RAPAPORT… It’s almost as if wholesalers want to say, “Pinch me.” Sales have been so consistent and strong since January that they’re comparing it to Christmas. Even as inventory prices keep rising, they are savoring this welcome sales streak — for now.
New York: big business
“We’re breaking records every month,” said Yoni Nitzani, owner of wholesaler Polo Gem Co. in New York. “Every month has been like Christmastime.” In fact, there have been “dramatic” monthly sales increases, he reported.
A shift to big sizes has been driving his business. While a 1- to 2-carat diamond used to be the norm, 4, 5, or 6 carats are now “easy to sell,” Nitzani said. Large matched pairs for studs weighing a total of 4 carats and up are “super strong,” he added, and large fancies are also in demand. Observing a trend for elongated stones, he noted that they were selling across the board in all sizes and categories.
However, buying has been “very challenging, with difficult pricing.” Rounds have been “super, super expensive,” said Nitzani, who is still purchasing “aggressively, even though it requires much more work and effort on the ground with our buyers overseas.” It’s not for lack of goods, he explained. “The supply is there; overseas manufacturers are working full force. It’s a price issue.” And even with excellent sales, margins are lean.
While his hopes for 2021 were high, he stressed that this period of accelerated consumer buying was “not the new norm in the fine-jewelry industry.”
“You can’t build a business based on these numbers,” he said. “I hope I’m wrong, but I think we all know this is not going to last forever.”
Rochester: strong across the board
Andrew Rickard succinctly summed up current demand in one word: “unprecedented.” Rickard, vice president of operations at wholesaler RDI Diamonds in Rochester, New York, cited “the best February, the best March and the best April” in the 20-plus years he had been with the company.
The “easing of requirements around wedding ceremonies” has fueled a boom in engagements, according to Rickard. Many people with disposable income are upgrading their jewelry and making larger purchases as well, he added.
He noted strong business across the board, without “any category underperforming too dramatically.” Rounds were selling well, he observed, and fancies were strong: Ovals and elongated radiants were “hot,” emeralds were “bouncing back” and there was even some demand for marquise and pear shapes.
Yet Rickard was a “little skeptical” about the long term. He had already seen significant price increases, and anticipated “inventory challenges for the remainder of 2021.” The crisis in India has exacerbated the situation and will “trickle and translate for our industry.”
Still, he remained cautiously optimistic about the rest of the year and saw opportunities “with not a lot of barriers.” His strategy consists mainly of “staying in front of clients, opening new doors and helping where we can.” Indeed, he said, “our biggest issue today is inventory — fulfilling orders versus finding orders. That’s a good problem to have.”
Los Angeles: Paying a little more
“The greatest surprise over the last several months is that we expected doom and gloom, but our business is stronger and inventory prices have kept their value — the opposite of what we feared,” said Joseph Ladd, owner and president of wholesaler and manufacturer Ladd Diamonds in Los Angeles, California.
“Now the biggest issue is the difficulty in replacing the same item we sold. We have to buy it at close to the price we sold it for or even a little below,” he explained. Rather than “haggling over a couple of percentage points,” he prefers to “pay a little more for the stone just to have it in inventory.”
This article was first published in the June 2021 issue of Rapaport Magazine.
Image: A diamond ring. (Shutterstock)