US wholesale: diamonds proving to be bright spot

Joyce Kauf

Bridal remains a likely driver of holiday results amid growing fears of recession.

Elongated fancies are still trending, but rounds are in a category of their own when it comes to the top-selling cut for bridal. While sales may not match those of 2021, couples are always getting engaged — a fact that’s tempering concerns about the economy.

New York: stable and selling

It’s all about having the right inventory,” says Abe Fastag, vice president of New York-based wholesaler Ideal Brilliant Co. “The percentage of making a sale when a serious call comes in is as high as it ever was because goods are scarce — and that applies to bridal as well.”

He has found that “rounds are always in demand. Fancies do quite well because they offer customers a way to create a more unique look.” While ovals sell well, he sees strong interest in nice marquises, followed to a lesser extent by pear shapes.

Based on his sales, the average center stone is generally from 1.25 to 1.75 carats, with prices usually ranging from $5,000 to $15,000. Most of the diamonds are VS and SI clarity. He only sells D to J colors.

Furthermore, while diamond prices have gone up, the increases are not on par with the 30%-plus hikes for other luxury goods like handbags and shoes.

From that perspective, Fastag believes the diamond industry is more stable. “If diamond prices had gone up that high, then I’d say we were in trouble,” he says. He takes the positive viewpoint that bridal will remain strong.

We get a feel for what is happening in the retail market very quickly,” he adds. “We’re all interconnected now.

Chicago: push to pear shapes

Ovals are so hot; they’ve been a huge trend for almost four years. We call them the new princess cut,” says Aaron Goynshor, marketing director at wholesaler United Gem Ltd. in Chicago. “We’re seeing strong demand for elongated radiants, as well as a little push toward pear-shaped diamonds.”

Goynshor also cites yellow gold as a “big trend,” especially for finished bridal rings. In wholesale dollars, the average ring falls into the $5,000 to $15,000 range for a 1- to 2-carat center stone. He reports good demand for 0.80 and 0.90 carats, as well as larger stones in the 2.50- to 3-carat range. Popular colors include G, H and “sometimes I.” Clarity rarely falls below SI2, he says; 80% of requested diamonds are generally between that and SI1.

Still, Goynshor is concerned about a “perfect storm” of rising diamond prices, a limited ability to source nice makes in bread-and-butter goods, and the threat of recession that is at the “back of everyone’s mind.” He anticipates that holiday unit sales will remain the same as in 2021, but the average price per unit may decline. He also believes brick-and-mortar retailers will play a larger role in driving sales because of the added-value services they provide.

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Source Rapaport

Article from the Rapaport Magazine – September 2022. To subscribe click here.