Business at the April 24-May 2 BaselWorld Fair was slower than expected as Asian buyers proved scarce, Europeans struggled with a slow economy and investment buyers turned a cautious eye toward the lofty prices of top gemstones.
This year’s show featured a much greater selection of top fancy-colored diamonds than previous years – vivid and intense pinks and blues, even a large intense green – but buyers willing to pay the million-dollar-plus per carat prices were scarce. The asking rates reflected the fact that, just before the show, several fancy-colored diamonds achieved record prices at well-publicized auctions. (A 5.30 carat Fancy Deep blue diamond, for example, sold for $9.5 million – $1.8 million per carat – at Bonham’s London on the day the Basel show opened.) In previous years, a number of ultra-wealthy private buyers from Asia, the Middle East and Russia attended the Basel show to buy such stones and large colorless diamonds.
Diamond dealers who did well were offering middle and lower quality colorless diamonds and smaller fancy yellow goods; these gems are normally not in abundance at Basel because show expenses far exceed other venues.
High-quality colored stones were also a difficult sell because prices for unheated Burmese ruby and sapphire, as well as Colombian emerald, increased by 20-30% in the months leading up to the show. Emeralds from other locales, however, were in strong demand due to fashion magazines touting green as the year’s most popular color for accessories.
The scarcity of Chinese buyers was certainly another factor for the slow show. These buyers helped the luxury watch companies – the main exhibitors at BaselWorld – achieve record sales last year. But watch company executives said sales this year were down 30% or more because many Chinese buyers stayed home. The reason they cited, beyond a slowdown in the country’s economic growth, was the anti-corruption campaign of the country’s premier Xi Jinping. Luxury watches, and to a lesser extent, diamonds, had been a favorite “gift” item to grease the wheels of China’s government – so much so that nearly a quarter of all Swiss luxury watch exports went there.
Gem dealers also thought the new location of the gemstone hall, which was poorly marked and difficult to access from inside the show, also helped blunt sales.
“Every year we have a few luxury watch buyers visit the gem hall for a look. Sometimes this translates into sales,” one major diamond exhibitor said. “I wouldn’t say it is a major factor, but it can make enough of a difference to turn a slow show into a decent show.”
Another dealer noted that price volatility of polished diamonds over the past year deterred a number of luxury watch companies from producing as many diamond watch lines as they had in the recent past.
“They’ve already had to deal with gold price fluctuations and don’t want to add 20% variations in diamond prices. They don’t want to deal with both at the same time,” said one diamond supplier.
The buying was somewhat better in the designer jewelry halls, particularly because more American retailers were in attendance than in recent years (despite the high rate of the Swiss franc). Retailers said they were looking for pieces to set them apart from Internet competitors.