Rapaport Magazine

U.S. Wholesale Market Report

Colored Diamonds Strengthen Foothold

By Margo Leab
RAPAPORT...  Soaring prices and increasing demand for fancy colored diamonds are attracting more and more dealers to the table. Wholesalers with experience in selling the stones spoke to RDR about the possibilities in today’s marketplace. Many stressed that the most important aspect of success with colored diamonds is knowing your own unique clientele.

Lucrative Potential
East Continental Gems, a New York City–based company that launched in 1970, began working with colored diamonds in 1993. “We saw opportunities in cutting yellow diamonds. There were stones that were not cut to bring out their fancy color,” noted Adam Mirzoeff, vice president. Though competition in the sector has certainly increased in recent years, Mirzoeff welcomes it, stating that his firm believes competition is healthy for the business. Though he conceded to “short supplies of better stones in all areas,” Mirzoeff commented, “we travel and we see markets across the country and across the world…. Because of the crunch of supply in diamonds, and because people will always be looking for fashion, demand will remain strong. We also feel very strongly about the potential for colored gemstones such as rubies, emeralds and sapphires.”

Maidi Corp., launched in Manhattan 35 years ago, has specialized in fancy colored diamonds for more than 20 years in response to robust demand. Yellows are strong sellers, though Raphael Maidi, company president, also noted that more people are dealing in them now. Regardless of trends, he asserted, “The fancy color market is not going to go away, because of scarcity of stones and because the international market — Hong Kong, Dubai and Russia — will keep prices soaring.” The company specializes in bigger items, with sales in the range of $50,000 and up. Maidi added that mounted pieces are a growing part of his business.

About 25 to 30 percent of SES Creations’ business is in loose yellow stones and mounted pieces, with much of the jewelry sold as right-hand rings. Shlomo Elias, president of the New York City company, sees strong demand continuing for the foreseeable future. “Yellow has become more classic,” declared Lisa Valentini, director of public relations for the firm.

MK Diamonds, based in Los Angeles, California, strives to serve a broad range of consumers, many of whom have been an untapped market, according to the company. “Yellow diamonds have always sold, but a lot of consumers didn’t feel colored diamonds were attainable,” explained Linda Garrido, the company’s head of marketing. “We try to cater to that entry-level consumer as well as somebody looking for that extra special stone.” She reported that MK Diamonds does “exceptionally well” with pieces starting at $4,000 and ranging up to $300,000. Since the stones are cut to accentuate color and “not necessarily cut for shape,” Garrido believes the vendor’s hand-made pieces make a considerable difference in the final presentation. “It’s so fun. With the yellow, you really notice the details.”

Another firm that appears eager to offer value in the sector is Stuller, in Lafayette, Louisiana. Steven MacDiarmid, director of public relations, remarked that the company will offer pink diamond pavé pieces with rose gold “in response to trends that are developing.” Stanley Zale, a company vice president, confirmed that Stuller’s sales in small pinks from 2 points to 1/5 carat “took off well out of the gate” two years ago and that the company plans to continue offering them for the foreseeable future.

Browns Embraced
Punit Mehta, director of New York City’s Interjewel, has been dealing in brown stones from Rio Tinto’s Argyle mine since 1990. As consumers have embraced the stones, which are being marketed as champagne, chocolate and cognac, sales at the company have risen about 25 percent in the past year. At Dylgem, also based in Manhattan, Masciah Deil noticed a marked increase in requests for browns beginning in February. Mehta reported that the formerly overlooked shade is in demand from “pretty much every retailer.” For the mass market, melee is also moving well. “They want it because it is different,” he stated. Mehta expects consistent growth in the category for at least the next three years.

High Hopes
Despite a flood of newcomers threatening to crowd the field, vendors remain extremely upbeat about the prospects in this category. Many feel that with continued creative marketing, the sky is the limit. “There’s a lot of versatility at the consumer level,” asserted Garrido. Regarding demand, “We’ve just tapped the surface,” Maidi predicted.

The Marketplace
• Round and princess cuts are very popular.
• Journey and circle pendants have slowed.
• Browns are selling well in sizes from 1 point to 1 carat and above.
• Yellows in the 3- to 5-carat range are meeting strong demand.
• Pinks are moving rapidly.

Article from the Rapaport Magazine - April 2008. To subscribe click here.

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