In March, wholesalers worried whether their businesses would survive the pandemic; it was day by day. After months of adapting and innovating, they’re now looking ahead with cautious optimism.
New York: Price creep
Much to his relief, Lior Sofer has been very busy. Sofer, vice president of New York diamond manufacturer Beny Sofer, contrasted the situation with spring, when he sold a stone at cost and thought it was “a gift from above.”
Sourcing is his “biggest problem now,” he reported. While several of his Indian vendors have set up shop in New York, Sofer considers this stopgap solution “less beneficial than being there on the buying turf with a greater selection and more choices.”
He noted that “after the [price] list wars of the spring, prices went right back to where they were,” though he has seen prices on key items “creeping up” by several points. “If you have a finite amount of 2-caraters, you’re not going to dump them, because you won’t be able to replace them at a lower price.”
Sofer expressed doubt that the election of Joe Biden would impact the market. “As long as the Senate stays in Republican hands, I think people will feel comfortable,” he said (though control of the Senate was still undetermined as of press time). He predicted that Congress and the White House would work together for a bigger stimulus package.
Sofer expects strong Christmas sales driven by consumers’ need for “toys and gifts, and [by] women who thankfully love diamonds.”
Indeed, he stressed, “the market has proven to be very resilient even in difficult times. Look at 47th Street — it’s packed with people. You wouldn’t even know there’s a pandemic.”
Pittsburgh: Focus on service
“We’ve been busier than expected — even if our expectations were pretty low,” reported Girish Jain, owner of wholesaler Universal Diamonds in Pittsburgh, Pennsylvania. But he has observed a shift to one-off orders and memo calls rather than the typical combination of memo and selling for stock. While encouraged by some pre-holiday stock selling, Jain is transitioning to a “world that is much more service-oriented” because of the specific orders and calls he’s been getting.
Given that the company “prides itself on maintaining a strong inventory,” Jain has experienced minimal problems with shortages. However, it “definitely takes a lot longer” to produce something new. “On the flip side, customers have shown greater tolerance,” he added. “Pre-pandemic, something that would take up to six weeks to make might be a deal breaker.”
Engagement rings and purchases at the higher end of the dollar spectrum have been driving the business, which Jain does not see changing as a result of the election. While he anticipates some impact, he feels it will be determined more by what people think of the changes, rather than the changes themselves.
“In the short term, Covid-19 has accelerated the transition of being able to sell to a younger demographic through e-commerce and other digital platforms,” he said. “Those companies offering customization will do better post-pandemic. But the long-term effect will threaten the survival of those companies that continue to do business as they have for the last 30-plus years.”
Jain remained optimistic about the holiday season, declaring that “people intending to buy diamond jewelry for the holidays will find a way.”
Los Angeles: Hunting for stones
“Business is spotty,” said Larry Horowitz, owner of diamond manufacturer Gerson & Horowitz in Los Angeles, California. “It is quite common to have an extremely busy week followed by nothing the next week.”
Still, Horowitz has sensed that business is “returning to normalcy.” He cited a customer call for carat-sized, non-certified goods with nice makes, which indicated that the retailer was stocking up for Christmas.
However, there has been “no question” regarding the shortage of some diamonds. “Everyone is hunting,” he said. “I’ve gotten many calls from people I haven’t heard from in over a year because they need goods that their usual source can’t supply.”
Surprisingly, prices are still “fairly reasonable” in this scenario, he added — except for ovals, which are “very hot.”
The impact of the election will depend on the way Covid-19 is handled, according to Horowitz.
“A more extensive shutdown of business to stem the tide will obviously have an effect, because we’ll be closed,” he commented. “But that action could also result in slowing Covid-19, and then we could get back to work sooner.”
Article from the Rapaport Magazine - December 2020. To subscribe click here.