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Bargain Hunters Trickle Through Basel Show

Mar 29, 2009 1:41 PM   By Avi Krawitz
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RAPAPORT... Exhibitors were relieved to report a relative spike in traffic at the BaselWorld Watch and Jewellery Show on Sunday, after the first few days brought disappointing results. Reports from the event indicated mixed results for dealers so far. While there are serious buyers attending the event, they are asking for large discounts on goods, which some cash-strapped dealers have been willing to accept in the weak economic environment.

“Buyers are offering 20 percent less than what [sellers] are quoting, and the most disturbing thing about the market at the moment is that they are able to find dealers who need to move their goods and are therefore willing to sell at these prices,” said Yael Namdar, a director at Moshe Namdar & Co. She stressed that such prices do not reflect the general market and that larger companies are holding steady on their prices.

“There’s a lot of a negotiation going on,” added one market observer, who requested anonymity. “The market is trying to find its base level."

Most dealers who spoke with Rapaport News said that, given the weak market, they had kept their expectations low in the runup to BaselWorld, which helped soften the impact of a slow show. “We’re happy,” said Simon Zion, general manager at the New York office of Dehres Ltd. “We did better than expected. Not at the levels of last year, but we did okay.”

Jewelry Stronger Than Loose Stones

Zion noted that the jewelry segment at Basel was much stronger than the market for loose stones, which, he explained, indicated less wholesale-to-wholesale business activity this year. Among jewelry items, Zion reported healthy demand for pieces containing 3- to 5-carat diamonds. In terms of loose stones, there’s demand for the more commercial goods, he added.

Similarly, Namdar reported healthy demand for 3 carater and 4 to 5 grainers, as well as for stones below 1 carat. Others noted strong demand for 1 caraters, H colors, VS, VVS clarities, and a slight demand for sizeable stones of 5 carats and larger — in particular for 10 caraters, for which a shortage of supply has emerged.

While traffic has lagged far behind the record numbers of 2008, Zion reported that buyers who are attending this year are being very selective, coming with a specific shopping list of items they need. Eden Rachminov of Rachminov Diamonds 1891, which specializes in fancy color diamonds, noted a similar trend, adding that although traffic numbers are down, this year’s show has attracted more serious buyers who have reason to incur the high expense of attending the event. Rachminov reported that buyers are more focused on quality spending at Basel this year, and that there is a growing presence of private investment buyers in the fancy color market.

Expensive Show 

Organizers of the Basel show, which began on Thursday, March 26 and runs through Thursday, April 2, said they expected a lower buyer turnout due to the economic downturn. The recession impacted dealers' approaches to BaselWorld, which most agreed was a very expensive event to attend in these market conditions. Namdar said her company had considered cancelling its participation, but decided instead to cut down on expenses by choosing a location in a less-prominent position in the exhibition hall. Nevertheless, show organizers reported that 1,952 exhibitors from 45 countries took part in the event, down only slightly from the 2,087 who exhibited in 2008.

Some Positive Signs

Despite the difficult conditions and low buyer turnout, exhibitors reported a more positive mood in the market than was seen a month ago, as prices have started to stabilize and dealers are adapting to the new market environment. “The mood is generally down,but definitely improved compared to a month or two ago,” said Zion. “Most agree that the market has picked up in March.” “You get the feeling that the market is stabilizing,” added a market observer.

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Tags: Baselworld, Jewelry
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