Spurred by increasing sales of larger stones, the market has been upbeat. Business remained strong through the first quarter, and while suppliers couldn’t ignore inventory concerns, the overall sentiment remained positive.
New York: ‘A return to nostalgia’
Strong Valentine’s Day sales were a “good indicator that spending on jewelry is still very popular,” said David Rakower, president of New York-based manufacturer Joseph Asher Collection — especially considering that Valentine’s Day has not been a “jewelry holiday for a long time,” he added.
“Everything is selling across the board, from small 10-point studs up to 3- and 4-carat stones,” he reported. He attributed this to his focus on offering “very curated choices, with side-by-side selling of both natural and lab diamonds, [which] facilitates an easy discussion between our retail partners and their customers.”
As with most industries, Rakower sees a “return to nostalgia” in jewelry. “Classic is the ‘new it.’ Although customers like custom design, and there has been a knee-jerk reaction from millennials to redo everything to make it their own, there is a very strong current of classic styles reminiscent of the past.” And the trend began before the pandemic. “People feel good about the old times — even if they weren’t that great.”
He has not experienced a “real problem” in procuring inventory, “except for the general consensus that urgency is a canceled word.” The extended time frame for receiving goods is “not a big thing once people get past the New York minute and recognize that things take longer to produce.”
In recent years, he has “dramatically” reduced his participation in trade shows because the schedule of “almost a show a week became overwhelming.” However, Las Vegas remains a fixture on his calendar, and he has already signed up for August.
Miami: Large stones moving
“Bigger stones are moving well, and that’s a really good sign,” said Maximo Quinones, president of wholesaler DVG Diamonds in Miami, Florida. The overall market sentiment is positive, he reported — a welcome surprise from the pandemic-forced “tempering of expectations.” He noted sales of 3 carats and up, with ovals being the strongest shape, followed by elongated cushions and then rounds. Fashion jewelry is a “little softer,” as are sales of colored stones.
Quinones acknowledged that his company’s existing inventory had helped carry it through the pandemic, but said it still had to “work harder to source larger, well-made stones” to meet demand for SI1- and SI2-clarity goods.
“Tightness in inventory” continues to be a challenge, he said. “In terms of manufacturing, we’re not seeing many of the nicer SI material becoming available downstream to us. Business is picking up, and we need the goods to fulfill orders.”
He doesn’t depend on trade shows for restocking, however. “I have been able to source stones through other avenues that do not require my physically being at a show,” he explained, adding that “in the diamond business, as in other businesses, we have to find ways to adapt and change in response to the challenges around us. But within those challenges, we can also find great opportunities like the ones we saw in 2020.”
Chicago: Inconsistent inventory
“Demand is there. Brick-and-mortar is doing well. Pawnshop owners say they have no inventory,” said Ami Sarbagil of diamond manufacturer E.M Trading in Chicago, Illinois, citing reasons for his optimism. “People are expecting a stimulus that did wonders for the economy in the third and fourth quarters of last year. Tax returns are around the corner.”
He also cited a February New York Times article that reported a 10% jump in personal income during January. However, inventory shortages are also part of that reality. “It’s super difficult to get goods. Right now, prices are very strong,” he said, adding that demand was highest for oval and round, E- to G-color, SI diamonds of 1.50 to 2 carats.
Furthermore, he pointed to a “lack of consistency” in prices. “We can buy goods in the US and pay less than we would in India, which would not occur if production were steady.”
In his view, “the market is playing a game of cat-and-mouse. There are goods in the pipeline waiting to be shipped, but there is uncertainty [about] when they will hit the market.” As such, he is concerned about the impact of a “sudden flow of goods.”
He does not think sales of lab-grown will benefit from potential inventory shortages. “They can’t be ignored, but they’re just an add-on.”
As for trade shows, Sarbagil was “never a fan.” He prefers to pick up the phone and call his customers.
Article from the Rapaport Magazine - April 2021. To subscribe click here.