U. S. Wholesale Market Report

RAPAPORT... Foot traffic was visibly down to even casual observers at JCK Las Vegas, but the show provides a compelling case study of conditions in the U.S. While many exhibitors claimed sales and traffic decreases in the range of 30 percent, select booths were crowded. Alternatively, many companies relied on clients of quality, not quantity.

Empty Aisles
When asked if the show met expectations, Dan Raz, sales manager at Pinto Diamonds in New York City, remarked, “Depends on where you set the bar. Compared to the last three years? Nothing close.” He noticed a lot less traffic but, happily, not much price resistance. Greg Kesten, sales manager at Jack Reiss in New York, commented, “It wasn’t gung ho. It wasn’t terrific, like Basel. But it was okay.”

“You could feel it,” observed Eran Wilheim, managing director of New York City’s Trapz. “Retailers have a lot of goods in their stores. They don’t have the passion or the need for new stuff. That’s the problem. Less attendance in stores. You can see it even in the big chains like Whitehall. I know a lot of buyers who were planning to come but didn’t.”

With all the negative news about the economy, at least no one was caught off guard. “Our expectations for the show were low, so they were met,” conceded David Pill, director of operations for Antwerp Diamond Distributors in New York. “Our primary purpose was not to sell merchandise, but to sell ourselves.”

Less Browsing
Asaf Herskovitz, president of GN Diamond in Philadelphia, Pennsylvania, asserted that the luxury show was “phenomenal” and the second and third days of JCK were also strong. “The name of the game is appointments,” he remarked. “Traffic was down, but people were buying.”

At Diagem, based in Chicago, Jai Bhansali, vice president of sales, recalled,
“Last year, we were used to seeing ten more people per day. It’s 25 percent down. But the people you meet are looking to do some business.” Rakesh Upadhyaya from Allied Creations in Los Angeles, noted, “There is no impulse buy right now. Those buyers have disappeared.”

Recession-proof Players
Moshe Klein, director of sales at Julius Klein in New York City, was
“extremely happy” with “brisk business” at the show. “Large goods are hard to find and we are in a very fortunate position as we have much in the way of a large stone inventory. We’ve always been known as specialists in these goods and our clients know that they can come to us for a fair market price. We are not buying or selling futures,” Klein explained.

Andrew Rickard, vice president of operations for RDI Diamonds in Rochester, New York, proclaimed, “We had a fabulous show. For us, it was very good. We’re pretty aggressive. You have to make your own success at the show. For us, the loose diamond market is fairly recession-proof.” RDI reports that sales are up more than 25 percent for the year. The company sells diamonds from one-quarter carat to 4 carats, but Rickard finds the majority of his business across the country is still in the 1-carat to 1.50-carat range. He conceded that his firm did a bit more entertaining this time around, but he didn’t feel that it was planned or that it made a vast difference in sales.

“You know, when the economy is strong, everyone makes money. But for us, no matter what the conditions are, you’ve got to make it work. You’ve got to get out there more, call more or do whatever it takes,” said Rickard. “In our business, pricing is all within the same ballpark. But your customers, they have to like you. When you call, they have to want to come to the phone. And my buyer’s job is to make sure we have the inventory. We are able to fill 90 percent of the orders we get every day. That’s very important.”

Christmas Unclear
Few were willing to proclaim that JCK has set the stage for the holidays, preferring to simply hope for the best in these uncertain times. “We can feel already that it is picking up a little bit. But as far as December, I don’t know,” said Wilheim. Those bold enough to venture an opinion were at opposite ends of the spectrum. Kesten warned, “Americans didn’t come or they didn’t buy, and that’s the way I see it for the rest of the year.”
Stanley Grossbard, president of Radiant Cut Diamond Corporation in New York, offered an upbeat interpretation. “I have a feeling they looked in their showcases and realized they didn’t need much. I suspect in the fall there will be activity.”

The Marketplace
• Buyers seeking D-F, VVS, triple EX and AGS ideal diamonds are  
  becoming open to goods as small as 1 carat.a
• Demand is slowing for VS2, while SI is picking up.
• D to G stones are meeting strong demand.
• Emerald cuts are slowly gaining popularity.
• There are increasing requests for high-quality 6- to 12-carat heart-shaped  
  stones.
• Micropavé looks continue to sell.
• 4-carat+ high-quality goods remain extremely strong.

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