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U.S. Wholesale
By Brian Bossetta
Though many economic analysts claimed the 2014 holiday season was one of the best since the global economic crash and a sign of brighter days ahead, some U.S. wholesalers were disappointed with their sales. Despite seeing a spike in sales leading up to Christmas, they were hoping to ride a much bigger wave of resurgent financial health. Moshe Salem, president of Los Angeles–based M.S. Diamonds and Jewelry, said business was about on par with the 2013 holidays — “which is to say soft” — and that he made “some very nice sales, but nothing amazing.”
Among his retail customers, Salem reported a mixed bag of results, with some describing the holiday season as difficult and those on the other end of the spectrum saying it was the best season in a while, or even “the best season ever.” That mix of results from his customers pretty much mirrored Salem’s own holiday. “Some of our customers bought more than we expected, some less.” He added that he expects the uneven pace of sales to continue into 2015. “My customers — and we too — need to constantly reinvent ourselves,” he said. Although Amish Mehta, president of New York City–based loose diamond and jewelry manufacturer Amipi Inc., said he had an overall good year for 2014, his holiday sales “were much weaker than we had expected.” One factor, Mehta said, was the rising popularity of electronics as a luxury alternative. “My guess is that everyone wants an iPhone6 instead of diamonds,” Mehta said.
According to Adam Mirzoeff, vice president of East Continental Gems, a wholesaler based in New York City, the nature of the industry has changed to a more year-round business, which is why, he believes, there’s less of a dramatic jump in sales at Christmas. “Expectations were not met,” Mirzoeff said. “However, we have a changing marketplace where Christmas sales start in September. There is more of a steady flow all year rather than waiting until Christmas to save the day.” Michael Poulad of Michael Poulad Diamonds, a manufacturer of fine diamonds in New York City, had the same tepid response to holiday sales. “It seems everyone was hoping it would be better,” Poulad said, adding, however, that the U.S. market seems to have picked up overall. Mirzoeff, who deals in rare and collectible gems, reported more activity in higher-end goods in the $20,000 to $50,000 range and in customers looking for “interesting designs, estate items and second-hand goods.” Diamond marketing by major industry leaders, such as De Beers, is not helping the diamond industry and, in fact, contributed to less robust holiday sales, according to Ari G. Abaev, president and owner of ABA Diamond Corporation, manufacturer of Victorian Cut Diamonds in New York City, “The Forevermark branding is good for De Beers, but not for the rest of the industry,” Abaev said, adding that the original “Diamond is Forever” campaign conveyed a personal message that resonated with consumers and trickled down to the rest of the industry. “Today, they are on the wrong track,” he said.
Consensus among U.S. wholesalers seems to be that the second round of trading with Indian dealers from the Gem and Jewellery Export Promotion Council (GJEPC) was a huge success and should help drive business well into the new year. The event was held in mid-January at the Diamond Dealers Club (DDC) in Manhattan. The first India week took place in August 2014. “What the DDC has done is brilliant and much appreciated,” Mirzoeff said. “Whenever you bring people together and there’s activity among dealers, business gets done.” Timing, in Abaev’s view, was the key to the event’s success, taking place “right after Christmas, when there was more money to spend and dealers needed to replace inventory.” Poulad called the event “good strategy” to forge relationships and promote business. He said that SI goods, and some VS, predominantly in 1 carat and 2 carats, appeared to be the most actively traded goods on the floor. But there were also a few larger items sold, Poulad noted, including a couple of larger fancy yellows in 8 carats and 10 carats. In Mirzoeff’s view, such events provide dealers with a great opportunity to compete with the growing trend of online sales. “Honestly, there is not enough face-to-face networking in our industry,” Mirzoeff said. “We need more events like these so dealers can leverage their time and contacts and build relationships.” Person-to-person trading also allows dealers, Mirzoeff added, to be more flexible in selling goods and to be less reliant on fixed prices. Poulad agreed, saying: “With so much of the business shifting to the internet, it is not as personal as it used to be. It means a lot when you can sit across from someone and do business. You’ll go that extra mile.”Article from the Rapaport Magazine - February 2015. To subscribe click here.
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