Wholesalers were hesitant to predict market sentiment given that they were still waiting for year-end 2019 sales at press time. But based on their experiences, most agreed that adaptation would be key for 2020.
New York: Amping up service
“We’ve hit the ground running and [are] shipping orders every day,” said Yosef Poplack, vice president of sales at New York-based diamond wholesaler Gem Wave Inc. “Prices have remained stable for goods we’re buying and selling. We’re positive for 2020, but the jury is still out on 2019.”
That said, he believes 2019 ended “decently on a positive note,” citing client calls for melee as late as December 20, 21 and 22. “At that date, they were definitely using them for last-minute jobs.”
Gem Wave did well with matched pairs in rounds and fancy cuts, as well as layouts, especially toward the end of the year, Poplack added.
“You need to be active the entire year,” he stated, emphasizing that “above and beyond” service was not something reserved solely for the holidays. “Our clients know what we can offer them all year round.”
Poplack predicted that lab-grown would remain a “big part” of the conversation in 2020. While he has attended several seminars about synthetic diamonds, he was adamant that these stones were “nothing that we will touch” and insisted that “natural is the way to go.”
As far as predictions for 2020, Poplack felt it was too early to tell. “Hopefully, the Jewelry International Show (JIS) Miami, Centurion and AGTA Tucson shows, among others, will give us some indication of market sentiment and what to look forward to this year.”
Boston: Facing reality
“Our expectations haven’t changed over the course of the last few years. We’ve been dealing with the reality of online purchases taking sales from brick and mortar or forcing them out of business entirely,” said Hilda Ozcan, owner of wholesale jewelry manufacturer Ozcan Jewelers Inc. in Boston, Massachusetts.
Ozcan has adapted by working more closely with existing clients, especially in the area of custom design, which she identified as a trend that “intensified” in 2019 and that she expects will continue
this year.
“We’re seeing more custom in both bridal and couture,” she said. “Very few people want to buy ready-made jewelry, but prefer one-of-a-kind pieces — and are willing to pay more.” Citing bridal as an example, she asserted that “customers either want to spend $5,000 or less for an engagement ring, or $20,000. There is no in between.”
Ozcan predicted that lab-grown would continue to make inroads with millennials. She advocates a two-pronged approach to countering lab-grown sales, beginning with using social media to reach out and educate millennials about natural diamonds. At the same time, she said, it is “crucial” for brick-and-mortar to offer more personalized services and communicate that to their customers.
But with instability in world politics and rising gold prices, she added, the market in 2020 will face more than the challenge of lab-grown.
Dallas: Margins declining
“No one is buying for stock. Everyone is requesting memo, memo, memo,” declared Gadi Spiro, president of wholesaler SJ Diamonds in Dallas, Texas. And that was only one of the upheavals he observed last year in what he described as a “very, very competitive” market.
Lab-grown became more of a factor, while e-tailers Blue Nile, James Allen and Rare Carat stepped up their game as more people shopped for diamonds online, he said. Still, Spiro predicted that the final numbers would show 2019 was a “pretty good” year overall.
Spiro’s particular area is specialty-cut side stones — trillion, trapezoid, half-moons — but demand has softened given the trend for bigger center stones.
“Five years ago, I would gear up for Christmas with an average of 200 matched pairs in these shapes,” he recalled. While he still sells side stones, he has “moved on” from specializing in specific items; he currently offers 10-point to 10-carat stones, with Gemological Institute of America (GIA) reports or uncertified.
“Like everyone else, we’re working on smaller margins but making up for that by increasing the volume of sales,” said Spiro, adding that “uncertified diamonds are selling better than GIA-certified diamonds, especially in larger sizes.”
Spiro anticipates a tough first half for 2020, what with the upcoming US presidential election, the Iran conflict, the China trade deal, and continuing demonstrations in Hong Kong. “Things need to quiet down before people will spend money on diamonds,” he said.
Article from the Rapaport Magazine - February 2020. To subscribe click here.