|
|
U.S. Wholesale
By Brian Bossetta
If anything has slowed the positive pace of wholesale diamond industry sales, it has been the persistent cold weather that has held the country in its grip. Jai Bhansali, vice president of sales at Diagem, a loose diamond wholesaler in Chicago, said the harsh winter — particularly in his Windy City location and in cities across the Northeast — has dampened the enthusiasm of shoppers, especially impulse buyers. “There have not been as many consumers who buy on a whim,” Bhansali said. “A lot of customers just don’t want to stay out and shop in this cold.” Shakeel Japanwala, manager of the certified diamond division at C.D. Diam in New York City, also pointed to the frigid weather as a possible culprit behind the slowing of sales. “The past two months have been bad compared to last year,” Japanwala said. “In 2013, January and February were my best months. Hopefully, things will pick up with warmer weather.” Rounds and cushions, D to I, Japanwala said, have been his most consistent sellers. But while February through early March was slower than a year ago for Bhansali, business began to quicken as March rolled on. “The past two weeks have been stronger,” he said toward the end of the month, hopeful that sales would increase with winter tapering off. “Others have been saying the same thing.”
Japanwala said his Hong Kong office, which opened in January 2013, has been outperforming his New York office in recent months. “Right now, sales in Hong Kong and China are better than America,” he said. That Asian momentum could partly be attributed to the Hong Kong International Jewelry Show in early March, according to a New York City diamond wholesaler, who wished to remain anonymous but traveled to Hong Kong to attend the show. “Business was strong at the show — definitely better than last year,” the wholesaler said. “There were new customers and the Asian markets seem to be catching up.” Just as a rising tide lifts all boats, strengthening demand in Asia could also boost the U.S. market because many wholesalers sell to the Far East.
On the bright side, Bhansali said, the items that have been moving for him have been costlier items, 2.50 carats to 3.50 carats and up, while goods below 2 carats have been moving more slowly. “Sales have been fewer,” he said, “but the prices of those higher-quality goods add up.” Like Japanwala, Bhansali noted that rounds and cushions are selling, as well as ovals, and that fancy colors have been moving better also — a trend he has noticed that’s been steadily building over the past two years. Raphael Maidi, president of Maidi & Co., a New York City–based diamond and gem manufacturer that specializes in fancy color diamonds, said he’s observed the same trend. “Demand for fancy colors has gone up because of their rarity, beauty and because there’s more exposure,” Maidi said. “Consumers know more about fancies now.” Items, particularly rings and earrings, in yellow, 3 carats and up, in SI1 and higher are Maidi’s best sellers.
Prices have increased anywhere from 2 percent to 5 percent in recent weeks, according to Moshe Salem, president of Los Angeles–based M.S. Diamonds and Jewelry. “There is some resistance,” he said. “People are still expecting more for their money.” Those prices are increasing as higher-quality goods — 2.50 carats in rounds, cushions and ovals — are more difficult to replace. “You can buy all you want in 1 carat to 1.99 carats. But higher-quality goods are much harder to find, especially in ovals,” Bhansali said. In Maidi’s judgment, the shortage of higher-quality goods is not just due to stronger demand but also to miners holding back on certain goods. “Yellows in 3 carats and up and pinks in 1 carat-plus have been most difficult for me to replace,” Maidi said. Wholesalers seem to be confident in the direction the industry is going. That confidence, as expressed by Maidi, is buoyed by the improving economy. “There seems to be a better mood economically, especially with improving job numbers,” Maidi said. “That gets more consumers spending and stores moving goods. The industry will keep pace with the economy.” And while Salem is generally optimistic, he also notes the uncertainty coming out of Washington, particularly debate over Obamacare, “that has had a negative effect on the economy, including our industry.” But Bhansali believes the strengthening economy and stock market — and warmer weather on the horizon — are solid indicators for a brighter future. “Things might not be great, but they are not terrible,” Bhansali said. “I think the next few months are going to be strong.”Article from the Rapaport Magazine - April 2014. To subscribe click here.
|
|
|
|