Rapaport Magazine

U.S. Wholesale Market Report

Waiting for Holiday

By Ricci Dipshan
With the end-of-the-year holiday sales just around the corner,
the wholesale market has not yet settled into a single, consistent pattern. Many wholesalers report they are still experiencing wildly different sales environments. 

“Sales have been sluggish,” noted Jay Moskovitz, vice president of loose diamond wholesaler Robert Moskovitz Co. in New York City. “But this was mainly due to the Jewish holidays in September and October.” Likewise, Jack Abraham, president of New York City–based diamond
and gemstone jewelry wholesaler The Precious Collection, observed a
less-than-spectacular sales environment. “Sales are erratic because retailers are buying specifically what they need and nothing more,” Abraham said.

Other wholesalers, however, are experiencing the opposite. “July and August were abnormally slow, but September and October picked up very well,” said Amish Mehta, president of New York City–based loose diamond and jewelry manufacturer Amipi Inc.

A few wholesalers, while they have not yet seen a marked change in sales, reported they are optimistic about the market’s short-term prospects. “Sales have been steady, but we are expecting a better season from after-election spending,” predicted Nilesh Sheth, president of Nice Diamonds in
New York City.

Strong Sellers
Demand was strong for certain colored stones in October. “Yellow diamonds in large fancy shapes are selling well,” stated Ed Eleasian, vice president of Elie International, a New York City manufacturer of colored gemstone and diamond jewelry. Aside from yellows, “champagne and black colors in all sizes and shapes are in high demand as well,” said Sheth.

The most popular cuts in the market, noted Moskovitz “are rounds, cushions, princesses and ovals.” More often than not, these stones need to be certified to be sold. “Certified diamonds, especially those at the right price points, are hot items with almost all consumers these days,”
said Mehta.

Luckily for wholesalers, affluent consumers have shown a strong resilience by continuing to spend in the face of an uncertain national economic environment. “There is no slowdown in higher-end merchandise — indeed, that category has not slowed in 2012 at all,” said Sheth.

Prices Stabilize
While prices throughout the market softened following September’s
Hong Kong Jewellery and Gem Fair, they leveled out in October. “Prices stabilized after a weak spell that began just after the Hong Kong show,” observed Mehta. “We, too, have noticed a drop in prices and an anxious selling off of stock at the Hong Kong show, which seems to have abated now,” added Eleasian.

Whether this stabilization represents a lasting dynamic in the market is “difficult to answer with all the holidays that we had in October,” said Moskovitz. “However, we haven’t seen anyone giving away their stones — prices are still relatively firm for now.”

In the global perspective, “prices in America are lower than in the Far East, mainly because the overseas markets are fueled by international money, and economies that are growing faster than the U.S. economy,”
explained Abraham.

Wholesalers who stocked up over the summer are in a better position than most due to the difficulty of acquiring in-demand goods at reasonable prices. “We are lucky — we’re well stocked for the season. Overall, it is becoming harder to replace fast-moving items,” observed Sheth.

“Right now, there is no way to replace inventory because there is nothing available. And even if there is anything out there, it is too highly priced,” said Abraham, adding that the industry is cautious and “waiting to see in what direction the industry and economy are going after the election.”

Holiday Caution
Many wholesalers are predicting that consumers will remain cautious through the end of the year, but overall will moderately increase their 2012 holiday spending over 2011. “Our prediction is for a cautious season, many special orders, last-minute calls and growth around 3 percent to 4 percent over 2011,” said Eleasian.

There is, however, a pervasive wait-and-see attitude regarding the
end-of-the-year sales environment. “I think the diamond business will remain somewhat grounded till the elections are done with,” predicted Moskovitz. “Consumers are hesitating to spend money until they have
a clearer picture of which way the economy is heading. We are guardedly optimistic, however, that this holiday season will be better than that
of 2011.”

Article from the Rapaport Magazine - November 2012. To subscribe click here.

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