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U.S. Wholesale
By Ricci Dipshan
In the weeks since the close of the year-end holiday season, sales in the wholesale market were holding strong. “Sales have been steady,” noted Nilesh Sheth, president of Nice Diamonds in New York City. “Our customers have placed decent-size orders to fill the inventory that was depleted during Christmas.” Greg Telonis, president of Mr. Baguette, a manufacturer of small, loose diamonds and jewelry in New York City, saw a similar situation. “The sales for my past four weeks were good. I sold several larger-ticket items, and the dollar totals were healthy.” There is little doubt in the industry that the current demand is due to momentum from a “very strong closing in 2012 and an equally impressive opening in 2013,” said Amish Mehta, president of New York City–based loose diamond and jewelry manufacturer Amipi Inc. Some wholesalers, however, believe that while the current sales environment is favorable, it would have been even stronger if it had not been for the uncertainty created by the nation’s ongoing political impasse
in dealing with its spending, taxes and deficit. “Sales were better until the fiscal cliff,” said David Wiener, vice president of Harry Kotlar & Co., a Los Angeles–based manufacturer of platinum and diamond jewelry. “Now we’re looking straight down the cliff yet again.”
“The types of diamonds that were selling well in February were fancy shapes, especially cushion, Asscher, radiant and emerald cuts in 1.5-carat to 2.5-carat sizes,” observed Telonis. “In terms of color, G to I diamonds are popular,” added Sheth. In the bridal market, “engagement rings are doing well in 1-carat to 3-carat sizes,” noted Wiener, adding that “cushions are leading the pack, with rounds coming in second.” There is also increasing demand for natural colored diamonds, with “champagne and yellow colors the best sellers,” said Sheth. Another noticeable trend in the industry is the increasing demand for fashion jewelry. “The industry is becoming more and more fashion focused,” explained Debbie Hakimian, vice president of marketing at fashion and bridal jewelry wholesaler Dove’s Jewelry Designs in Great Neck, New York. “People’s jewelry goes with trends much like their clothing or accessories do. There is also a tremendous focus on what celebrities are wearing and the end consumer actually wants that same look.”
With the trend toward fair trade and ethically sourced goods, it is pivotal nowadays that wholesalers establish trusting relationships with their customers. “Most of our customers have known us for quite a few years so we generally don’t get asked about the ethical standards of our goods, but we do provide those guarantees if any new account asks,” said Sheth. Most retailers, however, demand only certificates with their goods without making any requests for other ethical assurances. “No one asks about ethically sourced diamonds, but certificate stones are often requested,” observed Telonis.
The price fluctuations from January are leveling off and leaving many wholesalers with high replacement costs. “Prices on rounds and fancies have been firm because replacement costs have not decreased — rather, they have increased on popular items,” said Telonis. “Retailers are having
a difficult time finding these items and are faced with calling many more wholesalers to meet their specific needs.” While the prices are high at the moment, there is some solace in the fact that they have finally stabilized. This comfort, however, may be short lived. “Prices are stable right now, but supply is being withheld, so I predict even higher prices in the coming months,” said Wiener. In this situation, companies that have stocked up since the holiday are in
a better position than others. “We’re well stocked for the season, which is great because it is difficult to replace popular items,” declared Sheth. Wholesalers with established relationships with suppliers will also fare better in the long run if prices keep firming up and stocks remain low. “There is low supply but being a well-known 65-year-old company has given us a great advantage compared to most diamond companies,” declared Wiener. Wholesalers are skeptical in predicting how the industry will fare in the spring and summer months, due to the level of uncertainty surrounding the global economy. “I believe our industry is influenced by the world’s economic factors,” explained Telonis. “As long as the U.S. economy and the euro debt crisis remain stable, consumer confidence will remain stable and our industry will maintain growth. If there are bad economic indicators, consumer confidence will be negatively affected and our industry will be stagnant or worse.”Article from the Rapaport Magazine - March 2013. To subscribe click here.
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