously needing to share his overload of frustration. Nervously running his fingers through his sparse hair, he cries, “Business is dry. It’s dry, it’s completely dry.”
   The other man tries to calm him, but the dark-suited diamantaire with the despairing face and doomsayer message is not to be swayed. “I just want to sell my goods, put them into a house for two families and get some cash.”
   His interlocutor thinks he’s found a weak point in this plan: “Tenants bring their own sort of problems.”
   “Maybe,” says the diamantaire, “but at least the property goes up $100,000 a year.”
   On that note, he returns to his store, still agitated, letting the door slam behind him, leaving his befuddled friend standing on 47th Street. How many times have they had this exchange in recent years? How many dealers in the Diamond District — this area between Fifth Avenue and Sixth Avenue known as the center of the New York-based industry — share the feeling that real estate is a far more secure occupation than dealing with the most precious stone in the world?

‘It’s lost its soul’
   The threats the US industry is facing are well-known: competition from abroad, tighter margins, the increasing and unstoppable reliance on the internet for diamond purchases. But even deeper than the economic pressures most have to face is the feeling of disenchantment, the painful realization that the heydays of 47th Street are over.
   What’s particularly poignant is the disillusionment is proportional to the high regard in which the district was once held. “This street is a complete embarrassment. In the late 1970s, it was never a beautiful street, but it was a street full of promise, full of excitement. You felt part of something big, part of the industry, and you were never accosted. The excitement is gone,” says Donald A. Palmieri, president at Gem Certification & Assurance Lab (GCAL).
   Palmieri, who has been coming to New York from out of town since the 1970s and has had an office in the city since 1999, feels that “the street has lost its soul, its charm and its integrity.” A walk down 47th Street confirms his bleak description: “Trash, broken furniture and hawkers litter the sidewalks, when they should be open and clean. Crowds of people block the walkways, and there is no sense of decorum,” he says.

The way we were
   The district never rivaled its glamorous, upscale neighbor, the legendary Fifth Avenue, but it was the by-word for quality goods made in the US. This image, too, has taken a hit, long-standing residents note.
   Fred Knobloch, CEO at Aron Knobloch Inc – Knobloch Diamonds, and vice president at the Diamond Manufacturers and Importers Association of America (DMIA), arrived in the US from Antwerp with his family in 1950, when he was 11 years old. He grew up in the early days of 47th Street, when those working in the trade moved there from Canal Street following an influx of refugees from Europe. Most of these new arrivals were Holocaust survivors, coming to the US with nothing but their skills as cutters and polishers.
   “The US in those days was where the finest goods in the world could be found.... My father supplied Tiffany, Harry Winston and other manufacturers that made high-quality jewelry,” the second-generation diamantaire recalls. He laments the declining production standards of the mainstream goods on offer. “It’s a sad thing to witness, but today, the US is a market for junk. Diamonds that are used for some refined products at chain stores would be better kept for industrial use.”

RIP ‘mazl un brokhe’
   Although the street is an apparent bustle of activity during the day, industry insiders all concur that business is not what it used to be. They point to the competitive international marketplace as a reason for the challenges American dealers are facing.
   “The diamond business has become a very difficult business run over by foreign vendors from Antwerp, Israel and India,” says Knobloch. “They don’t have the same expenses that we have. We have to pay tax and high rents. They can come here with satchels of goods and offer lower prices than us, who have to break even. In the globalist world, many go out of business.”
   Recalling better days, he recounts that “in the 1960s and 1970s, 47th Street was very similar to Antwerp. ‘Mazal’ was a bond stronger than a written contract. The whole society in the US has disintegrated and has become much more legally oriented. Before, there was no signed memo, no contract, but today a word is not as strong.”
   David Ebrani, president of Color Diamond Trading Co., agrees, having experienced many changes firsthand over the past 25 years.
   “When I began, a majority of opportunities came to me through brokers, and the owners were anonymous. A broker would work for a commission of 2%, and a handshake would seal the deal. Often terms were 30, 60, 90 days for payment, which gave you some flexibility to finance a purchase. There was also a greater trust factor that your word was your bond.”
   Today, Ebrani does most of his business directly with the rough buyer and manufacturer. “Because of all these adjustments, I see that the industry on 47th Street has shrunk dramatically and is not as robust as when I began my business.”

Better standards
   However, in the upper echelons of the cutting world, the new era has brought higher standards. Harvey Lieberman, a diamond cutter specializing in colored diamonds, has been in the industry for 45 years, learning his trade from his father. At the beginning of his career, the district was home to 2,000 or 3,000 diamond cutters, of whom Lieberman estimates hardly a tenth are still active. But advances such as stricter certification levels from the Gemological Institute of America (GIA) have contributed to the quality of their jewelry-making.
   “The advent of the GIA has played such a big part in the way we work. The standards to make the stone are higher,” he says. “The portion of people on 47th Street today is much smaller than what it was, but the expertise here is and has to be of a greater degree than it was. People who stayed [in business] know more and are able to do more.”

A fresh face for the neighborhood
   Meanwhile, the Diamond Dealers Club (DDC) is hoping to reverse the district’s disintegration through a large-scale revitalization project.
   In early January 2018, the DDC will welcome its members to the new state-of-the-art facility and trading floor it is opening in the International Gem Tower at 50 West 47th Street. Its president, Reuven Kaufman, sees the move as an opportunity for New York to regain its place as the epicenter of the diamond world.
   “With the overheads, and [with] profit margins being so small, many companies have to close their offices. It pains me to see that,” he says. “But we are now offering them a tremendous deal. They can sit in the bourse the whole day, make use of the full office and full security offered to the members, as well as private rooms.”
   The design of the new club is spacious, modern and inviting, with its floor-to-ceiling windows overlooking Midtown. Kaufman is convinced that the premises “will give an aura of vitality to the bourse and bring back its luster to New York.” The new venue, in Kaufman’s vision, will be a good place to showcase outstanding diamonds such as Alrosa’s Dynasty collection, which went on display at the club in November. “We want to reinvent the idea that New York is the main supply to the US by developing relationships with manufacturers and bringing more retailers in.”
   Lieberman, too, believes New York can keep its standing — especially now, as many local cutters retain a natural creativity that he suggests others in the industry have lost in the digital era.
   “You can’t put everything in a computer for it to tell you what to do,” he says. “New York has an advantage over the rest of the world. Important stones come to us because we know how to think out of the box.”

Let’s make a deal!

Shopping on 47th Street requires some serious patience and dedication. Hawkers shout at harried passers-by, whether they are office workers from the adjacent streets, couples searching for the perfectly priced engagement ring, or mere window shoppers. “Are you looking for something?” the vendors ask when they have some semblance of bonhomie, and “What is it that you want?” when they opt for a more aggressive sales pitch.
   The merchandise on display can be overwhelming, with many stores stocking similar-looking goods. Still, there are many honest dealers on the street who take pride in their trade and try to survive in an age when “everyone knows everything,” as one of the store assistants at a family-run business puts it. The majority of the customers come after extensive online research, she explains, adding, “Everyone wants a certificate from the Gemological Institute of America (GIA) or American Gem Society (AGS); they don’t want the European Gemological Laboratory (EGL).”
   As she says this, a woman in her 50s from New Jersey enters the store and asks to see a diamond tennis bracelet that caught her eye in the window. Her first question on being handed the jewelry is whether the diamonds are synthetic. “Oh, I can assure you they are not,” the store owner vehemently tells her. “Synthetics are destroying our business, because other vendors use them and make the prices cheaper, and then customers come to me to ask to match the price, but I can’t because we only use natural diamonds.”
   Satisfied with this explanation, the customer says she came to the store on a friend’s recommendation. The sale will certainly be closed today.
   In another store, a newly engaged young couple from Brooklyn have been looking at a refined diamond ring in the lower- to mid-price range for over an hour, asking all the questions they can think of, having clearly done their research on the 4Cs. Looking barely out of their teens, the two of them say almost in unison, “Everyone knows you have to come to 47th Street first.” But now that they know what they can get for their budget in the Diamond District, adds the savvy young woman, they’ll go back to an acquaintance of her parents’ in Brooklyn to see what they can negotiate — not ruling out the possibility of coming back to Manhattan to finalize their purchase, since they have been positively impressed by the store assistant.
   On the street, they cross paths with a woman in her early 60s walking with a cane, who’s stopping by a few windows. She’s clearly known to some of the street residents, who greet her by name. She comes here almost every day, she says, especially to look at estate jewelry stores. “I like to look at beautiful things,” she beams.
   For all the fake certificates, synthetic diamonds and unpleasant hawkers, 47th Street retains some of its appeal among both customers and onlookers. And it’s the quality and integrity of the goods that keep them coming back.

Photo: Alamy Stock Photo

Article from the Rapaport Magazine - December 2017. To subscribe click here.