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U.S. Wholesale
By Ricci Dipshan
The momentum from June’s JCK Las Vegas Show is still prevalent in the wholesale market, creating a strong sales environment in the typically slow summer months. “Sales have picked up since June. Most of the customers have figured out what they want to stock for the season,” observed Nilesh Sheth, president of Nice Diamonds, New York City. “This period has been strong for us — I feel like retail stores are selling well and replacing inventory and I am confident that this will be a good year,” agreed Ian Levine, owner of Sylvie The Bridal Collection, a division of Spectrum Diamonds in Plano, Texas. While wholesalers are grateful for the upbeat sales environment, some also are worried that the slow speed of the U.S. economic recovery is inhibiting an even stronger showing. “The economy is not where I would like it to be yet,” noted Ami Koret, vice president of Davidoff Diamond Corp. in Houston, Texas. “But we feel the consumer’s mood is changing for the better, people are more positive about the future and, as a result, sales are steady with a slight increase.” The weakening Indian rupee and volatile Indian market, which is affecting much of the Asian trade, does not seem to have much effect on wholesalers in the U.S. “In America, I don’t believe we feel the issues that exist in India because our market does not depend solely on Indian suppliers,” said Greg Telonis, president of Mr. Baguette, a manufacturer of small, loose diamonds and jewelry in New York City. Wholesalers with more international business have seen some sales impact, but are not worried as they are primarily focused on the U.S. market and believe the situation in India will eventually improve. “We have seen some reduction in buyers coming from India but these people will come to terms with the new norms soon,” said Sheth.
In the current market, melee diamonds ranging in sizes from “10-pointers to 30-pointers in D to I colors and VVS to SI qualities have been selling well,” said Sheth. Other popular items, added Morris Szklarski, president of Kelsol Diamond Company in New York City, include “round, cushion and princess cuts over 1.25 carats in VS to SI qualities. Ovals, emeralds and Asscher cuts are selling well, too.” Wholesalers are noticing that retailers are becoming more receptive to their customers’ individual tastes. “Custom orders seem to be the strength of our orders rather than stock purchases,” said Telonis. “One overall trend in the diamond industry is that business is more and more demand driven, as opposed to supply driven,” agreed Szklarski.
“Fancy shapes are still selling well,” explained Koret, “because of the continuing price difference between rounds and fancies.” Indeed, prices are still going up on rounds, especially “in sizes ranging from .10 carats to .30 carats,” said Levine. The popularity of fancies, however, is making their prices rise as well. “The price of fancy shapes has definitely increased due to increased demand and lower supply, especially in finer qualities,” noted Telonis. The market’s price dynamics are also leading to a reduction in supply. “Prices have firmed up for polished diamonds in the past few weeks due to reduced manufacturing activities in recent months,” said Sheth. Specifically, “Supplies in melee stones from .16 carats to .30 carats have been harder to replace recently,” added Levine. These supply trends, however, have not yet reached the entire wholesale industry, as many companies do not have problems restocking their items. “At the moment, I cannot say that I have any difficulties in maintaining my inventory,” noted Szklarski.
Confident about a strong summer, wholesalers are predicting that the U.S. market will continue to improve throughout the remainder of 2013. “It seems that the economic slowdown of the past few years has started to roll back and the industry in the U.S. as a whole is feeling more confident. Retailers are showing willingness to stock more inventory and replace good-selling items immediately. I feel like 2013 is going to finish well with a strong season because consumers are starting to feel comfortable spending money again,” predicted Levine. Wholesalers, however, are still not expecting a return to a prerecession sales environment just yet. “As far as my predictions for the upcoming autumn and Christmas season, I believe it will be similar to 2012, in that the American consumers will be cautious in their spending and established, stronger companies will still do business while smaller ill-equipped businesses will suffer,” said Telonis.Article from the Rapaport Magazine - August 2013. To subscribe click here.
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