RAPAPORT... As the United States wholesale market rounds the last corner and hits the final stretch before the holiday season, the pervasive attitude among industry players is one of cautious optimism and hope. For some, the buildup in business has been noticeable, while for others, less so.
“Selling is shaping up nicely and steadily,” commented Serge Fischler of Fischler Diamonds in New York City. “While the U.S. market has been a most difficult market for the past few months — the liquidity problem is a serious one — business has picked up and it might actually be slightly better than last year at this time.”
Not so for Sam Nazarian of A & M Diamond and Jewelry Inc. in Los Angeles, California. “The activity that we want is not there,” he said. “There’s not that much activity to speak of, and we are down probably 20 to 25 percent from last year. I wish I knew what the problem was. There is just no good merchandise in the market.”
Still, Nazarian believes that it will all work out in the end. “The last moments of the season will be booming for everyone, especially when all of the last-minute shoppers come out,” he said. “But, it is still better to be consistently busy than just counting on two or three weeks.”
David Abraham of David Abraham & Co. Ltd. in New York City also believes that there isn’t as much action as in previous seasons, but he noted that what has been moving has been selling with less fuss. “Generally speaking, there is less activity than in years past; however, better stones are selling quicker and easier than they used to. People are buying and selling with less resistance, possibly because they don’t want to waste time. However, the market can be a hazardous environment. You have to be careful about who you do business with, because not everyone is paying on time.”
Meanwhile, Sam Frank of Leo Frank & Sons, Inc. in Troy, Michigan, said his firm has been working much harder to counteract a struggling Midwestern economy, which has been hit hard by auto- and manufacturing-related downturns, especially in Michigan and Ohio. “We are tracking about even to slightly above last year, but right now you have to work 50 percent harder to do the same business as last year,” he lamented. “You really have to put in the time, because every customer is ordering a bit less. So, to counter the decrease in volume per customer, you have to add new customers, which we have been pushing hard on all year.”
“Blood Diamond” Movie
Another phenomenon the industry may have to neutralize, some sources noted, is the upcoming “Blood Diamond” movie. “In the U.S., people are attracted to a spectacle, and this movie may turn out to be just that,” said Abraham. “Ultimately, however, I don’t think the fallout from the film will be all that bad, if there is any at all. While there is certainly more to be done, this industry has done a great job of addressing the issue, which we are all very passionate about because, at its core, it is a human-rights issue.”
Frank agreed that the damage will be minimal. “I don’t foresee any negative impact from this film,” he predicted. “Every time there is a “Dateline” exposé on an issue like this, or even synthetic diamonds, everyone thinks that it will hurt the industry. But, in all my years in the business, I have never felt one bit of it. The bottom line is that women love diamonds and people will still get engaged with diamonds.”
TrendsThe United States market is still sweet on bigger and better goods, but some other sizes are experiencing demand as well. “Larger stones, 3 carats and above, are in strong demand, as has been the case for a while,” said Fischler. “Now, carat stones and smaller are starting to see some action, and that is a most welcome development.” However, according to some, 30-, 40-, and 50-pointers are not as active as they could be.
Fancy color stones are generally a healthy and robust category, although Nazarian has noted a bit of a downturn in fancy yellow requests. In terms of fancy shapes, the largest, best-quality stones are in shortest supply. Also, while there are those who feel that princesses have cooled off somewhat, Frank sees just the opposite. “When it comes to fancy shapes, it’s mostly princesses, square radiants, cushions and Asschers that are seeing demand,” he said. “Marquises are cold, while hearts aren’t even on the radar in my region.”
The Marketplace• Trading activity is mixed.
• Polished prices are stable.
• Rough prices remain steady.
• Smallest goods see good demand.
• Fine goods, 3 carats and up, still experience severe shortages.
• Fancies are generally healthy.
• Bigger and better fancies see extreme demand.
• Princesses are mixed.
• Bigger pears and ovals are selling moderately well.
• Hearts are flat to slow.
• Emeralds improve.
• Marquises are very slow.
• Fancy colors are generally robust.
Article from the Rapaport Magazine - December 2006. To subscribe click here.