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Profile: Nissim Zuaretz
May 11, 2014 3:52 AM
By Rapaport News
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RAPAPORT... D.N Diamonds was founded by David Arabov and Nissim Zuaretz in 2007. The company is a supplier of high-quality, certified polished diamonds in all sizes and categories, with offices in Ramat Gan, Hong Kong and Belgium.
 Name: Nissim Zuaretz
From: Israel
Company: D.N Diamonds – Partner
Rapaport News: What is your background and how did you get into the diamond industry?
NZ: I got into diamonds thanks to my best friend, Itzak (Tzahi) Arabov. I started working for his father David Arabov as a salesman in Israel and would go on sales trips to the U.S. About a decade ago, I became a partner and took over management of the business.
Tzahi eventually took over his father’s interest in the company and we became partners in D.N Diamonds. However, Tzahi is more focused on the company’s real estate subsidiary, Acro Group, which has projects and investments in Israel and New York.
Rapaport News: Sections of the industry have been criticized in the past for using diamond profits to invest in real estate so the diamond industry loses out. Is this the case with your company?
NZ: With us, it's actually the opposite. The profits from our real estate projects are invested into the diamond business. We might loan money from the diamond business to the real estate business, but we don't invest our profits from the diamond business elsewhere. We only expand our investments in diamonds because we believe in them.
Personally, I prefer to focus on diamonds because the industry operates at a much faster pace and it’s easier to seal deals. When I delve into real estate, I get a headache. There, with just $100,000 you need to go to the banks, appraisers and the whole mess. In diamonds, you can buy something for $5 million in three minutes and you haven't even signed anything.
There are some similarities between the two industries though, as both are part of the global market. If there is a crash in global stock markets, diamond prices will be affected and if there’s a real estate crash, diamond prices will be affected too. The different markets are no longer so separate and when conditions deteriorate in one market, they impact everything, and it is the same when things improve.
Rapaport News: How is the diamond market currently?
NZ: The market is doing well and I don't see any problems right now. Polished prices did not rise too much, so they won't decline by too much either. Prices are stable within a range of plus or minus five percent and whatever you have you can sell.
All my goods are good quality, nice stones that if I wanted to sell all of them tomorrow, and was willing to take 5 percent less, I could sell them and make money. Nice stones that are triple EX graded are like Rolex watches – you know you can always sell them. There will always be someone willing to buy.
Rapaport News: How is the Israeli diamond industry doing?
NZ: I think that Israel is the most active diamond market in the world today. Last year was positive for the Israeli diamond industry and I believe that 2014 will be even better. From my perspective, we’ve chalked up record sales between January and May.
The banks are very strong in Israel and don't give money away easily, which I think is good for the industry as it helps us avoid problems caused by overextended credit. No severe crash could happen here because the banks do not give enough credit that it could ever reach a point of panic.
At the same time, the banks should examine everyone’s suitability for loans on an individual basis and not prejudge the entire industry at once.
Rapaport News: How are you dealing with the slowdown in the Far East since last year?
NZ: The Far East is still a large market and it will remain that way, but that is why we are now expanding more into Europe. We are opening an office in Belgium and we now have a partnership with a Belgian company.
Europe is about high-quality diamonds. All the high-end retailers like Cartier, De Beers, Chopard, LVMH, etc. are in Europe. There are also a lot of people who invest in diamonds in Europe, which is why the European market is strong.
Rapaport News: Why do people buy diamonds from you as investments?
NZ: People are buying diamonds for investment purposes because they don't have anywhere else to put their money. Diamonds are the only high-value investment that is easily transportable – you can take them with you from place to place and it maintains its value.
When people ask me how diamonds have done in recent years, I tell them that 2008 was crazy, but the market has increased by a few percent each year since then, depending on which year you bought and also what type of diamond you bought. If you bought large stones three years ago, you would have made a lot of money since then – between 30 percent and 40 percent.
Rapaport News: What trends in the diamond industry concern you?
NZ: Nothing worries me in the industry, but I always keep an eye on what is going on in the economy. I don't fear anything in diamonds; I fear volatility in world markets that we can’t control. For example, if there is a natural disaster or a war. These are the kind of things that could affect the industry. However, I don't see anything else within the industry that could lead to drastic changes.
People complain about high rough prices, but you just have to be disciplined and realize that you don't need to chase after the rough. You should stand firm on the price that you believe the rough is worth. If that means you need to take some time to calm down and sit on the sidelines to let the craziness pass, then let it pass. But you should avoid getting caught up in the craziness of rough.
That is why I do not go to the tenders. I buy when I can assess the price of something prior to the sale. If I cannot see the price beforehand, I do not buy. For this reason, the sights do not interest me.
I don’t think there is a bubble in the rough market. Compared to the real estate market in Israel, for example, where prices are illogical, and you realize that something isn’t normal.
Rapaport News: Are you worried then that there will be a real estate crash that will affect the economy, and consequently the local diamond industry?
NZ: I don’t think so, as there isn't enough bank credit to the diamond industry for it to have an effect. When you consider how much money the banks put into the industry, it’s relatively small.
To the contrary, if something had to happen in real estate, it would push more money into diamonds and it could be to our benefit. In this respect, tight bank credit is a good thing. At the moment there is no bubble in the diamond industry and if we got through 2008, we can handle other challenges because that was really a crash. In 2008, you saw the financial strength of the people in the Israeli industry.
Rapaport News: How would you describe your overall philosophy for building a strong business?
NZ: Our business is family-based, whereby everyone is treated like they are part of one big family, and that feeling translates to our clients. When giving service, someone is always available when a client calls and I am also personally involved in almost everything that goes on in the business.
When you go to war, you have to have the right soldiers with you in order to win. It’s the same in business, you have to have the right staff to be successful.
The diamond industry is also about building connections, first with your suppliers and then with your customers. I take a long-term approach rather than looking for easy money. When dealing with suppliers and with buyers, I think it is important not to say to yourself, “I made a nice profit today. Thanks very much, I’m outta here.” You always need to think about your vision for the future.
We work hard to attract clients by attending various exhibitions and via the internet. Tools such as RapNet are very effective platforms to meet new clients. We get first-time buyers through RapNet and they come back to us directly because they already feel like they’re part of the family. After their initial experience most clients stay with us because we focus on building relationships with suppliers and buyers that last many years.
Rapaport News: What advice would you give to someone starting in the diamond industry?
NZ: The diamond business is one that you’ll either love or hate. There is no in between. If you believe in this industry and the product, you can sell it. But you need to love it. Even today, after 20 years in the industry, when I see a beautiful stone I’m able to say “Wow,” like it’s the first time. If you love it, then you can transmit that passion to your clients.
Rapaport News: How do you envision D.N Diamonds evolving in the next five to 10 years?
NZ: The past few years have been positive for us and we want to continue to grow at the same pace. We are focused on changing with the industry and always being in tune with every development in the market. By doing so, I believe we can maintain that growth for years to come.
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