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U.S. Wholesale
By Ricci Dipshan
Optimism about the state of the diamond and jewelry market was pervasive among wholesalers coming off a strong showing at JCK Las Vegas. “The show went well for us,” noted Ed Eleasian, vice president of Elie International, a New York City manufacturer of colored gemstone and diamond jewelry. “Overall, the mood of the show was great. The traffic was lighter than the previous years, but most attendees were buyers, not lookers, which makes for a promising next few months.” Andrew Rickard, vice president of operations at the Rochester, New York–based loose diamond and jewelry manufacturer RDI Diamonds, had a similar experience. “We found the show to be excellent this year. Traffic was good and most importantly, buyers were prevalent. We sold both loose goods and finished goods in mostly ‘middle of the road’ quality.” Some wholesalers though, like Ann S. Arnold, chief executive officer (CEO) of bridal wholesaler Lieberfarb, a manufacturer and designer of bridal jewelry in Rahway, New Jersey, cautioned against being overly optimistic about the show’s effect on the market, especially in light of what happened in 2012. “This show was considerably stronger than others — however, the 2012 JCK Vegas show was strong too, but then business slowed considerably during the balance of the year,” stated Arnold. For now, however, the market is quickly gaining momentum. “Business over the past few weeks has been great. Daily orders of both stock and memo have been very consistent,” observed Rickard. The late spring and early summer months are also typically a strong period for wholesalers. “With the tax season being a distant memory to most consumers and the engagement season upon us, sales have been steadily increasing,” said Jay Moskovitz, vice president of loose diamond wholesaler Robert Moskovitz Co. in New York City.
Though overall sales volume is increasing, some wholesalers are lamenting that high prices are preventing their profits from growing at the same pace. “Sales have been very strong as compared to 2012, but margins are suffering because of the high prices in replacing goods,” warned Amish Mehta, president of New York City–based loose diamond and jewelry manufacturer Amipi Inc. Prices, however, while high, have not been fluctuating, and this stability is a welcome trend to many wholesalers. “Steady pricing is leading to less price resistance — more and more jewelers are adjusting to the higher prices,” explained Rickard. “Prices overall are high, however, price resistance is subsiding,” agreed Eleasian.
While round remains the most popular cut, “princess and cushion cuts are a close second, especially in sizes ranging from .50 carats to 1.50 carats in F to J colors and SI qualities,” noted Rickard. There also has been a surge in demand for fancy shapes. “We are finding that people are gravitating toward fancy shapes much more so than in previous years,” agreed Moskovitz, adding that most fancy shapes are difficult to replace in the current market. Specifically, “Princess cuts in sizes ranging from .75 carats to 1.50 carats, especially Gemological Institute of America (GIA)-certified stones, are in very limited supply right now,” said Rickard. The popularity of fancies is at least partly due to the fact that prices on round shapes are outpacing those on fancy shapes. “From my perspective, I would say it is definitely price driven,” explained Rickard. “The disparity between the round list and the fancy list has helped the resurgence of fancy shapes.” As a result of this high demand, market prices are higher for fancy shapes, “especially in ovals, pears, princesses and cushions,” Moskovitz said.
There are some wholesalers who consider the post-JCK show momentum a sign of good things to come. “I think the market is continuing to return to prerecession levels — buyers are back and consistency is there. Fear is more limited now, and we are pleased at the overall year-to-date sales,” Rickard. “The results of the JCK show clearly illustrated that the American economy — and with it independent jewelry retailers — are coming back stronger than ever,” agreed Mehta. “Our sales at the recent JCK show to independents were up by over 75 percent,” added Arnold. Many wholesalers are still cautious — although hopeful — to see if the dynamic holds in the months to come. “If post-Vegas doesn’t bomb out like it did in 2012, then we could see renewed confidence with retailers,” said Arnold.Article from the Rapaport Magazine - July 2013. To subscribe click here.
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