Certs Vital to Sales

U.S. Wholesale

By Ricci Dipshan

Whether riding the momentum from the JCK Vegas show or trudging through what are typically slow summer months, wholesalers know that to survive in the domestic market, they need to offer a large selection of certified goods.
“I would say certifications are a very important aspect of what jewelers and consumers want when ordering a diamond,” explained Andrew Rickard, vice president of operations at the Rochester, New York–based loose diamond and jewelry manufacturer RDI Diamonds. “Fewer and fewer jewelers are willing to accept a diamond that is noncertified. The biggest question isn’t whether they want it certified, but more what certificate is required.”
As certain certification labs are more well known than others, the goods they certify are usually in high demand and harder to restock. “In the promotional and commercial goods, we have a strong inventory, which we are steadily replenishing. However, goods with Gemological Institute of America (GIA) certificates are a bit more difficult to replace,” noted Jay Gilbert, owner of the Los Angeles–based Coast Diamond, a manufacturer of fashion and bridal jewelry.

CERTS GO SMALLER

Overall, certificates usually are requested for larger, more expensive stones, “especially those larger than 1.50 carats in both round and fancy shapes,” said Greg Telonis, president of Mr. Baguette, a manufacturer of small, loose diamonds and jewelry in New York City. Recently, however, they are becoming increasingly important for less expensive stones. “Especially this summer, we are seeing more and more I1 and I2 stones being sold with certificates,” observed Gilbert.
   Certifications also are a staple in the bridal market. “Certificates are used quite often in center stone purchases,” said Telonis. “Occasionally, there are requests for certified stones in earrings or bracelets, but very infrequently.”
   Even with the use of certifications to attract sales, however, many wholesalers have found themselves at the mercy of an unusually unpredictable market this August — which, depending on whom one talks to, was a good thing or a bad thing.
   Some wholesalers, for example, saw a slowdown that was more pronounced than predicted. “The market has been the quietest we have seen for a while,” observed Ann S. Arnold, chief executive officer (CEO) of bridal wholesaler Lieberfarb, a manufacturer and designer of bridal jewelry in Rahway, New Jersey. “After a very positive JCK Vegas show, the market has gone into ‘sleep mode.’ The factors contributing to this would seem to be a combination of a good show where budgets were already spent, and typical election year conservatism.”
   Other wholesalers, however, saw a strikingly different market. “Sales over the past few weeks have been steady,” noted Rickard. “Those ordering are selling, so that’s a good sign.” Telonis’ situation was similar. “Sales for the past eight weeks have been moderate,” he said. “There is business to be made, but the requests are very specific.”
   A few wholesalers had an exceptionally strong August. “Considering that it’s summertime, sales have been surprisingly really strong,” said Gilbert. “This, I believe, is due to a combination of jewelers getting used to the strong prices and having the right goods.”
   In the bridal market “rounds for engagement rings and anniversary bands in G or H color that are up to one-third of a carat in size are selling well,” noted Arnold. And while “rounds continue to outsell fancies, fancies are gaining momentum,” said Rickard. Telonis confirmed this demand, noting that “Fancy shapes have remained popular, with cushions and radiants at the forefront, and baguettes and ovals in high demand.”
   Demand also is stemming from consumers who are on the lookout for unique jewelry pieces. “The handmade customized jewelry is still selling well for the retailers,” said Telonis.

PRICES

The price dynamics that started in July have continued on into August. “Prices for rounds have come down a few points, while princesses have increased,” noted Arnold. “Overall,” said Rickard, “fancy pricing remains higher based on limited supplies and increased demand.”
While softer round prices have been a staple in the market for most of the summer, their impact has not yet changed the selling habits of retailers. “When prices soared, almost all retailers lowered the quality they were selling by a full grade. They have not been raising the quality as prices go down,” observed Arnold.

PREDICTIONS

Though many in the industry are concerned about any instability the coming election might bring to the national economy, they are confident that the wholesale market will be resilient through the fall and winter seasons. “Despite the uncertainty in the upcoming elections, we are guardedly optimistic that it will be a stronger season than 2011,” said Gilbert.
A few also warn, however, against getting too comfortable with the decreasing prices on rounds this summer. If the market does stay steady, they predict prices are sure to increase. “Only a world crisis will create precipitous decreases in the price,” cautioned Telonis.