|
|
U.S. Wholesale
By Brian Bossetta
With the holidays wrapped, the views among diamond wholesalers on seasonal sales and the health of the industry were mixed. What seems clear, however, is that the 2013 season, while certainly not a boom, wasn’t a total bust either. “I was expecting the worst,” said Greg Telonis, president of Mr. Baguette, a manufacturer of small loose diamonds and jewelry in New York City. “But overall, though our sales were lower than in 2012, we did better than we expected.” December for Telonis, who deals mostly in special orders, was slower than in past years. “We’re very specialized,” he said. “And I did not have a lot of special orders.” What did move for Telonis across the board were diamond solitaire earrings and eternity bands. Nilesh Sheth, president of Nice Diamonds in New York City, had a similar take. Sales for the holiday season “were a little better than in 2012,” he said. “But the expectations were for a much stronger season.”
Looking ahead, Sheth and Telonis were optimistic. “I am expecting sales to spring forward with the arrival of milder temperatures,” Sheth said, adding that he has already received “good orders” from customers looking to replace what they sold during the holidays. Returning in January from his holiday break, Telonis said he was busier than he expected to be. Andrew Rickard, vice president of operations for RDI Diamonds, a wholesaler based in Rochester, New York, was happy with his holiday results. “We were pleased,” he said. “We had a good, solid year and are trending up.” Rounds, princess and cushions from VS2 to I1 in .75 carats to 1.50 carats sold well, Rickard said. “I think as long as there are steady increases in the economy, unless something crazy happens, I see continued progress,” he added. “Nothing dramatic, but a slow, steady climb.”
Sheth said seasonal prices were “stable to strong,” with most merchandise easy to replace. He attributes the stability in prices to mining companies controlling the flow of rough diamonds to prevent an overflooding of the market with merchandise. “It is to everyone’s benefit to have a stable to positive market,” he said. Sheth estimated prices were 4 percent to 6 percent higher in fall 2013 from summer 2013 and as much as 10 percent to 15 percent higher for lower-end merchandise. Rickard agreed with Sheth on prices and said inventory, for the most part, was also stable, with SI1 and SI2 and G through I — “the stuff everybody wants” — the hardest goods to replace. On the other hand, Morris Szklarski, president of Kelsol Diamond Company in New York City, was less cheerful. “I kept waiting for Santa Claus to show up, but he never did.” Szklarski said. “It wasn’t a very exciting season.” While Szklarski said prices held steady on SI goods, prices on higher-end goods — VVS and better — were not as strong. “The middle and upper middle class that historically wanted quality settled for cheaper goods because they are still fearful of the economy,” he said. “That’s not an issue for the wealthy.” But to Ami Koret, vice president of Davidoff Diamond Corporation in Houston, Texas, consumers were simply not in a buying mood, at least not for jewelry. “Maybe it’s all the mess in Washington, or layoffs, I’m just not sure,” he said. If there was one positive for Koret, it was diamond solitaire earrings. “That was one point of light,” he said.
Led off by the Chinese New Year on January 31, Szklarski said he was hopeful that a rise in Asian demand would boost business. Aside from that, Szklarski said business will either rise or fall based on the domestic and world economies. “I think things will improve as economic situations improve globally. We’re not insulated from that,” he said. Koret, however, who described himself as “an optimistic person,” retained an unenthusiastic outlook, even for the Chinese New Year. “I’m hearing luxury items are going down in the Far East,” he said. “I don’t expect anything great.” What might help pump the economy is the recent budget deal in Congress. “That is very positive,” Telonis said. “What I think is one of the most important factors to watch is the unemployment rate. If there’s high unemployment, then that’s going to negatively affect business. If people are fearful of their jobs, they are not going to buy jewelry.” “Certainly only good can come from progress in Washington,” Koret said. “But the feeling among consumers isn’t good. People are disgusted. I’m sure they are holding back on purchases.” In Rickard’s view, the Congressional budget deal, while a positive development, will not play a significant role in determining the direction business will take in 2014. “I think people are sick of being nervous and have moved past it,” he said. “They’re saying the world hasn’t ended.”Article from the Rapaport Magazine - February 2014. To subscribe click here.
|
|
|
|