With the verdict on 2018 still out, some predicted a positive start to 2019. As of press time, several wholesalers were still expecting additional holiday orders.
New York: Strength in color
“Color diamonds have been a pretty strong category, with blue being the leader, followed by pink,” reported Bhavik Gandhi, president of Om Color Diamonds, a New York-based wholesaler and manufacturer that specializes in both natural fancy-color and white diamonds.
While demand for yellow diamonds has softened over the past six months, they still sell well, given their “greater availability and desirability in their price bracket,” he noted.
Colored diamonds have commanded strong prices across the board, from melee up to 1 carat. However, too often, people equate colored diamonds with auction-value stones and expect them to be worth more than they are, he warned.
Demand for bread-and-butter white diamonds — 0.5 to 25 points, F to I color, VS2 to SI2 clarity — is “always there,” he went on. But he added that “lab-grown diamonds have caused the lower end of the market to lose value, a trend that will continue.”
With holiday orders still coming in, Gandhi predicted that Christmas would be flat, or up by 10% to 20%. “We were ahead in the first half, and then we had
a slow summer,” he reflected.
He thinks 2019 will start on a positive note — especially “if global economic circumstances remain in control and all that is happening politically in the US settles down.” Yet he believes wholesalers will have to keep evolving. “If you don’t change with the times, you’ll be out,” he cautioned.
Houston: Keep testing
“Overall, business has been steady and better than 2017,” said Ankur Gandhi, marketing director at GDesign LLC, a wholesaler and manufacturer based in Houston, Texas. “We’ve seen good demand for a while; we’re hoping for a strong holiday.”
His top sellers include 1- to 2-carat diamonds in SI2 to I1, he noted. Most of his clients are independent jewelers in the southwestern states. Retailers in this part of the US often prefer stones in the J-to-K color range, he said.
He forecast that business would remain steady throughout December and continue into 2019. While he did not see any major economic issues affecting demand, he, too, cited the increasing prevalence of lab-grown diamonds as becoming more of a factor in the coming year. “Everyone in the industry is talking about lab-grown diamonds — and at the same time, our clients are asking for certification for every size of stone.”
San Diego: ‘No direction’
“It’s so close to Christmas, and I don’t see the normal business. I don’t think the market is healthy,” said Elan Nachassi, president of wholesaler and manufacturer House of Diamonds in San Diego, California.
“There is no direction in the market right now from the wholesale perspective,” he elaborated.
“Contributing to this is the fact that jewelers are struggling as well, especially in California, where the costs of running a business are especially high.”
As a result, jewelers have little to no liquidity and have to focus on selling items with larger margins, such as finished jewelry and colored stones,
he said.
Nachassi — whose business specializes in diamonds from melee up to 5 carats — acknowledged that the internet had taken a “bite out of jewelers’ loose-diamond sales.” But he suggested that it also presented an opportunity for jewelers to distinguish themselves.
“The way a diamond looks face-up is missing from the certificate,” he said. “Let the jeweler show the customer two diamonds — both triple Ex, both the same color and clarity — and point out the differences which aren’t reflected in the certificate, to create some doubt about which is the better stone. By poking holes in the certificate and helping the customer make a decision based on the appearance of the diamond and not solely based on the certificate, the jeweler can gain the customer’s trust and still make diamond sales.”
Nachassi also misses the strong relationships built over time between jeweler and wholesaler. “Previously, the jeweler would call me if he needed something, and we would work together. Now, before the jeweler calls me, he first goes to RapNet and looks for the cheapest stone. It’s understandable, because they need the greatest margin possible, but the wholesaler-retailer relationship suffers.”
Article from the Rapaport Magazine - December 2018. To subscribe click here.