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U.S. Wholesale
By Brian Bossetta
Going by what wholesalers had to say recently about business since the end of the holiday season, 2014 is shaping up to be a solid year for the diamond and jewelry industry. The month of January, following the crescendo of the holidays, is usually the slowest month of the year, according to most wholesalers. Not so this year, however, said Nick Jain, vice president of sales at Paramount Gems in New York City. “January was stronger than expected,” Jain said, “particularly for larger stones, 3 carats and up.” That momentum, Jain added, continued flowing into February and with a stabilizing economy Jain sees no reason for it to ebb. “I have a positive outlook for the months ahead.” The improving economy, especially more encouraging job numbers, has provided Ian Levine, owner of Sylvie The Bridal Collection, a division of Spectrum Diamonds in Plano, Texas, reason for optimism as well. “I feel good going forward,” Levine said. “More jobs means more people with disposable income to spend on jewelry.” Compared to 2013, Levine said 2014 would “probably be better.” January was also a good start to the new year for Sumeet Sethi, sales director at Manak Jewels, a gemstone and diamond manufacturer in San Francisco. “December ended strong and January began strong and that’s continued,” Sethi said. “I feel very positive about 2014.” Sethi also noted the improving economy and a more cooperative political climate — at least for the moment — in Washington. “The stock market going up makes everybody happy and that helps business, especially for more expensive items,” he said.
But while wholesalers seem to be happy with the start of the year, they would probably be even happier with warmer temperatures. “What’s slowing down business has been the cold weather,” said Jay Moskovitz, vice president of Robert Moskovitz, a loose diamond dealer based in New York City. “Nobody wants to go out and shop in this weather and that reduces demand.” Yet, despite the winter storms that have hammered much of the country in the past couple of months, Moskovitz said business was “steady” and he felt confident sales would increase with warmer weather in the coming months. Rounds, cushions, ovals and pear shapes have been top sellers for Moskovitz.
Levine, who’s noticed an increase in demand for goods from 15-pointers to 75-pointers, said prices for those items, reflecting the heightened demand, have also gone up in the past three months. “Prices for fancy colors, across the board, have also risen,” according to Sethi. “Fancies seem to be very popular right now,” he said, adding that a “decreased supply chain” is the reason for the uptick in fancy prices. “There’s less manufacturing,’ he explained. Jain, too, has noticed an increase in demand for fancy shapes. “Fancies have picked up nicely in recent weeks,” he said. “Rounds are continuing to sell strongly, with square and rectangular shapes doing best in the U.S. market.” Jain noted that heart and pear shapes fare better in Asia. And though Levine said he was currently able “to source all our needs,” replacing inventory has been tricky for Jain. “Seems whatever you’re trying to find at the moment is what’s hardest to replace,” Jain said. “We’ve had the most difficulty replacing SI to VS2 goods of around 2 carats.”
Adam Mirzoeff, vice president of East Continental Gems, a wholesaler based in New York City, said he’s been focusing the majority of his business since the start of the year on sapphires, particularly blue sapphires, although he said yellow and pink are also strong sellers. The reason for the shift in focus, Mirzoeff said, is due to the “availability, popularity and price point” of sapphires. According to Mirzoeff, sapphires allow retailers to offer an alternative to diamonds to customers looking to make a luxurious purchase. “You can buy a beautiful, untreated sapphire of 5 carats for anywhere between $20,000 and $50,000,” Mirzoeff said, adding that a 5-carat diamond of similar quality would cost at least twice that amount. “I don’t think this trend is going to hurt the diamond business,” Mirzoeff said. “But the trend in sapphires is building.”Article from the Rapaport Magazine - March 2014. To subscribe click here.
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