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U.S. Wholesale
By Joyce Kauf
As the countdown continues in the critical fourth quarter, U.S. wholesalers offered mixed opinions. Many took a guarded view, expressing caution rather than optimism about the all-important holiday season. “Moderate” was the most frequent description of sales over the past eight to twelve weeks. “There is still uncertainty in the market,” according to Abe Fastag, vice president of Ideal Brilliant Company, a New York City–based wholesaler. However, companies catering to specific market niches described sales in more positive terms. “Our business has been better-to-strong,” said Ian Levine, owner of Sylvie The Bridal Collection, a division of Spectrum Diamonds, based in Plano, Texas. The company has experienced steady demand for its diamond solitaire earrings and pendants. “Retailers are getting ready for gifts and they need stock,” Levine explained. “The high end is getting stronger,” noted Scott West, vice president of L. J. West Diamonds, a colored diamond wholesaler in New York City. He attributed it to a “newfound interest” in buying diamonds not just to wear, but as an asset, whether as an investment or a hedge against fluctuating currencies. “The reality is that a diamond is always in your possession. It’s transportable and it’s yours,” he pointed out.
“Everyday shapes — round, princess and cushion — from 1 carat to 3.99 carats in VS to SI are selling well,” said Fastag. Another New York City wholesaler who asked to remain anonymous noted that diamonds under 2 carats, G to I in SI were moving. Joseph Khafi, vice president and chief executive officer (CEO) of Diatraco Corporation in New York City, which specializes in colored diamonds, identified pinks and blues as his strong sellers. West concurred, also noting an increased interest in Argyle pinks. In the finished goods market, halos remain popular. “We are selling a lot of inside-out hoops and drop earrings with a center stone surrounded by a halo,” said Levine. “The 30-pointer to 60-pointer center stone is our sweet spot, but customers want up to 1-carat centers and larger in some cases.” Sales range in the H to I, SI2 to SI3 classifications, but G, SI1 also sells “reasonably well,” he added. Fastag observed that people want “very, very nice makes.” He explained that it is much easier to sell them, even given the higher price, than less expensive stones that are poorly cut. He attributed this trend in part to the internet, which provides easy access to learning about diamonds. “People approach buying from an educated angle now. They know exactly what they want.” Furthermore, he sees this behavior as influencing the way stones are being cut. “Customers know exactly what they want,” West agreed. “The market is soft for stones that are easier to find or duplicate.” Khafi echoed that sentiment when he said, “Customers want unique designs.” Fastag saw no price resistance, terming prices “stable.” Khafi pointed out that prices in fancy colors are holding steady, adding that “high auction prices are very positive for consumer and dealer interest.” Commenting that prices have fluctuated, the anonymous wholesaler described them as moderate, with some price resistance only on important goods. “If you have the money to buy, you can find what you need,” said Fastag. West found it harder to replace goods, while Khafi termed it “extremely difficult.” In contrast, Levine noted, “It is actually easier to replace goods.”
November’s Israel Diamond Week in New York City offered wholesalers an opportunity to buy. Sponsored jointly by the New York Diamond Dealers Club (DDC) and the Israel Diamond Exchange (IDE), it featured more than 100 companies and attracted over 600 members of their respective clubs, according to the DDC. One wholesaler who attended for only a short time observed, “People wanted to do serious business.” West went with the intent to buy, but only made “a few” purchases and voiced his concern about the increasing number of shows. “It seems like there is one every week,” he noted, explaining that it is becoming difficult to select which to attend. The show’s importance gained the attention of New York City Mayor Michael Bloomberg. He proclaimed November 11 to November 14 Israel Diamond Exchange and Diamond Dealers Club Week “in recognition of this important industry event and in appreciation for the professionals who keep our city’s ‘Diamond District’ thriving.”
The clock is ticking down on the holidays. “The season will be fine,” said Fastag. Another wholesaler noted that the holiday season would be okay, with the caveat that you need to have “very, very specific goods.” West cited the stock market’s strong performance, which was still setting records as of press time. While the market may encourage confidence, Khafi said it did not immediately translate into increased sales. He anticipated last-minute sales resulting in holiday volume that will be the same or slightly lower than 2012. Levine was upbeat. “The season for basic fashion jewelry and even for bridal is going to be strong. It is shaping up to be a better season than 2012 from a wholesale standpoint,” he concluded.Article from the Rapaport Magazine - December 2013. To subscribe click here.
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