Rapaport Magazine

U.S. Retail Market Report

Colored Diamonds Find Niche

By Nancy Pier Sindt
RAPAPORT...  At first glance, natural color diamonds echo luxury products in general: The privileged few who have the taste and wherewithal to afford them aren’t overly concerned about the bad economy or market uncertainty. But interestingly, sales patterns of colored diamonds are a mixed bag. In some places, the demand has peaked; in others, they are an unknown entity. Buyers are often split between those wanting a big, impressive stone and those wanting a fashion item made of smaller stones.

By far, the most popular color is yellow, in the fancy to intense range, although good-quality light yellow diamonds are also in demand. Average sizes range from just over 1 carat up to 5 carats for single-stone pieces, but many retailers are noting healthy sales of smaller, total-weight items set with pink, yellow, blue (treated), champagne, cognac and black diamonds, the latter often used in faceted beads.

Pleasantly Surprised
Most retailers reported steady sales in all jewelry categories, despite the faltering economy. Even with the exciting potential of natural color diamonds, however, there was another point of agreement: The overwhelming demand is for white diamonds, the bigger, the better.

“Customers are willing to go for something different if it’s really different, but otherwise they want tried and true,” observed Kathy Zaltas, owner of Zaltas Gallery, Mamaroneck, New York. Maria O’Rourke, Montica Jewelers, Coral Gables, Florida, agreed. “Our customers want bigger sizes in white diamonds; they still like the all-white look of a diamond in white gold or platinum.”

The same is true in Beverly Hills, reported Philip Press, owner of Philip Press Jewelers. Press said many of his clients now are opting for smaller, but better-quality diamonds, both in white and in color.

Colored diamonds are not overly popular with the conservative audience in Boston, noted Tyler DeScenza, diamond buyer for DeScenza Jewelers, although he has sold some fancy yellows and pinks. “Most younger people don’t understand what colored diamonds are. It’s usually an older customer who already has a white diamond engagement ring and can afford a bigger diamond.”

In other stores, however, color is a big attraction. At Sissy’s Log Cabin, Pine Bluff, Arkansas, customers buy stackable colored diamond bands as Sweet 16 gifts. “They start with black and white diamond bands, add blue and pink, one at a time, building a wardrobe of rings,” said Sissy Jones. The immediate future will most likely bring more sales of colored diamond jewelry. Recently, a representative from a local bank toted in the contents of an estate lockbox filled with more than $1 million worth of important white and colored diamond jewelry, including one necklace with a large pink center stone.

Three-Stone Leads
In terms of jewelry pieces using colored diamonds, the hands-down volume leader is a three-stone ring with a radiant-cut yellow center flanked by white diamonds. Joe Cimino, salesman at Merry Richards Jewelers, Oakbrook and Glenview, Illinois, said his best-selling colored diamonds are three-stone rings with fancy-to-intense yellows in the 1.25- to 1.50-carat range, retailing from $11,000 to $15,000.

We love color and it has been important to us for some time,” said Lucian Lee, owner of Hale’s Jewelers, Greenville, South Carolina. He said most sales are of fancy yellow diamonds in the 3- to 5-carat size, most often in a three-stone ring with whites at the sides. Also successful are designer styles incorporating both pink and yellow diamonds in smaller sizes. “For $10,000, you can buy a piece with a reasonably nice size and a vintage look,” Lee said.

That is also a trend at Zaltas. “People like color as part of another ring,” noted the store’s owner. Popular here are designer pieces with 5- to 10-point pink diamonds in pink gold accented with pink pearls; cognac diamonds in yellow gold and fringe earrings with black diamond beads. Blacks and cognacs are “very big in fashion jewelry, such as earrings and stackable rings in the $3,000 to $8,000 range,” said Kathy Zaltas.

In colored diamond sales, Classis Designs, Glendale, California, sells mostly yellow and pink diamonds from 1 to 3 carats. Popular items include rings, pendants and earrings in the $3,000 to $15,000 range.

At the top end of the market, at deBoulle Jewelers in Dallas, the popular look also is three-stone rings, with large fancy yellow centers in intense to vivid shades that can retail from $150,000 to $500,000. Interestingly, for some customers who don’t want to make a statement about wealth, a three-stone ring centered by a 3- to 4-carat blue diamond is more desirable than the blinding dazzle of a 20-carat white center, according to deBoulle president Jeffrey Bartley.

The Marketplace
• Most popular color is yellow, most popular sizes are 2 to 5 carats and
  preferred quality is fancy to fancy intense.
• Best-selling colored diamond categories: rings, followed by pendants and
• Best-selling colored diamond item: three-stone ring with a colored center.
• Other popular items: pavé stack rings, black diamond beads and
  multicolored designs.

Article from the Rapaport Magazine - April 2008. To subscribe click here.

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