June’s JCK Las Vegas show provided wholesalers with a feel
for where the industry is and how it will fare in the coming months. Despite
the fact that they were all at the same show, wholesalers reported different
experiences and assessments of its success.
“Overall, traffic at the show was very light,” worried Ed
Eleasian, vice president of
Elie International, a New York City manufacturer of
colored gemstone and diamond jewelry. “The exhibitors outnumbered the buyers
two to one.”
Debbie Hakimian, vice president of marketing at fashion and
bridal jewelry wholesaler
Dove’s Jewelry Designs in Great Neck, New York, had
the opposite experience. “We had a very strong show — it improved over 2011. If
I’m looking at the show as an indicator for the year, I’m thinking it’s going
to be a good year to come.”
And then there were those who found the activity at the show
to be steady and predictable. “JCK was pretty much like the way the business is
outside of the show: some activity, yet not super busy, with buyers looking for
good value,” said Moshe Salem, president of the
Los Angeles–based M.S. Diamonds
and Jewelry.
STEADY TAILWINDS
Most wholesalers agreed that sales for May and June were up
year on year, though they offered different reasons for the gain. “We are
slightly up over 2011,” observed Oren Sofer, a partner at New York City–based
loose diamond and jewelry supplier Beny Sofer. “There is a clear sense that we
are working much harder, because retailers are cautious with their purchasing
and inventory levels.”
Other wholesalers attributed their success to the increasing
demand for bridal jewelry. “Our sales are very good — particularly, the
strength of our bridal line has been terrific,” noted
Jay Gilbert, owner of the
Los Angeles–based Coast Diamond, a manufacturer of fashion and bridal jewelry.
“Overall, retailers who are doing the best have really figured out which bridal
is selling well for them, and it’s on automatic reorder when they sell it.”
Some also reasoned that their sales increase was due to the
momentum coming off a successful JCK show, as well as anticipation for the
all-important end of the year. “Sales have been very strong, and this is a good
time of year for us because people get ready for the holiday season and the
Vegas show was great,” said Hakimian.
RISING PRICES
One thing wholesalers did not attribute their strong sales
to was any decrease in diamond prices. Indeed, prices have continued their
upward trend, with no sign of slowing down or reversing. “The prices overall
have increased between 5 percent and 7 percent,” observed Eleasian, adding that
“The price of melee dropped slightly, but it is still a lot higher than it was
in 2011.”
As has been true for some months now, much of the price rise
is focused on fancy shapes. “We have seen the most dramatic price increases in
fancy shapes, in particular cushions and princess cuts, with the sharpest
increases coming in the SI goods,” noted Sofer, adding that the reason for
these increases is that there are “real shortages of these goods in the
marketplace.”
Price increases, however, do not affect the market like they
once did. “As far as price resistance goes, I don’t see much of that,” said
Gilbert. “If it was all about
price, then the guy with the cheapest goods would always have the business, but
that’s not the case. Value is
something that sells — people are more quality conscious than ever.”
TRENDS
One dynamic in the current market is the demand for larger
jewelry items that do not strain budgets. “In general trends, in terms of
jewelry, people are looking for a bigger product at a lower price point,” said
Hakimian. Though many buyers know what size and price they want, they expect a
level of creativity from the designer and wholesaler in coming up with the
product. “They are asking for new things, but they can’t tell you what, so
ultimately, you have to run with what’s been successful,” noted Gilbert.
Colored diamonds are also continuing to be an in-demand
item. “I see a lot of people attracted to colored diamonds, while the white
diamond market has really slowed down. Two years ago, retailers would
come to us looking for white diamond pieces, but not any more,” declared
Hakimian.
CAUTIOUS OPTIMISM
Though many in the industry expect the coming months to be
steady, they also realize that there could still be rough times ahead. “There
are people doing well, but it’s not an easy business — a lot of our retailers
are doing decent, and while some of them are down, they still are okay,” said
Eleasian. “Everyone wants to do more, and everyone had expectations they would
be doing better by now, but economies don’t always cooperate.”
THE MARKETPLACE
- Bridal jewelry is strong, and demand is steady for
fancies, especially princesses and cushions, in sizes ranging from 1.5 carats
to 3 carats.
- Demand for rounds is strong in sizes up to 2 carats.
- Prices are up across the board, though they are increasing
faster on fancy cuts, especially cushions, princesses and emeralds, as well as
SI quality stones.
- Colored diamonds are in high demand, especially yellow and
brown stones.
Article from the Rapaport Magazine - July 2012. To subscribe click here.