This was supposed to be the diamond decade. Back in 2010, De Beers executives were touting that the coming 10 years would bring unprecedented demand and growth to the industry. Almost halfway through, it feels anything but, especially for diamond dealers and manufacturers struggling to raise liquidity levels and garner respectable profit margins.
As the years passed, we’ve heard less about the diamond decade and, somewhat appropriately, more about the diamond dream at industry events and gatherings. So what happened to ‘the diamond decade’ and what were those promises supposed to bring?
Fundamentally, the industry was looking at consumer demand and bracing itself for continued rapid growth in China and India and a recovery in the U.S. That, coupled with stagnant supply, meant that the decade promised to be very good for diamonds. While all that remains true, the global economy and the diamond trade face very different realities four to five years later.
[two_third]In 2014, the U.S. has indeed shown signs of recovery but cracks are still showing. Consumer sentiment has been mixed and the start of the retail shopping season was hardly encouraging. U.S. sales at brick-and-mortar retailers over Thanksgiving weekend fell 11.3 percent year on year to $50.9 billion, according to preliminary data published by the National Retail Federation (NRF). However, the NRF has maintained its guidance for a 4 percent increase in sales this Christmas season.
The U.S. jewelry market has gone through dramatic changes in the past few years. It suffered greatly during the recession, losing the likes of Friedman’s, Whitehall and others, only to emerge leaner. That consolidation also left room for dominance by larger retailers, and the recent merger between Signet Jewelers and Zale Corporation presents new challenges for smaller independent jewelers.[/two_third][one_third_last]
“In order to salvage the promise of a decent decade for diamond manufacturers, the immediate focus has to be on improving their profit margins and liquidity.”