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U.S. Wholesale
By Brian Bossetta
The first India Diamond Week at the Diamond Dealers Club (DDC) in New York City seems to have added a little life to the U.S. wholesale market in what has been by most accounts a slow summer. The event between the Gem and Jewellery Export Promotion Council (GJEPC) and the DDC, held in mid-August, provided the opportunity for an estimated 100 diamantaires from the two organizations to trade in person. Henry Desai, president of Bluerays, Inc., a diamond wholesaler and manufacturer in New York City, said the event was great for business. “Doing business here is more old school, face to face. I’ve already met 15 customers that I’ve sold to before but have never met,” Desai said. “You just can’t replace meeting someone in person with a phone call or email.”
Vinay Singh, founder of Richdiam, a diamond dealer and manufacturer based in New York City, said the Indian market, which has a significant impact on the U.S. market, has been quiet of late. But he felt the trading that occurred between Indian and New York dealers at the DDC “would help open up the India market” even more to U.S. wholesalers. “India is a major force for small goods but is now marketing larger goods directly in the U.S.,” said Ian Levine, owner of Sylvie The Bridal Collection, a division of Spectrum Diamonds, based in Plano, Texas. Although he described Indian dealers “as major players who can flood the market with goods and also purchase goods in large quantities,” Jay Moskovitz, vice president of loose diamond wholesaler Robert Moskovitz Co. in New York City, said the New York India Week will likely have little lasting effect on the overall U.S. market. Moskovitz said summer sales were lethargic and “people are more interested in vacationing than purchasing diamond jewelry.” This summer was slower than summer 2013, according to Shakeel Japanwala, manager of the certified diamond division at C.D. Diam in New York City. “Sales are down about 20 percent compared to last year,” Japanwala said. “People are not confident and are under pressure. Nobody is talking positive.” Levine described sales as stable, though he added, “I don’t think the market is hot.” The owner of a high-end diamond wholesale and manufacturing company in New York City, who wished to remain anonymous, also described sales as slower than summer 2013. “Things are very quiet, more so than last year,” the dealer said, adding that the “soft” Asian market and summer vacations were the major factors in the slowdown. However, demand for top-tier goods has grown, the dealer said. The improving economy, especially for wealthier customers who have benefited from the strengthening stock market, was the main reason behind the growing demand for higher-end goods, according to the dealer who asked to remain anonymous. “The wealthier are getting wealthier. And those who can afford it want VS through flawless,” he said.
Though dealers have been complaining for months about the price of rough — with three rough increases so far this year — the consensus among dealers now is that prices, for the most part, are holding steady. “Prices have been consistent since the beginning of the summer,” Moskovitz said, though most dealers still consider rough prices “too expensive” and think they need to come down. Singh said the current price of rough allows little margin for traders to make a profit. “Rough will come down,” Singh said. “It will have to. Then everyone will be happy.” Commercial goods, SI and VS, particularly in rounds in 1.5 carats to 2 carats, were moving well at the India Diamond Week, Desai said, despite some price resistance. But Desai remained positive for better sales going into the fall, believing that many customers are simply holding off buying until rough prices begin to drop. “Prices could start coming down in the next week or two and that could make a big difference,” he said in mid-August. “So I think many retailers are just waiting to see.” The wholesaler who wants to remain anonymous noted there have been more scarcities in the market than during previous summers. “It’s hard to find certain goods,” the dealer said, “particularly cushions, ovals, emeralds and Asscher cuts, between 10 carats and 20 carats.” Moskovitz noted that I1 in D through I were difficult to replace. Pointers, Levine said, have been a challenge to replace because they have increased in demand.
Dealers in the U.S. wholesale market also mentioned geopolitics as a factor negatively affecting business. “There is no question that global unrest affects the economy and most definitely filters down to our industry,” Moskovitz said. “Consumers still have an uneasy feeling when it comes to spending their money.” Levine expressed confidence in the stability of the U.S. wholesale market unless world hot spots, like Russia or Iraq, force the U.S. “into a bad situation.” And in a still-sluggish economy, Levine added, “consumers don’t have the money to spend indiscriminately on fine jewelry.”Article from the Rapaport Magazine - September 2014. To subscribe click here.
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