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U.S. Wholesale
By Shuan Sim
The Christmas holiday selling season was a letdown for many diamantaires as sales, while an improvement over average sales throughout the year, did not meet expectations. “It’s nothing like what you would call a Christmas season at all,” said Hussain Hasnie, sales representative at C M Diamond NY Inc, a wholesaler in New York City. Dealers around the country saw results that hovered around the same level as in 2015, with some breaking ahead and some falling under. “I thought that people would feel better about the results of the elections and be in a better to mood to buy, but that is not so,” said Roderick Watterson, owner of Diamond Exchange Dallas, a dealer in Dallas, Texas.
“Only middle-quality to cheaper goods have been moving for me,” said Rayaz Takat, CEO of Takat Gems USA Inc., a wholesaler in New York City. Many sellers found that where they had trouble moving I-clarity goods in the past, they were able to move those goods in this holiday season. Big stone sales — 3 carats and up — have all but died off, with smaller goods prevailing, reflecting the typical demand for diamonds that go well with holiday gifts, including earrings and other fashion jewelry. Ovals have been popular this holiday season. Dealers have been finding restocking that shape increasingly difficult, but otherwise report no inventory trouble. “Right now, it seems like it’s easier to sell than it is to buy,” said Hasnia. Restocking is challenging given that everyone is looking for better prices, and that squeezes margins, he noted. Wholesalers speculate that VS-clarity diamonds might be harder to restock in the coming year as supplies run lower. Some felt that if the manufacturing of middle-quality goods remain at current levels, there might be a cause for concern in the near future as supply would not meet demand.
Prices remain tricky for wholesalers. “The holiday season is when you typically get the least price resistance given the speed customers need to fill their orders,” said Andrew Rickard, vice president of operations for RDI Diamonds, a wholesaler in Rochester, New York. “They’re not demanding steep discounts, but prices certainly have been difficult,” noted Steve Eisen, secretary at Nat Eisen & Sons Inc., a wholesaler in New York City. “We do have nice goods that people want and everyone is trying to close the sale quickly so they don’t want to waste too much time. Everyone is trying to meet the competition,” he said.
“It’s an interesting year so far,” said Rickard. “Most years, my clients usually go, ‘It’s all good’ or ‘It’s all bad.’ This year I’m seeing a lot of mixed reactions from customers even in the same city,” he added. Rickard recounted that his clients described 2016 as being highly unpredictable. Even in places that had been doing well, for example cities in Texas, which has benefitted from the strong performance of oil and gas in 2016, there were still plenty of clients lamenting the lack of sales. “There seem to be more bad than good reports,” Rickard elaborated. “Many of my clients sound disappointed with holiday sales this year,” said Morris Szklarski, president of Kelsol Diamond Company, a wholesaler in New York City. He added that he and many other diamantaires have been put on the defensive given many jewelers’ poor sales, and they have been nervous and extra careful about extending credit in recent months.
For most diamantaires, 2017 will be business as usual. “What can I say? I will take the new year as it comes,” said Szklarski. Others maintain a brighter outlook. “I’m positive it will be better,” commented Takat, though he could not pinpoint a definite reason why he felt so. Others hoped that the uncertainty following the presidential elections would settle in 2017, improving buying moods. “Perhaps once Trump takes office, people will feel a lot better about the economy and where it’s headed. There still seems to be some uncertainty right now,” concluded Watterson.Article from the Rapaport Magazine - January 2017. To subscribe click here.
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