Many wholesalers felt that sales had been unremarkable in May and June, even as price resistance eased up a little. “Business has been average at best,” said Lalit Kumar Samdaria, managing director of Paramount Diamonds, Inc., a wholesaler in Los Angeles, California. He felt that while prices had been fair for him, sales were still not at satisfactory levels and that business has probably been about 10 percent lower compared to May and June 2016. Some sellers, however, did relish the improved situation from the start of the year. “Things are slow but it’s a bit better than in January through May,” commented Steve Eisen, secretary at Nat Eisen & Sons, Inc., wholesaler in New York City. He felt that the nature of the diamond industry has been slowly shifting over the past decade and much needs to be done to get the industry back to its heyday.
JCK CONCERNS
Diamantaires increasingly felt that the JCK Show in Las Vegas was not worth the trip. “The show was not so good, it was really slow,” said Vinay Gupta, owner of B G International Gems, Inc., wholesaler in Los Angeles, California. “Whether we went or not didn’t seem to make any difference. The prices of goods offered there weren’t anything special,” he elaborated.
Some others chose to give up going to the show completely. “We were not in the mood to go. It’s just not worth going anymore,” said Elisheva Raviv, office manager at Abe Abrahamoff Diamond Importers, Inc., based in Los Angeles, California. Eisen agreed, adding that he did not think the reward is quite there, especially considering the expenses needed for the trip and to establish a presence there.
EVOLVING INDUSTRY
Prices remain competitive, though many sellers, much to their relief, noted resistance to have eased off slightly compared to the start of 2017. Clients still ask for discounts, as always, but concerns about the quality of goods from Asia had given some bargaining power back to the traders. “There have been some concerns that some diamonds coming from Asia might be overgraded,” said Morris Szklarski, president of Kelsol Diamond Company, wholesaler in New York City. He gave an example that some SI-clarity goods could look like I-clarity goods, even with grading reports. “People are becoming critical about grading coming out of Asia, and customers are willing to pay more for goods that are what they’re supposed to be,” Szklarski explained. He added that many buyers have become accustomed to just relying on grading reports, given the prevalence of graded stones in the market. “Look at the goods, not just the paper,” Szklarski advised, and commented that competing with these potentially overgraded diamonds has been a problem over the past couple of years.
The rise of online trading platforms for wholesale diamonds has led wholesalers to be on their toes when pricing their goods. “Things have gotten more competitive as people are able to easily check prices online,” Raviv said. To survive, some companies have adjusted their business models, either shifting the amount of consignments or memos they take. Others choose to specialize. “We have a very narrow niche and we are very comfortable where we are,” said Gupta, whose business specializes in VVS and IF goods in I and J colors. He described going into this niche as a great payoff. Gupta elaborated that price resistance doesn’t affect him as much as his company is one of the few out there who can reliably meet requests. “We are not really competing with anybody except basically ourselves,” he said, adding that while specializing is good, it takes work to remain on top.
ROCKY TIMES AHEAD
Diamantaires don’t know what to make of the coming months but can only hope that it will be good. Sellers are glad that global shakeups in the diamond industry — such as India’s recent demonetization — barely made waves in the U.S., but there have been little signs in the U.S. economy that point to good times ahead. “Buyers are still only buying as they need. Now is the time for more diamond marketing to stimulate demand,” said Eisen. “Our industry needs consumer confidence and with the gloom that’s been on TV, it’s not giving people the pat on the back that they need to make them feel good,” he noted. Szklarski felt that a turnaround is overdue. “We haven’t had a decent season since 2007. I’m hoping it’s about time we had one,” he concluded.
Article from the Rapaport Magazine - July 2017. To subscribe click here.