With most of the country’s non-essential businesses remaining closed as of press time, wholesalers have many questions and few answers. Still, they see one glimmer of hope: engagement rings.
New York city: 9/11 comparison
From now on, everything will be viewed through the lens of “before and after COVID-19,” according to Eric Mor, president of New York City wholesaler Abe Mor Diamonds. But for the moment, the market is “at a standstill,” he said.
“I’m sure we’re doing what everyone else is right now — touching base with clients, organizing the office and analyzing which expenses can be trimmed,” continued Mor. “People just don’t know what is going to happen,” especially since there is no firm timetable as yet for non-essential businesses to resume operations.
Mor has been looking for some historical perspective to provide clues to the future. After 9/11, he noted, demand peaked for engagement rings. He hopes history will repeat itself on that score. “Maybe it is the psychological effect that after what seemed like the end of the world, couples who were on the fence about getting engaged decided to take the leap,” he reflected.
Mor believes people will still want to celebrate life’s milestones with diamonds and jewelry. He anticipates that online shopping will increase, possibly to the detriment of smaller independent jewelry stores.
Furthermore, he thinks customers — especially in the higher range — will be looking for value. “We will have to be laser-focused on the fact that diamonds have real value,” Mor stated. “We are waiting for the dust to settle. But at the end of the day, supply and demand will win out. The market is the market.”
Rochester, New York: Staying relevant
“This is a gut punch. There are no rules; we are trying to figure out how to operate,” said Andrew Rickard, vice president of operations at wholesaler RDI Diamonds in Rochester, New York. “We’re staying in contact with our customers and asking if we can help in any way.” He pointed to his company’s strong sales, even through early March.
Rickard and his salespeople are utilizing the time to introduce their new brand, Rare and Forever, which RDI launched in partnership with De Beers Group Industry Services. As the grading lab of De Beers, the latter will exclusively grade the Rare and Forever diamonds and assist RDI in various educational activities and sales training.
Acknowledging the complexity of current circumstances, Rickard highlighted the importance of encouraging clients to look ahead.
“I don’t want to be callous to the people who are suffering. Health and safety comes first. But you have to try to stay relevant to your customers,” he emphasized. “Life will be changed forever. But I think people will want to surround themselves with things that make them smile. Jewelry will remain an important part of people’s lives.”
People will still get engaged, Rickard pointed out. “If anything, COVID-19 strengthened that desire. Engagements are the foundation of bringing people together, and that’s the business most of us are in.”
Noting that it was likely to be months before business resumed, he said his company intended to try and bring back all furloughed employees.
“By and large, after 9/11, Americans figured out how to recover. We will bounce back from this, too,” said Rickard.
Fresno, California: Lower prices
Like the rest of the country, Nader Malakan is looking for some positive signs — research into a vaccine or a slight uptick in the stock market. The president of Malakan Diamond Company, a manufacturer in Fresno, California, he has been keeping in touch with his clients for several weeks. California curtailed non-essential businesses in mid-March, before many of the other states.
“There are no ands, ifs or buts — diamond prices will come down,” declared Nader. “It is all about supply and demand.”
Whenever the next auctions take place, rough prices will decrease by as much as 40%, he predicted, adding that
Online diamond sellers will have an advantage and gain even greater market share, according to Nader. As a result, brick-and-mortar will struggle even more.
“In the short term, it is hard to tell what will transpire,” he admitted. “But I think consumer confidence will gradually come back, perhaps in the next two to three quarters.”
Article from the Rapaport Magazine - May 2020. To subscribe click here.