In regular times, wholesalers would have firmed up fourth-quarter plans by September. While some see a trickle of positive signs, many acknowledge that business remains tough. And few can predict what the end of the year will bring.
New York: Retail support
Buoyed by a “pretty good July,” Nilesh Sheth believes business is heading in the “right direction.” The president of Nice Diamonds — a manufacturer of fancy-colored and white diamonds in New York — acknowledged that it would take time, but pointed to positive signs of a market rebound. He cited “good movement” in center stones for engagement and wedding rings. Furthermore, given the limited new production coming out of India, prices are set to stay stable, which should also encourage sales.
“We are working with customers to make it easier for them to move merchandise,” Sheth pointed out. He has digitized most of his inventory, enabling retailers to sell without “having the product in their hand to show customers.” As part of those efforts, he has set up a server to share images and videos.
Given the economic climate, he advocates flexibility regarding terms. “Fortunately, I haven’t had to call anyone for payment. But I’ve also been very understanding if they’ve been closed,” he explained.
Sheth observed that independent retailers were making more of an effort to sell, even if the purchases occured online. But the majors are “still trying to figure it out,” hampered by the fact that some of their stores are in states hard hit by Covid-19, he said.
Attitude makes all the difference, according to Sheth. “The industry has proven to be resilient. There is always something positive to get us through the rough times.”
Chicago: Day-to-day
“Unprecedented” is how David Levine, owner of wholesaler William Levine Fine Jewels in Chicago, Illinois, succinctly described the diamond market — and it describes the overall economy as well.
“We’re open every day, but with a rotating staff. It’s not only for safety measures; the reality is that we don’t need more than a couple of people given current demand,” he elaborated.
While he observed some demand for engagement rings, he also noted that more and more people were buying them — and other jewelry — online “without walking [through] the front door of a jewelry store.” Companies with a strong online presence may have an “okay” year, he posited.
Levine pointed to dealers who were reluctant to ship goods because they knew they wouldn’t be paid. While he has not revised his memo policy for good customers, he admitted to being “extra cautious” and not taking new customers “unless they come highly recommended.”
“My sense is that business is literally day-to-day. People are scared. The recurrence of Covid-19 is still very much present and keeping people out of stores,” he said. “Until some comfort level returns, I think it will be difficult to count on a vibrant jewelry business. There are so many other things that are important — like survival.”
Los Angeles: Safety first
In Los Angeles, Christian Tse took a proactive stance. The owner and president of Christian Tse Design & Manufacturing closed operations even before California Governor Gavin Newsom mandated a shutdown.
“The chief financial officer and I conducted a risk/reward analysis,” explained Tse. “We took a conservative approach to safety for our highly skilled but older workforce.”
Recognizing the challenge of replacing these talented craftsmen and wanting to protect them and customers, Tse implemented an extensive safety plan. The company had already been sanitizing its jewelry-producing tools in UV ovens, and it expanded that practice to sanitizing finished pieces before shipping them to clients. It also mandated the daily cleaning of employees’ cell phones on entry and exit.
For greater protection, Tse invested in an air-purifying system, Air Scrubber Plus. First used in the International Space Station, it cleans surfaces and reduces indoor air-quality risks. During the shutdown, Tse also reconfigured the factory floor layout to allow for social distancing.
Tse counts many multinational brands among his clients. While orders have “dipped down” in the US for the winter holiday season, he anticipates that orders for 2021 will meet initial projections.
“Some of the ‘smarter brands’ reacted very quickly with Instagram and Facebook ads that drove sales to somewhat balance out lost in-store sales,” he reported.
Article from the Rapaport Magazine - September 2020. To subscribe click here.