RAPAPORT... The verdict is in for the U.S. wholesale market, and it is not a pretty one: This past holiday was not one of the better ones in recent memory, which confirms many industry insiders’ suspicions and fears of a slower season. However, the silver lining in the storm cloud of holiday results may be that no one appears to have had a catastrophically bad season, just slower than last year.
“Overall, we had a good year,” said Dar Kurtz of Yehuda Diamond Co. “We went into the holidays optimistically, but I have to say it was a bit disappointing. However, January has been all right so far and we will continue to be optimistic about the coming months.”
Hemant Sanjay of AG Dia Jewels Inc. had a similar experience. “Christmas was okay, but it was definitely slower compared to last year. Business wasn’t as good as it could have been — it wasn’t great.”
Sanjay suspects that the overall U.S. economy had an impact on the buying patterns this past holiday. “The middle segment has been particularly sluggish, while the finer and larger stones are moving well, as are the commercial goods. It appears that the middle class is getting squeezed, while the two bookend classes were more willing to spend. Although the Wall Street bonuses were good for one segment, I think every single American would have to get a bonus in order for it to affect middle-class spending.”
Happily, not everyone had negative news to report. “Even though October was a bit of a hiccup for us, November and December came on strong and the year ended very well,” said Rick Finch of Don Conkey & Sons, Inc. “What helped us was our emphasis on quality and service. You start planting seeds in May and hope it pays off. This year, we had a lot of last-minute orders. Our bigger customers came through, and even though traffic was a little less this year, the average ticket price was higher, helping to make up the difference.”
Trends
The U.S. market is still experiencing some rather mixed trading activity, with a continuing emphasis on larger, better stones. However, reports indicate that availability of these diamonds may be beginning to grow. On the other end of the spectrum, basic American goods — G and H color and SI1 to I1 clarity — have been in demand, as have 80-pointers, 90-pointers, caraters and oversizes.
With regard to fancy shapes, bigger, fine-quality diamonds are still scarce, but demand may be down slightly. Princesses are flat, while pears and ovals continue to be healthy. Although emeralds and Asschers may have cooled down some, cushions are still getting calls. Marquises have become more popular, while the demand for hearts has gone in the opposite direction. Fancy colors have done respectable business, although nothing too spectacular.
GCAL Debuts New CertThe diamond industry got another diamond cert option this past January when the Gem Certification and Assurance Lab, Inc. (GCAL) introduced its new Ideal Cut diamond grading certificate at the JA Winter Show. According to GCAL, the Ideal Cut diamond cert is based on “triple ideal” parameters, in which the diamond ranks “excellent” in three ratings: proportion — girdle thickness and culet size; finish — polish and symmetry and direct light assessment — optical brilliance and optical symmetry.
“The GCAL Ideal Cut standard includes the traditional values of proportion and finish and adds a third dimension based on direct assessment optical light performance, which is perhaps one of the most useful descriptive and selling tools in today’s market,” stated Donald A. Palmieri, president of GCAL.
“With this new certificate, we were seeking to resolve the issue of the many revisions over the years to percentages and angles that have constituted the ‘theoretical’ ideal cut diamond,” he explained. “The changes have perhaps confused the many gemologists and diamond dealers using the ‘ideal’ term, and we are trying to add perhaps one of the most important analysis tools that can actually assist in selling the diamond. The GCAL Ideal Cut diamond certificate sets a standard for ideal cut diamonds that will generate higher confidence among buyers and sellers – as well as higher value, greater demand, and ultimately, greater sales and profits for jewelers.”
The Marketplace
• Trading activity remains mixed.
• Polished prices are uneven.
• Rough prices fluctuate.
• Bigger and better goods are in short supply.
• Goods 1 carat and below see pickup.
• Fancies are relatively stable.
• Fine, large fancies are still in strong demand.
• Princesses are somewhat flat.
• Pears and ovals hold steady.
• Fine-quality marquises are slightly more popular.
• Emeralds and Asschers are slower.
• Cushions see good demand.
• Hearts are soft.
• Fancy colors are healthy.
Article from the Rapaport Magazine - February 2007. To subscribe click here.