Steady demand for high-end, unique stone.
Diamond exhibitors reported steady sales and strong demand for unique stones at the Basel show; however, they were frustrated by show expenses and venue changes made at this year’s fair.
“It’s an expensive show and not worth it,” said Leibish Polnauer, the president of Leibish & Co., a specialist supplier of fancy color diamonds. “Europe is not a market and you can’t compare this show to Hong Kong.”
Most diamond exhibitors who spoke with Rapaport News agreed, estimating that their booth expense was in excess of $100,000, with higher rentals and smaller booth space than in 2012. “It’s almost impossible to cover our expenses,” said one exhibitor who requested anonymity. “Basel is about seven times more expensive than other shows. Hong Kong and Las Vegas are not so expensive and you get more for what you’re paying.”
Organizers of Baselworld increased the price of the exhibitor space by 20 percent from CHF 350 ($373) per square meter previously to CHF 420 ($448) per square meter this year. The show completed a $454 million renovation in time for this year’s show, which resulted in the diamond pavilion being relocated from its previous position near the entrance of the main hall, to Hall 3, located behind the major watch brands and closer to the jewelry brands.
Bernard Keller, communications director for Baselworld, explained that the renovation reduced the overall available space at the show from 160,000 square meters to 141,000 square meters but resulted in better quality, multi-level space for the big-brand watch and jewelry exhibitors.
Furthermore, diamond dealers complained that their location was difficult to find, in the outfield and poorly marked with signage.
Keller reasoned that the new location meant that diamond exhibitors were now in the same building as the watch and jewelry brands whereas before they were separated. “This makes it much more comfortable for visitors,” Keller said. “It’s a question of signage and communication, which can be improved and I am convinced that the change will result in more traffic than they got last year.”
Steady high-end demand
Still, diamond exhibitors did report steady traffic in Hall 3 (see picture below), but some concluded that the new location enticed only serious buyers to make an effort and visit the diamond section.
Suppliers who spoke with Rapaport News reported strong demand for collection, large stones above 10 carats, as well as for fancy color diamonds and nice-make fancy shapes.
“These are goods we don’t have to worry about,” said Efraim Zion of Dehres Limited, a supplier of better-quality polished diamonds and jewelry. “Even if a store doesn’t sell the stone immediately, they know they eventually will.” He added that commercial-quality large stones in L-to-M colors are also selling well, while finished jewelry sold better than loose stones at the show.
Barry Berg of William Goldberg, a high-end dealer and jeweler, agreed and explained that the market is being driven by emerging economies such as the Far East and Middle East. While consumers recognize the investment aspect of their purchase, Berg stressed that the market is consumer driven. “People want beautiful jewelry to wear,” he said. “There is a real health in this market. Consumers are looking for important diamond jewelry.”
Dealers noted that margins are generally stronger in the high-end segment this year than for commercial goods, particularly in fancy color stones. However, they also acknowledged that their clients have become more knowledgeable about the quality of the diamond and its price and that there is greater competition to source these goods.
Beyond the unique items, exhibitors reported that there remains caution in the market with pockets of demand for commercial-quality goods. They noted that the market has slowed slightly since the Hong Kong show in March and April is generally a softer month for the trade anyway.
However, dealers said they were looking for better-quality goods at Basel and that overall feedback from sales remained mixed before the show comes to a close on May 2.
“There are very few players at the Basel show who can come in and make the show really worthwhile for loose diamonds because the show is expensive,” said one dealer in fancy shapes who asked to remain unnamed. “But they’re around and if those buyers come to your booth, it can be great. If not, Basel can be a difficult show for us.”
The following is a summary of some of the stronger trends observed during the Basel show:
• There is a strong market for unique stones with demand driven by Far East and Middle East consumers.
• European high-end retailers are in the market for special stones and they are willing to pay premium prices but not looking to make large-quantity purchases.
• Demand for fancy colors is strong, particularly for fancy intense pinks and blues. Exotic colors such as orange and greens are also generating a lot of interest.
• Very good demand for special large stones: 10-carat-plus, D, IF.
• Steady demand for large, commercial-quality diamonds: 10-carat-plus, F to H, VS to SI.
• Nice-make fancy shapes are very strong with pear-shaped, 0.70-carat to 1.99-carat, very hot and in short supply.
• Nice-make hearts and ovals are hard to find with steady Far East demand, while emeralds are steady.
• The strongest sellers in commercial-quality goods remain 0.30-carat to 0.40-carat, F-to-G, VS2-to-SI1 diamonds.
