There may be pockets of optimism, but the lingering fear of Covid-19 and concern over continuing protests on the west coast are tempering market sentiment in the US. While the expected stimulus package will help, worries about inventory and increasing prices are clouding the horizon.
New York: Smart buying
Yoni Nitzani has been “buying aggressively” since January, propelled by “extremely good” sales at the end of 2020. The owner of New York-based wholesaler Polo Gem Co. advocates a strategy of strong inventory coupled with committed client partnerships.
However, he noted that buying had become more challenging since the end of the year, especially given the strong prices now. “It requires that much more time, energy and effort to ensure that we are screening and bringing in the right merchandise. Every day, we spend hours communicating with our manufacturing centers,” he explained.
“At the end of the day, you have to pay the premium for the nicest stones — but they sell,” he added, citing his “high selling ratio” with clients who are not into “nickel and diming prices.”
He has observed other changes in his business as well. “We went from being just a diamond dealer to doing wholesale, marketing and technology. We had to adopt new systems and techniques to stay updated with the latest technology and trends and to stay in constant touch with our clients.”
The stimulus package — under debate as of press time — is “fantastic” for our industry, stated Nitzani. “We live in a society where people like to spend, and this puts money in their pockets.” He believes Covid-19 is on the decline, and this has contributed to his outlook that “2021 will be a great year for the diamond industry.”
Boston: pandemic’s shadow
“The problem is not the industry — it’s Covid-19,” asserted Hilda Ozcan, owner of wholesale jewelry manufacturer Ozcan Jewelers Inc. in Boston, Massachusetts. “Whether people are sick or afraid of getting the virus, buying diamonds — with the exception of bridal — is not what people are thinking about right now.”
The coronavirus impacts every aspect of the business. Referencing rising diamond prices, Ozcan identified an “imbalance” between diamond supply and demand. Furthermore, the price of gold is “going so high that it is making everything less affordable.”
Production is another factor. With businesses having to operate at 50% capacity — or less — the additional time it takes to produce goods is “a challenge to both employer and employee.”
Covid-19 has also forced many jewelry retailers to go out of business, and others have chosen to retire. Ozcan believes that retailers with an online and social media presence have become “the new norm,” and that this is the way to survive the pandemic.
She hopes the new US administration will help move things in the right direction so “our lives become normal again.” However, that “feeling of safety” is inextricably tied to increased vaccination distribution.
“We all have to wait it out. We still have a long way to go. Staying healthy is the key,” she said.
Portland: Unrest and threats
In Portland, Oregon, Covid-19 is not the only critical factor. Since the end of May 2020, the city has been plagued by continued protests after the death of George Floyd. With the majority of downtown stores boarded up, Yossi Malka described the situation as “the Wild West.” The owner of Tel Aviv Diamond Company said “the wholesale trade has been substantially down due to the destruction of business.” While he has still been selling, business has been “sporadic and can’t be banked on going into the traditionally slower time of year.”
Malka does not think it matters who is in the White House; his concern is “the people running the state of Oregon and the city of Portland.” Secure on the sixth floor of an office building, he related that the unrest had hit close to home: His son’s jewelry store had been looted and destroyed.
Even amid the pandemic and protests, Portland remains a memo-driven business environment, Malka reported. “Even the most successful stores buy only on memo.”
Meanwhile, “diamonds have become a commodity. With Blue Nile and tech giants [like Amazon and Microsoft] in our backyard in Washington, there are a lot of tech-savvy people who go online to shop,” he went on. “I’ve been in this business in the same location for 41 years. Right now, I’m taking a wait-and-see attitude. But the only way for people like us may be to sell directly to the people. It just might happen.”
Article from the Rapaport Magazine - March 2021. To subscribe click here.