The strong sales push coming off the New Year finally abated
in April, as wholesalers across the nation reported less-than-spectacular
business. “Sales over the past 12 weeks have been good, but the past three
weeks have definitely been slow,” noted Jai Bhansali, vice president of sales at
Diagem, a loose diamond wholesaler in Chicago. Shakeel Japanwala, manager of
the certified diamond division at C.D. Diamond in New York City, saw a similar
trend: “Overall, April was running very slow, which was a change, because
things were so good in March.”
Part of the reason for the slowdown in the U.S. wholesale
market is a weakening of domestic demand. Raphael Maidi, president of New York
City–based diamond and gem manufacturer Maidi & Co., reported that “there
is more demand coming from outside the U.S., especially for larger and
One of the biggest issues in the wholesale market in April
is the widespread difficulty many companies are having restocking their inventory.
“It’s hard to replace what you sell because the supply is more controlled, and
the goods are not being put out on the market,” observed Maidi. This scarcity
of goods is especially noticeable for high-end and colored stones.
“There is a shortage if you need high-quality goods,” said
Sumeet Sethi, sales director at gemstone and diamond manufacturer Manak Jewels
in San Francisco. “Anything in F and G colors is hard to find right now. And
the same goes for colored diamonds, with brown and black diamonds more difficult
While wholesalers who stocked up on inventory over the past
few months are in a better position than those who are currently looking to
replenish, many of them are still worried that the inventory shortage will
continue for the foreseeable future. “We have been aggressive in the first
quarter, so we are very well stocked, but it seems like it is going to get much
harder in the coming months,” worried Amish Mehta, president of the New York
City–based loose diamond and jewelry manufacturer Amipi Inc.
Due to high demand and low production, fancy shapes are also
hard to come by. “As far as rounds go, you can find whatever you want, whenever
you want — but anything other than round is sparse at best,” said Bhansali.
“Overall, cushions and princesses are the best movers, and ovals and radiants
are doing well, too. Everything
except for rounds is moving quite well.”
Princesses in particular are at the forefront of the demand
for fancy shapes. “Princesses are hugely popular right now, but there is a big
shortage of them, especially in 1-carat sizes,” observed Japanwala.
In response to the shortages, market prices for many fancies
have increased throughout the industry — a dynamic that many wholesalers see as
just the beginning of another robust and long period of price increases. “In
terms of price, rounds are stabilized right now, but for fancy shapes, I don’t
see an end to the price increases because of the lack of production,” noted
Demand for fancy shapes, however, is not pervasive. While
some wholesalers are burning through their fancy supplies, others are noticing
resistance to their high prices. “Other fancies besides princesses are slow,”
observed Japanwala. “Emeralds are not selling at all, and radiants are slow as
well, because of the price factor. Everything now depends on the price factor —
if the price is good, it will sell. ”
Looking ahead, wholesalers are optimistic that the market
will pick up in the foreseeable future due to the strengthening U.S. economy.
“I think we should be doing well in the next few months — overall, things have
been improving year by year. In the U.S., the job market is picking up, and the
economy is improving, so that is going to positively affect the jewelry
industry,” predicted Maidi.
Others, however, are expecting the market to get more
difficult with a continuation of April’s price-supply tug of war. “I believe
prices will go higher by 10 percent to 20 percent because diamond supplies will
be very tightly controlled over the next months,” said Mehta.
And then there are those who are taking a wait-and-see
attitude, stressing that the market has always been volatile and unpredictable.
“Nobody knows what is going to happen in the future — they don’t know if the
price is going to go up or down or be stable. It’s all a guessing game.
Overall, the market is soft right now, and we don’t know what will happen,”
- Stones ranging in size from 1 carat to 2 carats and
princess and cushion cuts are in high demand. Oval and radiant cuts are also
seeing a rise in popularity.
- There is a shortage of fancy shapes in the market,
especially of princess cuts around 1 carat in size. There is also a shortage of
stones in F and G colors.
- Prices have increased for fancies, especially princesses,
while they have held steady for rounds.
• There is a steady demand for yellow diamonds 5 carats and
Article from the Rapaport Magazine - May 2012. To subscribe click here.