Whether it’s due to the stimulus or the stock market, sales continue to climb. Encouraged by demand, wholesalers are looking ahead with confidence and taking steps to build their businesses.
New York: Fancy arrangements
Greg Telonis could not have anticipated starting a company during a pandemic. But just prior to the outbreak of Covid-19, the president of New York-based wholesaler Mr. Baguette took a proactive approach that left his business “in much better shape” at the beginning of 2021 than in the pre-pandemic months of last year.
Concerned with supplier pricing and declining margins, Telonis renegotiated terms with overseas vendors in early 2020. “I attacked the problem before the pandemic started, and then when it hit, I had the right inventory and a lot of it,” he explained. He described a “spectacular flow between sales and money coming in and new product being purchased.”
Engagements have been driving sales of fancy-shape side stones, he said. “I can’t count how many trapezoids, half-moons and matching pairs we’ve sold.” Recognizing the demand for fancy shapes at a lower price point, he formed a partnership with two new suppliers to create Inter Fancies LLC, a company that addresses today’s market reality. “I created a cheaper version of myself with aggressive pricing. Not everyone in the market wants top quality. Retailers are so caught up in their margins that if you don’t come in at the right price, they overlook you.”
Telonis thinks the stock market, rather than the recent government stimulus packages, is the “sweet tooth” driving diamond sales. “The economy will continue to grow for about two years before we reach a new normal,” he predicted. “Everyone is just adapting to business and their circumstances now.”
Philadelphia: Quality first
“Business has been strong — more so than in prior years,” said Neil D. Reiff, president of wholesaler N.D. Reiff Company in Philadelphia, Pennsylvania. He attributed the increased sales to higher consumer demand for better-quality diamonds and jewelry, as well as fewer international diamond sellers traveling in the US.
Reiff’s niche of nice diamonds from 1.50 to 3 carats has gotten stronger. Although ovals were not selling well for many years, he has been unable to keep them in stock lately. The same has been true for radiants, which are becoming “the new oval.”
While acknowledging that it has been tougher to source nice diamonds, Reiff believes these diamonds are available — just “not at prices many buyers are willing to pay.” The fact is, he said, “discounts have narrowed, and market prices have increased above where they were prior to Covid-19.”
Reiff admitted to being “surprised” at the positive effect the original stimulus had on the jewelry business, but “intrigued” at how well expensive diamonds and jewelry had fared during the pandemic, when few had the opportunity to wear them out.
One recent change he observed was that internet companies were no longer “pursuing the insanity of trying to be the cheapest” and were now trying to turn a profit. “This is healthy for the industry.”
But for Reiff, trust and value remain integral to the business. “You have to make money to survive, but you need people to understand and appreciate the value of what you’re selling.”
Los Angeles: Technology focus
Even after multiple shutdowns, Christian Tse and his chief financial officer are sometimes “amazed” at how sales have surpassed projections, according to the owner and president of Christian Tse Design & Manufacturing in Los Angeles, California. For 2020’s last quarter and this year’s first quarter, Tse cited a “sales surge” of over 300% from multinational clients with US operations, as well as increased revenue from US-based clients. Pendants and earrings, which do not require sizing, are strong performers, he reported.
Online sales are driving the market, including at higher price points, he said. “The pandemic forced our clients to become more strategic in their marketing and merchandising via online and social media.”
The stimulus packages have also helped move product. Based on comments from family members working in jewelry retail, Tse said the government checks were definitely tied to a “spike in business.”
A strong advocate of technology, he said the pandemic had sharpened his focus on digital solutions. “Our goal is to cut the production lead time by one-third. Clients will go where they can get the goods. You’ve got the advantage if you can react quickly.”
In general, he added, “I always look at the big picture. You can’t think that you can do just one thing and you’ll stand out from the competition. You need to provide your client with multiple advantages.”
Article from the Rapaport Magazine - May 2021. To subscribe click here.