Rapaport Magazine

Industry Divided About JCK

U.S. Wholesale Market Report

By Michael Washburn
RAPAPORT... After getting off to a somewhat quiet start on Friday, June 1, JCK Las Vegas quickly gained momentum over the weekend, as long-term customers showed up for appointments at vendors’ booths, and thousands of buyers flooded the show floor. Meeting salespeople face to face often meant having to fight one’s way through the crowds in front of the booths filling the Sands Expo.

Some Success

A number of vendors reported remarkable success. Sharon Aharoni, manager of the Alito collection for Philadelphia–based GN Diamond, said that her company met with strong demand for micropavé mountings, Alito stones and loose diamonds throughout the show. Patented Alito hexagon-cut diamonds with very slight inclusions, selling in the $500 to $2,000 range, were in demand among the many high-end customers who stopped by the spacious GN Diamond booth, with the result that “we exceeded our goals at JCK,” Aharoni said.

Nilesh Sheth, account executive for Nice Diamonds in New York, reported strong interest in rounds and princesses, 3-carat diamonds in the $5,000 range, as well as 1-carat stones in the $2,500 range. On-the-spot sales were less common than customers inquiring about diamonds and then following up with purchase orders after the show. Sheth mentioned that there was mild interest in the yellows and some of the smaller pinks in the company’s inventory of natural color diamonds.

In contrast to Aharoni, Guy Yosef, president of New York–based Ovadia Diamonds, reported strong demand from low- to middle-end customers whom he usually sees once a year at the show. Ovadia sold some pairs of heart-shaped diamonds on the first day, and its sales of bigger stones were consistently strong.

Large Stones, Big Sales

“It’s like real estate,” agreed Jacqui Ekstein, account executive for Eknam Diamonds, Inc., New York. Expanding on his comparison, he said, “The bigger apartments will sell, but the tiny ones are not selling.” In the diamond industry, he noted, “It’s more of a big-stone market right now.” Eknam’s rounds and princess cuts sold well throughout the show.

As useful as the show was for these vendors, it is wrong to think of the industry as being dependent upon JCK. “The costs of doing Vegas are so high, they didn’t work for us,” said Sam Frank, vice president of Leo Frank & Sons, a wholesaler based in Troy, Michigan. Frank and others who declined to attend JCK described the first week of June as a slow one for the industry, with few staffers present at the retail stores. Nonetheless, Frank reported that even without attending the show, pear shapes, radiants and emeralds have been selling very well, the bigger princess cuts have been moving and Asscher cuts have been doing all right. “We are getting a little more demand for marquises, which we were not getting a few months ago,” Frank added. Speaking more generally, he said that 3-carat-plus sales have been strong overall.

“We just never got into JCK,” said Jay Moskovitz, one of the principals of Robert Moskovitz Co. Diamonds in New York, “but we’re doing all right over here.” His company is selling large volumes of square cushions in the $800- to $1,300-per-carat range, and decent numbers of rounds and princesses. Moskovitz attributes his business’s success partly to the fact that “We have diamonds that are cheap, but for the money, they face up nicely.”

Such success counters the notion that as JCK goes, so goes the industry. Despite the positive comments from vendors like Aharoni, who went to Las Vegas, “The people making money at the JCK show are JCK,” said Frank, adding that “There are too many suppliers at JCK. It’s just gotten worse and worse.” Without a doubt, there were major issues of concern between the 400 vendors exhibiting at the Las Vegas Convention Center and JCK’s management (see the article “Going For Broke” on page 48).

Distress and Denial

Yet another perspective comes from Derek Parsons, president of the British Diamond Import Company in Fort Lauderdale, Florida. In the past, Parsons and his colleagues had never missed JCK Las Vegas, but this year, “We had zero appetite for the show.” In his view, “The diamond industry is in a state of distress and denial,” which events like this do nothing to mitigate. JCK and other magazines, Parsons said, have promoted a rosy view of the industry, lulling people into a sense of contentment and encouraging them to ignore serious problems, namely a supplier of choice strategy, advanced by De Beers, that has totally backfired on the industry, diamond prices forced too high by suppliers and cutters, and margins so small that they barely cover overhead for many diamond sellers.

The Marketplace

• Rounds and princess cuts were among top sellers at JCK.
• Micropavés remain popular.
• Demand for natural color diamonds was uneven at the show.
• Pear shapes, radiants and emeralds were also in demand.
• Cushions averaging $1,000 in value are selling decently.

Article from the Rapaport Magazine - July 2007. To subscribe click here.

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