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Shows
World Woes Weaken Basel Shows
Overall, traffic and sales at the Basel shows were dampened by a gloomy conjuncture of international political and economic concerns.
By Francesco Rosa
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| Scarselli Diamonds |
The global climate of uncertainty was the undesirable backdrop in Basel in March for Baselworld, a premier international watch and jewelry show, and The Diamond Show – Basel 2015*, the world’s only exhibition dedicated exclusively to diamonds and diamond jewelry, now in its second year. Attendance at Baselworld was down by 3 percent from 2014 to 150,000 and exhibitors said transactions were down also. This was partly due to the fact that the annual Hong Kong jewelry shows ended less than two weeks prior to the opening of both venues in Basel. There was a sense that those who traveled to Hong Kong didn’t want to travel so soon again and besides, they had already bought the goods they needed in Hong Kong.
Also contributing to buyer hesitation were economic and political events playing out on the world stage that kept many of Basel’s usual big spenders at home. Those events included the Chinese government’s anticorruption campaign, which has dampened sales of luxury “gifts” in the country, the collapse of the ruble in Russia, the escalation of terrorist attacks in the Middle East and the troubled economies and weaker currency in the eurozone.
“People are concerned all the time, but I don’t think there is an issue of money. There is a lot of money out there to be spent. There isn’t the mood,” commented Eden Rachminov, a third-generation diamantaire and managing partner of Rachminov Diamonds 1891, one of the largest manufacturers of natural fancy color diamonds.
“The Asians already spent their money in Hong Kong. America is getting ready for JCK at the end of May,” continued Rachminov. “The Russians are not really buying now because of the situation in Ukraine and the troubled ruble. So timing and geography really dictate the identity of the customers.”
Notwithstanding such adverse conditions, Rachminov and other established fancy color diamond dealers such as Bruno Scarselli, of Scarselli Diamonds in New York City, confirmed the ongoing interest and strong prices for the highest-quality goods in all fancy colors, with pink and blue diamonds leading the pack. “In the past five years, I have seen the prices on fancy color diamonds appreciate at a rate of between 15 percent to 25 percent on a yearly basis,” said Scarselli, adding that important jewelry brands have also become “much more vocal about colored diamonds.”
Despite the slow start to the Basel show, Scarselli noted that two weeks earlier, “we had a fantastic Hong Kong fair. We actually sold more than we have ever sold at any fair in Hong Kong. And I am quite happy to report that I have bought a lot of diamonds here in Basel.”
In white diamonds, the mood was cautious and discerning. “People are buying more specifically and more carefully this year,” stated Rosy Blue Director Raj Mehta. “They want what is the best from all criteria within a stone. So if they need an SI, they are looking for a nice SI. If they are looking for a D flawless, then they are looking for the perfect D.” Mehta confirmed that round diamonds continue to be his company’s bread-and-butter business, with a preference for VS goods in the white range.
In white fancy makes, dealers observed a rise in sales of heart-shaped diamonds. “I think it is also because of Lady Gaga — she got engaged with quite a large heart-shaped diamond,” commented Gil Melamed, managing director of Vulcan and Co., a fancy-make diamond boutique in business since 1952. “We sold more heart shapes lately and this might be one of the reasons.
“In the hard-core fancies, pear shapes are by far the highest-selling item for us,” continued Melamed, “followed by ovals and emerald cuts. Cushions are also a good item, though more subject to personal taste due to the many different styles of cushion cuts possible.”
Most exhibitors at Baselworld concurred that the majority of serious loose stone buyers this year were from global European brands who had a strong presence in the hall of watch brands, where traffic was heaviest. The remote location of the diamond hall far from the center of the watch-dominated show was blamed for traffic that was down by at least 25 percent in the hall and, as a result, a decrease in quality buyers.
Scarselli, whose company exhibited at both Basel shows, said, “We are seeing fewer Asian buyers than last year, almost no Indian buyers and absolutely no Russian buyers.” He described Basel buyers this year as “pretty much a European crowd” and noted that the weakened European economic situation dampened the psychological mood of those buyers.
A new exhibitor at The Diamond Show this year was LLD Diamonds, a division of the Leviev Group of Companies. Even though traffic at the show was sluggish this year, Greg Sofiev, chief executive officer (CEO) of LLD, received visits from a few prominent dealers and from buyers for some of the big brands usually present in Basel, including a buyer for a Middle Eastern brand based in Dubai.
“We also met buyers from smaller European jewelry chains, people who have five or even 25 stores in Europe,” stated Sofiev. He added that buyers who came to the show “know that the market is soft, so they want to get a stone right now at a good deal and they are making firm offers to buy at a specific price. They want to know if you are a seller, and the answer is ‘yes, we are sellers,’ we are not holding back on goods, we have a big production line and we move with the times.”
Despite an obvious lack of Asian buyers this year, dealers at both shows in Basel believed that the underlying reason for softer sales from that market is not a lack of interest in diamonds, but rather a matter of mood resulting from the increased financial scrutiny wealthy Chinese buyers are subject to from the government. That heightened government interest has curbed spending, especially on luxury goods, by wealthy consumers keeping a low profile to avoid drawing attention to themselves.
“It is a matter of time,” observed Rachminov. “This cannot last forever. It has already been going on for a year almost, so I think we are going to be out of it in four to six months from now. The market, also for the European brands, is Asia-led. Once China is back to buying, I think everything is going to pick up again.”
*The Diamond Show – Basel 2015 is owned by Rapaport Group, which also owns Rapaport Magazine.Article from the Rapaport Magazine - April 2015. To subscribe click here.
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