Sales have ranged from good to steady to phenomenal, but wholesalers still voiced concern about the state of the industry.
New York: Prices up
“Demand is better than it was six months ago,” said Abe Fastag of Ideal Brilliant, a manufacturer and wholesaler based in New York. However, while sales have improved, he has found it difficult to get nice goods — those that are GIA-certified, D- to G-color, in the VS to SI range. Furthermore, he has seen prices increase by as much as 5% over the last six months.
A possible explanation, Fastag said, was that many stones didn’t even make it to the open market. “A lot of the goods are sold directly — whether from the syndicate
[De Beers and other producers] or very large sightholders — to the end users, who are not necessarily the retailers but the B2B [business-to-business] wholesale market itself.”
Fastag didn’t attend the JCK Las Vegas show. In response to De Beers’ Lightbox launch at the event, he acknowledged that synthetics were “scary,” but believed the impact would be felt mainly in the short term. The greater accessibility and affordability of lab-grown stones might ultimately be aspirational and encourage people to buy real diamonds.
“Since I’m not planning to the leave the industry, I’m trying to find a silver lining,” he said.
Dallas: Searching for value
The booming oil and gas economy in Dallas, Texas, has propelled business, according to Lance Shapiro, owner of Shapiro Diamonds, a local wholesaler and engagement-ring manufacturer. He has seen substantial demand for 2- to 4-carat diamonds.
“People are more than happy with H to J, VS2 to SI2 diamonds,” he reported, saying this was an indication that customers were searching for value. “Whether for a store or end user, the trend is all about value.”
While time constraints prevented Shapiro from attending JCK, he expressed concern that the industry’s “mystique” had been “sucked out of the business.”
“The excitement and camaraderie no longer exist. People are fighting tooth and nail every day for deals — whether on the wholesale or retail end or in between,” he elaborated.
Shapiro believes that De Beers, which fundamentally created the allure that built and sustained the business, has let the industry down.
“De Beers failed to train an entire generation of customers the way they did with the previous generation,” he argued, citing millennials’ lack of interest in diamonds.
Although he admitted he had not researched the company’s Lightbox offerings, he felt the launch of the new jewelry brand showed that De Beers had seen “the writing on the wall.”
Los Angeles: Large stones
“The good thing is that demand is steady,” said Joseph Ladd, owner and president of manufacturer Ladd Diamonds in Los Angeles, California. The summer months generally signal a slowdown in sales, he noted. “Customers have become a lot more selective.”
But he still “happily” sold several diamonds of 5 carats or more in fancy shapes and colors, especially yellow.
After attending JCK, his impression was that the industry was going through a transition. Prices are firming up in India, Belgium and Israel, creating a “momentary gap” in the price between the supplier and the wholesaler. “But,” he said, “wholesalers are resisting paying the new prices, because we still have all the inventory that we are trying to sell.”
He acknowledged the very real concern about chemical vapor deposition (CVD) diamonds entering the market and becoming more popular. He stressed the importance of Gemological Institute of America (GIA)-certified stones and recommended that jewelers get synthetics testers. The announcement that De Beers was getting into the market spurred discussions with other wholesalers, and the general consensus was cautiously optimistic.
“Hopefully, in the long run, the major gap in price between CVDs and diamond will be beneficial to selling diamonds,” said Ladd. “You would have to give your fiancée a natural certified diamond because the price of the CVD would be embarrassingly low.”
Article from the Rapaport Magazine - July 2018. To subscribe click here.