Rapaport Magazine

Momentum Builds

U.S. June Wholesale Market Report

By Ricci Dipshan


Coming off a slow April, the wholesale market remained steady. Though the industry was hoping for more activity, there was no widespread concern over May’s performance because many were seeing demand in the momentum leading up to the JCK Las Vegas Show.

“Sales have been flat compared to 2011. This is usually the case — always just prior to JCK Las Vegas, people are hesitant to see us and want to wait for the show,” said Ann S. Arnold, chief executive officer (CEO) of bridal wholesaler Lieberfarb, a manufacturer and designer of bridal jewelry in Rahway, New Jersey. 

Some wholesalers were seeing an uptick in their sales even before the show opened. “Sales slowed during April, but in May, year over year, there was a slight increase,” said Nilesh Sheth, president of Nice Diamonds in New York City.

POPULAR ITEMS

The current market is marked by a strong consumer demand for fancy shape diamonds. “While rounds are still strongest, lots of fancies, especially cushions and radiants, are doing very well,” observed Andrew Rickard, vice president of operations at the Rochester, New York–based loose diamond and jewelry manufacturer RDI Diamonds. Specifically, added Greg Telonis, president of Mr. Baguette, a manufacturer of small loose diamonds and jewelry in New York City, “there is strong demand for all fancy shapes from 1 carat to 3 carats. Overall, smaller diamonds in both rounds and fancies are selling better than larger ones.”

Demand is similarly strong for some colored diamonds. “Sales have been particularly strong in champagne, brown and chocolate colors,” observed Jay Moskovitz, vice president of loose diamond wholesaler Robert Moskovitz Co. in New York City.

Manufacturers and wholesalers also have noticed that consumers are increasingly asking for items geared toward their specific tastes and styles. “The overall trend seems to be the demand for customized jewelry,” explained Telonis. “Consumers want to have input into their purchases and the local jeweler is accommodating this by creating handmade, hand-fabricated rings, earrings and other pieces to fit the individual customer’s needs. This is also why smaller loose diamonds have become strong — the jeweler is using them to build these custom designs.”

Sheth further explained this development. “While there is a shift toward lower-price-point merchandise for average consumers, higher-end consumers are after more one-of-a-kind, collectible items. They are more interested in having something unique.”

This trend has carried over to the purchasing habits of many retail buyers. “Retailers continue to hold back on buying new products unless they are unique and compelling products,” said Arnold.

As consumers go after stones of particular cuts and sizes, supplies in those categories are quickly dwindling. “We are well stocked for the season, but there is difficulty procuring the most popular merchandise,” observed Sheth. “Everyone is looking for the same goods for the U.S. market.” 

REPUTATIONS IMPORTANT

Any time that goods are difficult to procure, companies that have strong reputations with suppliers have an advantage in the market. “It is becoming more difficult to find certain products on the market, but if a wholesaler has established relationships and pays in a timely fashion, then the goods will come to him. Established wholesalers have remained strong because of their good name and longevity,” said Telonis.

Due to the supply dynamics in the market, prices have continued to rise. “Prices are definitely getting stiffer and this can be directly attributed to the shortage of goods available,” observed Moskovitz. Generally, added Rickard, “Prices on rounds are much more reasonable, while fancies have risen.” While all fancies are experiencing increases, princess prices in particular are quite volatile. “We are seeing overall increases in princess cuts of all sizes,” said Arnold.

OPTIMISM PREVAILS

The market’s resilience in the face of increasing prices and a slow economic recovery is providing some wholesalers with optimism going forward. “The American market is strong and will continue to be so for the foreseeable future because there is a large demand for certain goods. The bottom line is if you can find the merchandise, you can sell it,” said Moskovitz.

Others may agree but they are quick to point out that the industry must remain proactive to keep sales strong. “Demand has really been steady, but I believe to stay ahead, we have to offer more in the form of service. That’s where we have found the greatest success — by exceeding jewelers’ expectations” said Rickard.

 

THE MARKETPLACE

  • Fancy shapes, particularly cushions, radiants and princesses from 1 to 3 carats in size are popular. A shortage of fancies in the market has substantially increased their prices.
  • Stones in colors ranging from G to J and in SI qualities are high in demand, while certified stones in D to H in VS are also popular.
  • Brown and champagne colored diamonds are strong sellers.
  • High-end customers shopping for custom-made jewelry are driving demand.

Article from the Rapaport Magazine - June 2012. To subscribe click here.

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