Wholesalers of natural colored diamonds may offer differing assessments of current market sentiment, but they agree that these gems offer a unique selling proposition to the end consumer.
“People appreciate color. It gives them a range of choices and an alternative to white diamonds,” explained Sumeet Sethi, director of Manak Jewels, a wholesaler and manufacturer of colored and colorless diamonds in San Francisco, California. Sethi believes there is more interest in the market for color than for white diamonds.
Jose Batista, president of New York-based colored-diamond manufacturer Rio Diamond, described the market as “stable, but with acute challenges.”
More optimistically, Bhavik Gandhi, president of wholesaler and manufacturer Om Color Diamonds in New York, believes the market is “holding strong because of their rarity and value.” However, he said, each color category continues to perform differently.
Brown, champagne, grey
“Browns always sell,” said Sethi. As the most affordable natural color, the variety presents retailers with an opportunity to “showcase additional products without incurring a high risk,” he noted. He views browns as a good introduction to natural colored diamonds for the retail customer. They also generate more interest in the overall store display, he added.
However, Batista reported slow demand in this category, and Gandhi concurred. “The brown, champagne and cognac family is soft right now [in January] because it has been overly produced and overly advertised. It’s not going up, not going down, not going anywhere,” said Gandhi. Browns tend to get a bump in sales around Valentine’s Day, he noted, because they are often referred to as “chocolate diamonds,” capitalizing on the romance associated with the holiday.
Meanwhile, Sethi reported growing interest in greys, which he sees as an option for customers who cannot afford the more expensive blues. The limited inventory of greys adds to their desirability. But he stressed that “only the straight” greys — the nicer ones — were in demand, rather than the rustic and icy varieties.
Yellow
“We have seen a softening in price, which has created opportunities to buy,” explained Batista.
Gandhi observed that yellows were steady after a drop in price: “I think they will come back, because they offer very good value for the money right now. At some point, consumers will recognize now is the time to buy. I think we’ve seen the bottoming out of yellows in the market.”
Sethi felt that the price drop had spurred sales of higher-grade yellows. “People are not only looking more favorably at yellow diamonds, but they are willing to buy intense and vivid yellows,” he said.
Blue, pink, green
This category can be summed up succinctly: always desirable. Gandhi identified it as the strongest category of natural color diamonds. Yet Batista mentioned a caveat: “Prices are holding strong, but there is a bit of difficulty in finding the better-quality stones.”
The colors’ rarity makes them especially popular in the high-end market, said Sethi. “Prices always go up in this category, and these stones are always in scarce supply.”
Market dynamics
The market for natural colored diamonds is subject to the realities of a global economy. “We are in a disruptive time,” noted Batista, citing pressures such as import/export regulations. Gandhi, too, pointed out the economic and political uncertainties in the market. However, Sethi saw a silver lining: People might opt for distinctive stones, knowing they would appreciate in value.
Lab-grown colored diamonds are another potential influence on sales. “We’re entering the unknown,” commented Batista regarding De Beers’ new Lightbox synthetics brand. He thinks a market exists for both categories, and that lab-grown will impact neither the legitimacy nor the worth of natural colored diamonds.
Gandhi has also adopted a wait-and-see attitude, noting that people often buy blues and pinks for their investment value, which is “not the case with lab-grown.”
Nevertheless, wholesalers were optimistic. “Natural colored diamonds are more accessible than ever,” said Batista. “We have an opportunity to educate the consumer on the appearance of the actual diamond compared to the grading report.”
But the consumer’s perception of the stones’ worth may be the real bottom line. “Natural color diamonds are synonymous with value,” declared Sethi.
Article from the Rapaport Magazine - March 2019. To subscribe click here.