The summer is typically a slow period for wholesalers. But as with everything else, Covid-19 has upended the typical season, and suppliers are trying to regain sales they lost during the shutdown.
New York: Enhancing sales
“Even though it’s fairly quiet, we’ve never had so many orders for channel wedding rings,” said Aron Suna, president of New York-based manufacturer Suna Bros. He acknowledged it had been “challenging” after the 84-day shutdown — he kept count — as retailers tried to sell existing inventory.
With everything produced on site, setters and polishers were unable to work from home. But Suna took a proactive approach by enlisting other staff to develop informational and training videos for prestige clients, which tell the Suna story and highlight its offerings.
“We had 65 people on a half-hour Zoom call that took about three weeks to produce,” he recounted. He made modifications based on store feedback: “One client asked us to focus on our colored-stone jewelry, which led to some sales.”
Based on the success of those videos, he is developing one- and two-minute YouTube segments on colored stones that will be available on the company website.
To chronicle his time during the shutdown, Suna created a personal blog called Sheltering in Manhattan, which he also emailed to the staff of his retail clients. “I hoped that it would keep us top of mind with people who could recommend our products. I’m amazed at how many people responded so positively,” he said.
Philadelphia: Business survival
“We got flooded with business after the quarantine lifted,” said Larry Rosenberg, president of wholesaler Rosenberg Diamond Co. in Philadelphia, Pennsylvania. Yet the current demand doesn’t represent the “new future,” he cautioned; it’s just a temporary phase based on pent-up demand.
Rosenberg predicted there would be a shift once all those purchases were made. “Demand driven by people wanting to spend thousands of dollars for diamonds at the retail level will quiet down.”
He envisions a different economic scenario, with fewer diamond and commercial real-estate companies.
“Right now, the government is helicoptering money out the window,” he stated. “But unemployment benefits will run out, and mortgage payments will become due. Coupled with foreclosures, the demand for large retail or commercial spaces will decline.”
Rosenberg cited other factors relevant to the industry, including the rising price of gold.
“The price of diamonds will go up by default, because the dollar is worth less, and therefore you will need a lot more dollars to buy diamonds. They are still hard assets,” he elaborated. “As a result, there will be a lot of opportunities for dealers with the funds to buy liquidated goods. I want to be on the side of people who are looking to sell their merchandise so we can offer them a fair price.”
Los Angeles: Eye on inventory
“We’re keeping busy, and not only with our clients in California,” said Joseph Ladd, owner and president of Los Angeles-based wholesaler and manufacturer Ladd Diamonds. “We’re getting calls for goods from Florida and Texas and other states that have seen a surge in Covid-19.”
While sales from pent-up demand were welcome after the company’s several-month shutdown, Ladd voiced concern about a potential inventory shortage.
“We are selling, but we are not able to replace the items as fast as we would want,” he reported, citing the difficulty in obtaining stones from India and Israel. Ladd purchased goods from Israeli dealers just off the plane — albeit with some trepidation about the health risks of having them in the office. In a sign of the times, the traders had brought the goods with them, as Covid-19 restrictions had impacted shipping.
However, Ladd sees some short-term benefit to the lower availability. “This momentary gap might actually be a boost to move the glut of inventory we have. It may force us to trim inventory and become leaner by buying more selectively.”
But this possible silver lining comes with a caveat about prices. “If demand increases, the dealers will outbid each other to get the goods,” Ladd explained. However, even if demand slows, he thinks a price correction is unlikely.
“I don’t know what will happen,” he readily admitted. “But we’ve adjusted. We take every day as it comes.”
Article from the Rapaport Magazine - August 2020. To subscribe click here.