Rapaport Magazine

Rapaport Magazine: U.S. Dealers Pessimistic for the Short-Term

By Shuan Sim
Diamantaires have either been reporting sales in recent months on par with 2015 or weaker year on year. The JCK Las Vegas show in June did little to alleviate the situation. Optimism is scarce among sellers as the industry moves into the summer months — typically marked by even slower activity compared to spring.

Status Quo
   “Business has been so-so, and with the economy not getting better, it’s been pretty much the same as 2015,” said Larry Kienzle, manager of Wholesale Diamond Consultants, a jeweler in Frederick, Maryland. While Kienzle felt that it has become harder to assess what the industry would be like moving forward, he was of the opinion that at least things would not worsen. Andrew Rickard, vice president of operations for RDI Diamonds, a manufacturer in Rochester, New York, commented that it has been a strange year. “Business in the past two months has been alright but things have been up and down. Sales have not been as consistent as they used to be in the past,” Rickard said.
   Many wholesalers concurred that buyers requesting discounts have become common these days, but confided that the price situation wasn’t too bad. “Discounts have definitely become part of the selling game,” pointed out Nick Jain, vice president of sales at Paramount Gems, a wholesaler in New York City. “It has been a bit of a struggle, but things have been okay,” he added. Many sellers experienced no inventory problems, but some wholesalers also reported that they have been restocking less.

Disappointing JCK Results
   “This JCK has been mediocre,” reflected Jain. He was glad that all his appointments showed up and that his sales at the show had been satisfactory, in line with his low expectations. Rickard was happy he managed to open new accounts, and noted that while traffic has been down at JCK each year, the show still has its purpose. “There are still buyers looking for stones to replicate their programs and for partners to fulfill them,” he said.
   Many manufacturers at JCK lamented that the confusing layout was not conducive for their clients finding them. Exhibitors at the Luxury show felt that the show has lost its exclusivity. “We pay extra for Luxury but in recent years they have been letting more wholesalers in,” said Raphael Maidi, owner of Maidi Corp., a jeweler in New York City. Jeff Glassman, chief strategic officer at Ron Rosen Jewelry, a jeweler in Stony Point, New York, added to that sentiment, “There’s nothing luxurious about Luxury anymore.”

Pessimism Ahead
   Short-term, wholesalers are expecting the summer months to be as quiet as they were in 2015. “It’s probably going to be status quo again,” said Kienzle. Others feel that in the long term, the diamond industry is headed for rocky waters. Some diamantaires expressed that consumers are simply not into diamond jewelry — spelling trouble for retailers. “People are getting married older and older, and when they do, they’re not buying the $20,000 ring,” said Neil Reiff, president of N. D. Reiff Company, a wholesaler in Philadelphia, Pennsylvania, adding that the allure of the diamond has been lost.
   Furthermore, according to Reiff, consumers have been overwhelmed with choices for diamond jewelry from the internet and that has led them to be merely shopping by price points. “You could have a consumer looking up a particular type of diamond online and then going into a retail store asking for that specific diamond with the online prices,” he said. He elaborated that the customers would have no idea why two diamonds with seemingly similar specifications could have different price points. “In this situation, how can we compete when consumers have a misleading idea of diamond prices? Is it my job to sell them the lowest-priced diamonds that I can?” he said. Reiff felt that unless consumers are educated about diamonds beyond price, everyone in the supply chain would be affected in the long run. Rickard agreed that the selling situation has become trickier. “It’s not the same old way of doing business anymore. You need to be adaptive to clients’ needs much more quickly. It takes a smarter businessperson to survive in the diamond industry today,” he concluded.

Article from the Rapaport Magazine - July 2016. To subscribe click here.

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Tags: Shuan Sim