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U.S. Wholesale
By Shuan Sim
According to many diamantaires, business has been mostly quiet, even as sales have grown slowly but surely in recent months. “Business picked up over the summer,” said Andrew Rickard, vice president of RDI Diamonds, a wholesaler based in Rochester, New York. “June and July were soft, August became better, and October, even more so.” Many dealers, however, have yet to experience the expected upswing in sales from holiday season shopping, even as the days draw closer.
“There has not really been a big bounce back,” said Douglas Blank, president of Joseph Blank, Inc., a diamond wholesaler and manufacturer in New York City. “People have said that unemployment has become low and all that, but business is not as good as we would have hoped,” he remarked, explaining that low demand on the consumer end affected his clients. Blank highlighted that retailers are stocking no more than they need. He was of the opinion that trade shows have returned flatter and flatter results in recent years. Others just felt that the prevailing depressed mood is seasonal. “In the past few years, the holiday season for buying hasn’t started until late November, or even early December,” said David Wiener, president of Harry Kotlar & Company, a jewelry manufacturer and diamond dealer in Los Angeles. He described business as having been “slower,” also attributing it to a lack of consumer demand, but noted that his company’s bread-and-butter goods — its trademarked Kotlar cushion diamonds, as well as round stones — have been moving well as always.
Many agreed that buyers have been asking for steep discounts lately. “Prices have been all over the place,” Carl Edelstein, president of Edelstein Diamonds, a diamond wholesaler and manufacturer in New York City, pointed out. He noted that polished diamond prices have been falling, but U.S. wholesalers are also facing price competition from Indian suppliers. “Indian suppliers are offering goods at prices that are too cheap, which are undercutting everybody,” he stated. Wiener concurred with the sentiment that pricing conditions have been challenging. “I have to be price competitive to make sales,” he said. Blank commented that while buyers have been asking for discounts, not everybody gets them. “Only those who have cash on the table are getting better prices,” he explained, adding that not many buyers had the luxury of that much liquidity. “Many are telling me that they wish they had more free money for new collections, to try new designs.” The softness of prices also meant that restocking could be a challenge. “Well-made goods at the right prices are hard to come by,” said Edelstein, adding that getting what he needed at his desired prices had not been easy but he was able to secure his inventory.
White diamond sales have been spotty, according to Marc Lazar, owner of Marc Lazar Inc., a wholesaler in New York City dealing in both white and colored diamonds. Lazar highlighted that there are buyers out there for white goods and that he was still getting calls for specific stones.Different sellers seemed to do well in different grades of white diamonds. Edelstein noted that for him, lower-grade rounds in the SI range and well-made fancies in the VS range moved well, adding that business has been improving each month. According to Wiener, people have been focusing on buying better-quality jewelry pieces. Melee diamond dealers have also reported steady sales in recent weeks.
Developments in the U.S. have also gotten wholesalers talking. Blank was interested in the prospects that the creation of the Diamond Producers Association (DPA) could bring. “It could provide what the trade needs to be more competitive for the customer’s dollar,” he said. However, he believed that the diamond industry is currently going through a contraction and will become leaner at the end of it. “Older companies and overseas companies that have an established presence will be able to weather these tough times,” he commented. He speculated that those who try to compete solely on price points would not have it as easy. U.S. suppliers were also pleased with the recent reduced production. “I’m glad manufacturing has been cut down, allowing the market to absorb what’s currently there,” pointed out Edelstein. Lazar noted that as manufacturing slows down, it might help correct the pricing of white diamonds in the supply cycle. Rickard was of the opinion that several markets around the world have pulled back and felt many global factors were needed to make things better. “I’m hoping the Chinese market will bounce back,” he said. “There are signs that there is already increased demand coming from there.”Article from the Rapaport Magazine - November 2015. To subscribe click here.
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