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U.S. Wholesale
By Ricci Dipshan
Coming out of the holiday season, diamond wholesalers were finally able to gauge how their end-of-the-year sales went. While the season started slow, many were happy with how it ended. “The sales were a little weak in the beginning but geared up at the end,” observed Sumeet Sethi, sales director at gemstone and diamond manufacturer Manak Jewels in
San Francisco. Ami Koret, vice president at Davidoff Diamond Corp. in Houston, Texas, saw a similar situation. “Most sales happened in the final two weeks of the season. It seems like every year, consumers wait later and later in the season before they buy.” Overall, many shared the sentiment of Jay Gilbert, owner of the Los Angeles–based Coast Diamond, a manufacturer of fashion and bridal jewelry, that holiday sales were “more or less on the same level
as 2011.”
While there was not a significant increase in holiday spending, those in the industry were content to have a steady and strong season. There was a prevalent sense, however, that the season was not at its full potential due
to recent national crises and consumer uncertainty. “I feel that with Hurricane Sandy and the tragedy in Newtown, people were less than enthusiastic and possibly even guilty about spending money on luxury items. The whole fiscal cliff situation was a contributing factor
as well,” said Jay Moskovitz, vice president of loose diamond wholesaler Robert Moskovitz Co. in New York City. That unstable environment unfortunately continued into January, leading to restraint in the industry and stunting wholesalers’ sales. “The overall market today is still very cautious. Most retailers are getting goods on memo and only buying what they need immediately,” noted Ed Eleasian, vice president of Elie International, a New York City manufacturer of colored gemstone and diamond jewelry. In terms of jewelry, “the best sellers this season were stud earrings,”
said Koret, adding that consumers were noticeably price conscious during the holidays. “Larger stones were slow this season. The affordable goods did very well, while almost nothing sold in expensive goods.” Throughout the holiday season and continuing into the new year, “Rounds, cushions and princess shapes from 1 carat to 3 carats were
strong sellers,” said Moskovitz, adding that certified goods were also in high demand. “Customers want certificates, even in the lower-end goods
— I1 to I2 qualities, for example. We are also moving a lot of inexpensive Gemological Institute of America (GIA) goods in natural brownish, greenish yellows.” A trend that wholesalers and retailers are continuing to see is informed consumers who do extensive research online before making a purchase. This leads to “demand that is very specific,” said Sethi. “The consumer today is more knowledgeable about diamonds than ever before.”
Price fluctuation in rounds is also responsible for the industry’s cautious attitude. “Because of the volatility in rough diamond prices, everyone is taking a wait-and-see position,” said Eleasian. He also noted “price resistance especially from those buying for stock. They are concerned that the drop in rough prices will translate into a drop in polished and they don’t want to get stuck with overpriced goods.” However, “aside from uncertainty concerning rounds, overall prices in the market are holding steady, despite the fact that nice goods are hard to come by,” said Moskovitz. Specifically, “1.5-carat to 2.5-carat goods are harder to replace at market prices,” said Eleasian. “Fancy shapes are also still in shorter supply than rounds,” added Koret.
While most wholesalers had similar sales experiences this holiday season, they had different opinions about where the market is heading in 2013. Some, for example, saw the strong momentum from holiday sales continuing and a steady, though gradual, improvement in the nation’s economy. “January has started strong, and business overall is slowly improving from our perspective,” said Gilbert. Others, however, still stressed the hypercompetitiveness that has come to define the U.S. market and the need to be ever more vigilant and proactive in chasing sales in the new year. “Those with a strong marketing and sales approach will prosper and those who wait around will see their business shrink,” predicted Eleasian. Then there are those wholesalers who relate the industry’s performance
to the nation’s political gridlock. “How the industry will fare in the
future is tied to how fast the U.S. can solve the impasse in Washington,” declared Koret. “The uncertainty about taxes and spending is holding consumers back.”Article from the Rapaport Magazine - February 2013. To subscribe click here.
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