RAPAPORT... With the current global economy undergoing numerous transformations, Israeli diamantaires arrived at JCK this year hoping for the best, expecting a little less and ending up with a mixed bag. Overall, the 63 exhibitors who traveled to Las Vegas were more upbeat and reported better results than their U.S. counterparts, but a slowdown in traffic was widely noted across the board. Exhibitors estimated show traffic was down by 30 to 75 percent.
In a change from previous years, many transactions were made between dealers instead of with retailers, and the retail sales that did transpire were to return customers. Show visitors were willing to buy product — but only goods that they needed and only at very specific price points.
“People are not willing to pay prices easily, but if they really need it, they will pay,” said Yigal Hausman of Hausman Diamond Manufacturers. With the struggling U.S. economy, U.S. buyers were not as prominent this year as customers from the rapidly growing economies in Russia, the Far East and India. Diamond Imports General Manager Yair Peled brought loose diamonds to the show ranging in size from 0.30 to 3 carats and said that “Indians have strong buying power right now and they are coming and wiping us out” by buying all of his goods.
Big Stones RuleAs expected, big stones ruled the day, but sales of melee and goods smaller than 1 carat were also relatively brisk. Fancy colors also had a strong showing with black, in particular, finding its way into new jewelry designs.
Amnon Barak of Briza Color Diamonds, which specializes in color-enhanced natural diamonds, explained that “black is back” because it is a low-cost item to make. “When you put black and white together, even if the whites are low colors, they will look like collection colors as a result of the contrast against the black,” he said.
Winning StrategiesAlthough many companies reported mediocre results from the show, exhibitors who did well came prepared with a strategy. For those companies that failed to prepare in advance, sales were significantly down, including one major player who reported doing only 25 percent of 2007’s business.
Many small manufacturers described a strategy based on low price points. One manufacturer, who wished to remain anonymous, said he was selling more of his 0.50- to 1.75-carat goods this year than in the past, but that he was selling them at very small margins. “I’m not looking for the last penny,” he said. “If I have a profit, I will sell.”
Other small manufacturers, like Eitan Mor of Mor Brothers, reported that they increased their profits this year by moving into the Israel pavilion sponsored by the Israel Diamond Institute (IDI) and by scheduling appointments before the show. “We felt that there was tremendous movement in the pavilion,” said IDI Managing Director Eli Avidar. “Our diamond dealers were well prepared and they didn’t wait for clients to come to them.” The pavilion hosted 39 exhibitors this year, 14 more than in 2007.
Larger manufacturers, however, raised the bar for surviving in a struggling market. WDC’s Kenneth Friedman said that companies must be able to provide customers with pieces that demonstrate a “price-pointed, new dramatic look” adding that “If you don’t have the creativity — with a full-page ad brochure, trademark name and a look to match — it will be an issue.”
In line with this strategy, Dalumi, a Diamond Trading Company (DTC) sightholder, released three new collections at JCK – Ebony&Ivory, Fuego and Empress. Dalumi Jewelry Managing Director Vered Dalumi Itzchaki said the company introduces at least one new jewelry collection at every major show the company attends.
Many diamantaires see their results at JCK to be representative of a shaky American market, and some expressed doubt over whether they would return to the show in 2009. Others, however, are embracing a full-blown marketing strategy to capitalize on a less-crowded playing field — despite some concerns about new American customers being unable to make payments.
The majority of exhibitors, however, said they have no plans to abandon the American market, even as they have already diversified their efforts to include other parts of the world, especially the Far East.
IDI is prepared to help them. “In 2007, we shifted our focus to China, and 2008 will be the year of India,” Avidar said. “We wanted to signal to our industry that they should look to other parts of the world in terms of focus.”
The Marketplace• Big stones, as well as melee and goods smaller than 1 carat, had good movement at JCK.
• Even with price increases, demand for
8-carat+ stones is still strong and they are trading above or close to the Rapaport price list.
• 30- to 70-pointers are regaining their popularity, especially in the VS2+ clarities.
• Strong demand exists for 0.80 and 0.90 carats because of the much higher prices being charged for 1 carat.
• Demand from Hong Kong is driving movement of low colors in the 1- to 2-carat range.
• Fancy colors are in moderate demand.
• Demand is good for squares in small sizes from 0.10 to 0.90 carats and for all fancy shapes from 1-carat and larger.
Article from the Rapaport Magazine - July 2008. To subscribe click here.