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Hong Kong
By Mary Kavanagh
Fancy shapes are gaining a foothold in Hong Kong and Mainland China. “We’ve seen a lot of growth in the past 18 months in particular,” said Simon Zion, Dehres Ltd., which specializes in fancy shapes and colors. “Because of an oversupply in rounds and their prices coming down, more and more customers are turning to fancy shapes,” he said, adding that, in addition to the trend from rounds to fancies, he also is seeing a trend from smaller to larger stones. Dehres’ customers are predominantly retailers, not only in Hong Kong and China, but throughout Asia. “Fancy shapes are most popular for bracelets, necklaces and earrings in sizes ranging from pointers up to 2 carats to 3 carats. The most popular shapes for white goods are pear shapes, ovals and marquises,” Zion said, pointing out that square shapes are popular for fancy color diamonds.
A spokesperson for Leo Schachter Diamonds, a jewelry manufacturer and wholesaler, said that the company also has seen some growth in demand for fancy shapes — nothing dramatic, but a steady, healthy increase. “Fancy shapes are doing well — by well, I mean prices haven’t gone down. Rather, they have been stable and demand has been healthy,” the spokesperson said, noting the Hong Kong and China markets have traditionally been dominated by rounds. “Soft-edged fancies are more popular, such as cushion cuts, ovals and pear shapes,” he said, adding that they are mostly used by mid-high-end retailers in necklaces and earrings — where they are not the only stone — rather than in solitaires. He was optimistic about the continued growth for fancies. “I think as the market becomes more mature and more sophisticated, people are less afraid to move out of their comfort zone, which was the round stone.” Bespoke jeweler and designer Sally Ryder also has seen an increase in demand for fancies. Ryder, who has been making one-of-a-kind jewelry for her mostly expatriate clientele for over ten years, specializes in engagement rings. “Fancy shapes have been more popular than rounds over the past few months,” she said. “We’ve seen a lot of interest in step-cut diamonds, in particular Asscher and emerald cuts for white goods. Cushion and radiant cuts are most popular for fancy colored stones.”
Pricing appears to be one of the factors driving an increase in demand for fancy shapes. According to Zion, even though pricing for rounds has come down, they are still more expensive than fancy shapes. “There is still a big difference,” he said, “up to 40 percent, so people are turning to fancies.” The spokesperson for Leo Schachter reported that pricing of fancy shapes has held steady over the past six to eight months, whereas the price of rounds has gone down significantly. “Fancies have not been commoditized like the rounds have been. It’s easier to compare rounds from one supplier to the next and a 1 percent to 2 percent price difference can stop someone from buying,” he said. “Every fancy is different, the cut of the stone is unique, so it’s more difficult to compare.” Ryder also acknowledged “a huge discrepancy between the price of rounds and fancies,” but said that “All our clients choose a stone based on design rather than being price sensitive.”
There are mixed views from the market on availability of fancies. “Availability is tough. It’s getting harder and harder to find good stones, in particular VS and SI quality,” said Zion. As a result, Ryder said she has started sourcing from India and online. “I’ve been buying step cuts from Indian suppliers so this has opened me up to more supply. And these are more competitively priced than local stones,” she said. “Some of our dealers now have online inventory with photos and videos of their diamonds. It allows us to see great detail in the diamonds and is particularly good for fancy cuts so that you can see very clearly the shape of the stone, which is difficult to judge from just a certificate. This technology allows me to study stones thoroughly before buying.” Business for Ryder was “very strange” in the first quarter of 2015. “We had our worst month ever in February,” she said, “and we had our best month ever in March.” She attributed the boom in March partly to the unusually high number of big stones — 3 carats and above — sold. Business appeared to be normalizing in April with “more volume in standard sizing from 1 carat to 3 carats.” The retail market in Hong Kong continues to be challenging. Caroline Mak, head of the Hong Kong Retail Management Association (HKRMA), predicted an overall sales decline of between 5 percent and 8 percent year on year for March. “The prognosis for this year is not looking so great,” Zion said. “It’s going to be tough, but business is there and people want to spend and buy. They are more cautious, but still spending.”Article from the Rapaport Magazine - May 2015. To subscribe click here.
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