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U.S. Wholesale
By Joyce Kauf
With the holiday season rapidly approaching, most U.S. wholesalers are setting their sights on increased sales while keeping an ear tuned to the budget debates in Washington, D.C. Interviewed in mid-October, most agreed that the stalemate had not affected the market, but voiced concerns about its potential impact on the critical fourth-quarter holiday period. “Everyone has become a little immune to Washington because they’ve played so many games over the past 12 months,” said Nick Jain, vice president of sales at Paramount Gems, a jewelry manufacturer in New York City. “However, if the impasse looms longer, it will definitely influence consumer confidence.” Sales over the past two to three months have run the gamut, depending on the respective market segment. “Sales were excellent up to two weeks ago,” the same time as the government shutdown, explained Zion Maidi, owner of Daniella Design LLC, a diamond jewelry company in New York City. He attributes his company’s strong sales in part to his extending longer payment terms to his clients when necessary. Branding is another factor that he considers essential to successful sales. “If you don’t have a brand, you’re not in business,” he noted. Describing business as “decently healthy,” Jain said sales were “on par with 2012.” Bruno Scarselli, a partner at NBS Diamonds in New York City, known for its significant gems and collections, cited “very high demand for important diamonds — rare colors and rare sizes,” but noted that the market for 5 carats and under “is still weak.” At the other end of the spectrum, Jay Moskovitz, vice president of New York City–based Robert Moskovitz, a loose diamond wholesaler, pointed out, “Promotional goods are moving well in preparation for the holidays.”
“Surprisingly, we are selling more larger stones, 5 carats and up,” explained Ami Koret, vice president of Davidoff Diamond Corp, a jewelry company based in Houston, Texas. He added that H to J is popular in the U.S. “Rounds are doing very well and fancies are doing better than rounds,” according to Moskovitz, who noted that princesses, cushions and ovals in 1 carat and up in G to J are strong sellers. Jain pointed out that I1 goods are moving faster, as well as “collection colors” in D to H, while Maidi reported good sales in D to I in fancy shapes. SI goods remain strong across the board. “Colored diamonds are very, very strong,” said Sumeet Sethi, a director of Manak Jewels Inc., a diamond manufacturer in San Francisco specializing in colored diamonds and antique-cut white diamonds. While the market for yellow diamonds is strong, Sethi pointed to a growing demand for brown diamonds. “Every color is selling well from melee to 5 carats,” he added, noting that diamond slices also are moving well, continuing a trend that has been strong for the past few years.
“Manufacturers have lowered prices, which is going to help move the goods a little better,” said Jain, a comment that was echoed by Maidi. However, Moskovitz saw prices as steady, “without any crazy changes.” Scarselli saw suppliers “holding onto their prices.” He compared it to a “clock ticking second after second but when it comes to the hour, no one is willing to make a move.” As with sales, the availability of inventory was also dependent on the segment of the market served. “Buying is not as easy as it used to be. You can replace goods but not for the price you want,” noted Sethi. “Finding the goods we need now is definitely the biggest challenge,” said Jain. Yet Moskovitz indicated that he has had no problem in replacing goods. According to Maidi, fancy shapes are not hard to replace but only “fine, fine quality stones,” including the larger, emerald-cut stones. Scarselli explained that it is more difficult to find rare diamonds because of the fact that individuals or financial entities are looking at the stones for their investment value. To support his contention, he cited the “euphoria” in the marketplace looking to create a diamond investment fund.
“Of the 365 days in the year, it is only in the final quarter where you feel there is a lot going on in the market,” said Scarselli. While Jain was “cautiously optimistic,” most wholesalers expressed very positive sentiments about holiday sales. “The orders are already coming in,” said Sethi. While Koret noted that sales always seem to come “later and later each year,” he is adamant that customers “always step up to the plate” in the end. Maidi remains very enthusiastic about the holiday season. “Business won’t be good — it’ll be great!” he exclaimed.Article from the Rapaport Magazine - November 2013. To subscribe click here.
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