JCK Brings Optimism

RAPAPORT… Retailers and diamond dealers ex-pressed a newfound positive mood at the JCK Las Vegas show, spreading hope among U.S. wholesale diamantaires. “There was a lot more traffic compared with last year and a lot more optimism from jewelers than last year. Clients were actively looking to grow their business. From chains to independents, everyone seemed eager to talk about ways of making money,” reported Andrew Rickard, vice president of operations at RDI Diamonds in Rochester, New York. “We were slammed. We expanded to two booths. We were so busy, we really needed it,” he stated.

Adam Mirzoeff, president of East Continental Gems in New York City, felt that “the attitude was one of the best things about the show. People were looking toward the future.”

Foreign Buyers

“The turnout that we had was good,” conceded Nilesh Sheth, president of New York City’s Nice Diamonds, though he cautioned that business had not yet returned to 2007 levels. “Sales were mostly from overseas buyers and some other exhibitors. Most retailers came to see what we have and they took notes. None of them wanted to invest much and I would not expect them to make a decision immediately. I don’t want to rush them,” he explained. JCK is vital to Nice Diamonds’ sales throughout the year, Sheth noted, because it is “the only place where the customer gets to see everything we have.”

Jai Bhansali, vice president of sales at Diagem, in Chicago, Illinois, also observed strong buying from outside the U.S., mainly from Southeast Asia. “The prices were strong and we’ve had a very good year to date. But I think foreign speculation is driving the market right now,” he warned. Bhansali has seen other wholesalers targeting emerging markets, but his focus remains here. “I really want to develop more in the U.S. because that is always going to be the first, defining market in the world.”

Enthusiasm

“It seems people were more enthused looking for diamonds and buying diamonds,” Moshe Salem, president of MS Diamonds and Jewelry in Los Angeles, acknowledged. “There’s still a long way to go. Certain elements still exist: consolidating companies, the internet, the lack of goods, the lack of understanding between worldwide and U.S. prices. These are the challenges. The recession is only one part of our problems,” he said. He summarized the show by stating, “I think the numbers are moderately better and the mood is much better.”

Price Concerns

Some were concerned that U.S. prices could be rising too quickly. Masciah Deil, president of New York’s Dylgem, commented, “The new prices that I see, maybe they are for the overseas market. The big question is: Should I pay these prices or wait? When I speak with my customers on the exchanges or the retailers, they say the stores are not selling so much. It’s very difficult to say what the real condition of the market is.”

Mirzoeff warned that conditions seem similar to the last time prices crashed. “Prices have come back with a fury, almost to the rate of two years ago. I’m in a ‘wait and see’ period,” he observed. However, Salem noted higher prices overseas. Calling the foreign market “a different business,” he said, “in the U.S., we are still in 2009 prices, but the world is in 2011 prices.”

Certain diamonds are proving to be a challenge to source, but Bhansali reasoned that items such as SI2 and lower clarities, fancy shapes that are “decent looking” and piqué goods are out there. “I think there are a lot of goods in the market, but the prices are high. If you are willing to pay the price, there are goods.” Rickard had similar issues with Gemological Institute of America (GIA) certified round diamonds in 0.50 carats to 1.50 carats, noting they were “hard to replace.”

For the rest of the year, “I’m hoping for less price resistance,” Bhansali stated. “For the summer, I see a little slowing while people settle into these prices.” Mirzoeff also anticipated the typical sluggish summertime sales. “I think we are headed into a slow period. But some people are chasing the overseas markets right now and that’s not going to slow down,” he added.

Salem predicted that “In the next couple of months, I think we will see growing interest, though it will be cautious.” Rickard expects sentiment to continue to improve. “I think you are going to see prices stabilize a little bit. I’m excited about summer and certainly the fall. People being more optimistic is a big, big thing. That’s a great sign.”

The Marketplace

• 1-carat diamonds from $1,500 to $2,000 wholesale are meeting good demand.
• Gemological Institute of America (GIA)-certified diamonds are hard to find and easy to sell.
• Promotional goods continue to increase in price.
• There is a moderate increase in interest in 4-carat to 6-carat diamonds.
• Most buyers are looking for bread-and-butter diamonds in SI clarities and G to I colors.
• Rounds are the most popular shape, followed by princesses, cushions and radiants.