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U.S. Wholesale
By Joyce Kauf
The end of the summer signals a shift in the mind-set of U.S. diamond wholesalers as they begin to turn their attention to what most agree will be a robust holiday selling season. Yet it is still a transition in progress. “Some people haven’t put their work hats on yet,” said Adam Mirzoeff, vice president of East Continental Gems, a New York City–based wholesaler, citing the September interruptions for Labor Day and the Jewish holidays. Although the summer months are generally slower, U.S. wholesalers reported that on average, sales were up compared to 2012. While some described sales as steady or better, Andrew Rickard, vice president of operations for RDI Diamonds, a wholesaler based in Rochester, New York, noted that his company’s sales have increased each month. “Sales are up 25 percent for the year,” he said. Wholesalers attributed increased sales to the improving economy and the subsequent positive attitudes toward jewelry buying. “There is a higher level of optimism among consumers,” explained Debbie Hakimian, vice president of marketing at Doves Jewelry, a jewelry design company located in Great Neck, a suburb of New York City. Amish Mehta, president of Amipi Inc., a wholesaler based in New York City, pointed out, “After a long time, retailers are saying good things again.”
“Price determines everything now,” explained Shakeel Japanwala, manager of the certified diamond division at C.D. Diam, a New York City jewelry firm, expressing a sentiment shared by most wholesalers. “Selling is easy if you have a good price. Everything is selling, from 70 pointers up to 3 carats,” Japanwala said, adding that H to L colors are performing well. “If it is at the right price point, all kinds of customers are calling and buying,” said Mehta, noting that certified stones in VS2 to SI2 are moving. Rickard saw more consistency in spending, especially for 2-carat to 4-carat diamonds. He said the standard F to I, .50-carat to .75-carat rounds are doing well, citing princess and cushions as “very strong.” According to Mirzoeff, the resistance to high total dollar value has lessened, and he added that 5-carat to 10-carat stones in “certain qualities” were selling well. He identified “uncommon items not readily available,” such as 4.50-carat SI1, as good sellers. While diamonds remain an important part of the company’s sales, Mirzoeff explained they have made a strategic shift into fancy colors as strong alternatives because they can be obtained at an affordable price without sacrificing quality. Even as Mirzoeff is exploring colored stones, Hakimian cited a return to white diamonds. “I think there is a strong push toward white diamonds as opposed to the colored diamonds that have reigned in the past few years,” she noted.
“Prices are falling. But even if retailers are happy with the price, they want to squeeze you more and more,” said Japanwala. Mehta estimated that prices have softened by about 2 percent to 3 percent. “We have not seen a significant price change over the past weeks,” said Mirzoeff, “but I certainly think that the market won’t warrant prices going any higher.” “Locating goods is easy,” says Rickard. However, given the steady demand for ovals, finding them is a “tough call right now.” Other stones that are harder to find now are 1-, 1.25-, 1.50- and 1.75-carat rounds, as well as 2 carats and larger, VS1 to VS2 and SI1. Sourcing high-quality precious and semiprecious goods has become harder, according to Hakimian. Mirzoeff’s emphasis is on finding stones that not everyone else can offer and he pointed out that the majority of the shortages are in F to G, VS in nice fancies and larger sizes. “We want to tell retailers that they shouldn’t pass up on this opportunity in fancies because we don’t know if we will get it again,” he said. “Going forward, I think there will be a shortage, especially in October and November, when we need goods for the season,” said Mehta, attributing it to the fact that it was not cost effective in recent months for manufacturers to produce the goods. “Come the end of December and January, we will have goods again.”
Most wholesalers are bullish on the upcoming holiday season. The drop in gold prices is also viewed as a positive sign for sales of diamond jewelry. “Getting a 2-carat stone for the price of a 1.50-carat diamond, and having it set in lower-cost gold, will make the customer very happy,” said Japanwala. “Barring any outside world factors, such as a war, there is no reason why the season will not be good,” said Mirzoeff. He pointed to promotions on social media, coupled with online purchases of fashion-oriented diamond jewelry and colored stones by both consumers and wholesalers, as a positive trend going into the holiday. “The holidays are going to be strong, strong,” Mehta emphatically asserted. “I am absolutely confident that this is going to be one of the strongest seasons in recent memory,” he predicted.Article from the Rapaport Magazine - October 2013. To subscribe click here.
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