RAPAPORT... If there’s one thing everybody seems to agree with regarding the JCK Las Vegas show, it’s that traffic was less this year compared to 2007. At the same time, those who came were there to do business.
Dave Lapa of Overseas Diamonds said that “There were clearly fewer visitors than during the previous edition, but the better-quality goods did very well. As far as the cheaper goods are concerned, sales were reported to be tougher, notably because retail jewelry turnover has gone down somewhere between 7 and 15 percent in the U.S.” André Gumuchdjian of A.V. Gumuchdjian went even further when he said, “The state of the U.S. market has deteriorated so much over the past years that even some U.S. exhibitors decided not to go through the expenditure and trouble of renting a booth, given that too few of their clients were planning to come.”
Marc Barber of B&R Worldwide Diamonds confirmed that “There were indeed fewer people around, but they were no tourists. They were there to buy. If there’s one thing that has not been good for us — diamantaires in general — it is the fact that, once more during JCK, two other related shows were taking place simultaneously. The consequence is that diamantaire exhibitors are spread among the three places, which tends to weaken to some extent the advantages of a single location.”
Despite his negative assessment of the overall U.S. market, Lapa admitted that “Vegas will remain an important show. I expect the weakness of the U.S. market to be offset by the growth that can already be felt in other areas of the world. However, I feel it’s important to say that, contrary to what is commonly believed, the U.S. is not suffering from a maturity crisis, but rather from the consequences of its current financial crisis. It’s not the first time that the U.S. has gone through difficult times, and it will recover.”
Rapaport Price List ImpactIf theVegas show is an important tool for assessing the U.S. market temperature, it also was where the sudden rise of the Rapaport price list confronted reality. The best that can be said is that people were less than thrilled.
The immediate impact, according to Barber, was that “Most deals for larger stones were suddenly stopped. Indeed, you need to understand that the bigger the stones, the longer the negotiations. Let’s say you’re in a given negotiation process for, say, two weeks, and you’re about to conclude the deal. If, for any reason, the prices should go up suddenly by 20 percent, you’re going to restart the negotiations. And that is in the best cases, when the buyer is still interested.”
AWDC Elections
The latest round of elections for the fledgling Antwerp World Diamond Centre (AWDC), the diamond sector umbrella organization, took place June 17 and 18. Freddy Hanard, AWDC chief executive officer (CEO), said he expects change but with a sense of continuity. “Our deepest hope is that the new board will help us move Antwerp farther along in the tracks that have been set up over the past two years, and that the new elected candidates will add their new ideas to move on.”
The core issue for the future of AWDC remains the practice by Antwerp legal authorities of seizing and holding the diamond inventories of companies being investigated for fraud. The practice basically puts the companies out of business during the period when fraud investigations are underway. Philip Claes, AWDC spokesman, said, “If we want Antwerp to remain as attractive as in the past, we have no options but to find a solution.”
Approximately 750 of Antwerp’s 1,800 diamond companies voted in the election. Companies cast votes based on their annual revenues, electing two representatives in each of three revenue categories.
The six new representatives elected to the AWDC board are:
• Ashit Mehta of Arjav Diamonds,
• Kaushik Mehta of Eurostar Diamond Traders,
• Mehul Kothari of Sushang Exports,
• Bharat Shah of Diampex,
• Mihir Mehta of Interjewel Europe and
• Sunil Kumar Shah of Pink Star.
Ashit Mehta and Kaushik Mehta will represent companies with turnover in excess of approximately $160 million. Mehul Kothari and Bharat Shah will represent companies with turnover between approximately $50 million and $160 million. And Mihir Mehta and Sunil Kumar Shah will represent companies with turnover between approximately $785,000 and $50 million.
In addition, the diamond bourses, which are entitled to three representatives on the 12-member board, announced they had chosen Jacky Roth, president of the AWDC board of directors, Freddy Inzlicht and Philippe Barsamian.
Two board members, who will represent the diamond manufacturing community, will be chosen in the near future. The twelfth — and final — board member will be chosen by an independent director.
The MarketplacePolished
• 1- to 10-caraters in all colors in SI1+ are moving very easily because there’s not enough supply to meet demand.
• For larger stones, there’s a wait-and-see attitude until the shock caused by Rap price increases is absorbed by the market.
Rough
• All suppliers have been increasing their prices by two-digit figures and pressure on business continues to build.
Article from the Rapaport Magazine - July 2008. To subscribe click here.