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Moshe Mosbacher Speech Addresses the Big Stone Market

The 47th Street Perspective -- New realities: Where do we go from here?

Sep 10, 2009 11:14 AM   By Moshe Mosbacher
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RAPAPORT...  The following  speech was delivered by Moshe Mosbacher, acting president of the New York Diamond Dealers Club, at the Rapaport International Diamond Conference in New York on September 10, 2009.

“NEW REALITIES: WHERE DO WE GO FROM HERE?”

I am delighted to be here today with my distinguished colleagues from throughout the world.   I am honored to share this platform with my colleagues, DMIA President Ronald Friedman and Hertz Hasenfeld, vice president of Hasenfeld-Stein to discuss “The Big Stone Market: The 47th Street Perspective,” a subject in which I have a very strong interest.  It is no secret that the last two years have been difficult for the entire chain of our industry: the mining companies, sight-holders, wholesalers, manufacturers, dealers, brokers and ultimately retailers.

Nevertheless, the last few months have produced several positive developments.  For example, it is encouraging to note that there has been a modest return of confidence in our industry and reports of modest growth in the number of transactions.  This confidence reflects such factors as improvements in the stock market, a brake on the rate of growth in unemployment and the stabilization of diamond prices.

While this news is encouraging, we still conduct our business in a challenging atmosphere (although not as perilous as we feared but a few short months ago).  While we have managed to survive, I am confident that all of us here today agree that survival is not enough.  We must collectively determine how we will return to a state in which we thrive. 

For us to return to a state of prosperity, America has to play a vital role as the engine that leads the entire industry.  Accounting for roughly half of diamond sales worldwide, America remains the largest consumer market for diamonds.  For the many thousands of jewelry stores throughout this country, diamond and diamond jewelry sales amount to half of their revenues. 

The New York market will play a crucial role in achieving recovery, since it serves as the gateway of diamonds coming into the United States.  Not only do these stones come to America via New York, they are often traded and re-traded here, particularly on 47th Street. 

New York is especially well-equipped to handle larger more expensive stones.  While the cost of cutting stones in this market is higher than in some other venues, this matters less with the more valuable diamonds.  Also, a manufacturer standing near a cutter can make quick decisions regarding such questions as to whether to decrease the size of a stone by eliminating an inclusion, a decision that can lead to improving clarity and value. 

New York also has the requisite infrastructure, such as manufacturers, banks and designers.  Many retailers prefer to make their purchases here due to the competition among wholesalers, competition that for retailers results in both better prices and a larger selection of goods.  In short, New York is a buyer’s market.

In the contemporary era, this market is no longer limited to face-to-face exchanges.  Many of the large diamonds sold in New York are also listed for sale on one or more diamond websites.  The websites include not only sites such as the DDC site www.nyddc.com that has hundreds of thousands of stones, and Rapnet, but also on the wholesalers’ private sites.  It is reasonable to believe that all the larger wholesale diamond houses advertise and list their diamonds on the internet.  Sometimes the diamonds are sold through the internet; other times they are not sold directly through the internet but are listed for sale and availability with the actual transactions remaining person to person.

To achieve our recovery, it is necessary that all segments of our industry be united by the goal of safeguarding our business and our mutual livelihood.  We must unite in our commitment to move ahead in a spirit of cooperation and not conflict; in a spirit of collaboration and not condemnation; in a spirit of coalition and not contention. Parenthetically, I must add that while we must work even harder to develop new strategies that are appropriate for dealing with our rapidly changing business, we must be ever mindful of the need to protect the integrity and reputation of our industry.  We must maintain proper and ethical business standards – standards that may be applied from the mine to the consumer – standards for which the Diamond Dealers Club and its members have been known since we were established in 1931. 

Our meeting is taking place but a day prior to the anniversary of the tragic attack that took place on September 11, 2001.  In the days and nights immediately following that horrific event, there was unimaginable fear and uncertainty in the American population in general, and, in particular, in those of us based in the New York metropolitan area.  Concomitantly, there was also an incredible unity that pervaded all segments of our population, a spirit of unity and togetherness that enabled us to not just survive, but also to thrive.

It is this unity, when combined with the perseverance and resilience for which our industry is well-known, that will enable us to not only overcome the difficulties we currently face but also facilitate our return to a period of economic prosperity.

My dear friends, while conspicuous consumption is clearly out for many Americans, the need for the emotional satisfaction and sustainable value associated with diamonds will help bring about the restoration of growth and prosperity to our industry. 47th street is ready to work with you to achieve these objectives. Today and in the days to come,  I look forward to meeting with all of my colleagues and friends to discuss how we may most effectively and efficiently achieve our shared goals.

Thank you.


 

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Tags: Banks, Jewelry, Mining Companies, United States
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