Russell Shor, Senior Industry Analyst
Russell Shor, Senior Industry Analyst
A 61.35 carat emerald ring sold for $4.65 million – four times the pre-sale estimate – at a Sotheby’s auction Dec. 11, 2013 in New York. Photo courtesy of Sotheby’s
Jewelry sales for the 2013 holiday season continue to point to decent, if not spectacular, growth in the U.S. market, which accounts for about 35% of world volume. While most diamond and gemstone sales happen in the week before Christmas, the results so far indicate that most of the growth will be driven by higher-end and on-line merchants.
High-end stores had a strong start to the season, according to a survey by The Centurion Newsletter, with 87% of jewelers reporting sales increases over last year. About a third reported increases between 6% to 10% and a fourth showed increases above 10%. Results tapered off a bit during the second week of the season, but still pointed to a strong showing, especially for diamonds, which accounted for about half of the sales volume.
The e-commerce research firm comScore reports that on-line sales of all merchandise have been running at 9% above last year. Some surveys note that diamond and jewelry sales are running at higher growth rates.
U.S. sales of diamonds may be dampened slightly by the continued curtailment of memo business. Banks financing the diamond pipeline have been cracking down on expensive memo deals – where diamond suppliers put goods in retailers’ showcases with little or no money upfront, and collect on sales after January. Banks have also been requiring diamond suppliers to sell goods on shorter payment terms. On the other side, many retailers, citing the huge upfront investment needed, say they cannot afford to keep large diamond inventories.
Dealers report that demand in China should pick up for the Chinese New Year on Jan. 31, when many workers receive a bonus. Retailers there continue to stock diamonds cautiously, but anticipate strong demand at the end of January—mainly in gold items.
De Beers’ December sight was about $565 million, much larger than expected. In contrast to the previous sights, clients left few goods on the table – mainly small stones that were not profitable to cut in today’s market, particularly after the value of the rupee plunged in relation to the U.S. dollar, the currency in which De Beers conducts its diamond sales.
One report noted that few De Beers’ sightholders have been able to make a profit since last June and, as the rupee continues to struggle in the currency exchange markets, they continue to pressure for additional price reductions.
It is likely, however, that despite the current “break-even” prices of De Beers rough, clients will resist deferring or refusing their sight allocations, because 2014 is the review year for the new client sight contracts that begin in January 2015.
One area of the market where there seems to be no end to growth is auctions: Christie’s and Sotheby’s combined sales for the year have exceeded $1.2 billion ‒ by far a record.
Both Sotheby’s and Christie’s had extremely strong end-of-season sales in New York. Sotheby’s total of $60.5 million for its Dec. 11 sale was a record for that venue. A 61.35 carat Colombian emerald ring soared four times over its pre-sale estimate of $1-$1.5 million, achieving a hammer price of $4.65 million.
Christie’s Dec. 10 New York sale totaled $65.8 million, with the top lot, a GIA-graded 52.28 ct D –IF, type IIa diamond selling for $10.9 million, or $208,817 per carat.
Russell Shor, Senior Industry Analyst
Russell Shor, Senior Industry Analyst
A 61.35 carat emerald ring sold for $4.65 million – four times the pre-sale estimate – at a Sotheby’s auction Dec. 11, 2013 in New York. Photo courtesy of Sotheby’s
Jewelry sales for the 2013 holiday season continue to point to decent, if not spectacular, growth in the U.S. market, which accounts for about 35% of world volume. While most diamond and gemstone sales happen in the week before Christmas, the results so far indicate that most of the growth will be driven by higher-end and on-line merchants.
High-end stores had a strong start to the season, according to a survey by The Centurion Newsletter, with 87% of jewelers reporting sales increases over last year. About a third reported increases between 6% to 10% and a fourth showed increases above 10%. Results tapered off a bit during the second week of the season, but still pointed to a strong showing, especially for diamonds, which accounted for about half of the sales volume.
The e-commerce research firm comScore reports that on-line sales of all merchandise have been running at 9% above last year. Some surveys note that diamond and jewelry sales are running at higher growth rates.
U.S. sales of diamonds may be dampened slightly by the continued curtailment of memo business. Banks financing the diamond pipeline have been cracking down on expensive memo deals – where diamond suppliers put goods in retailers’ showcases with little or no money upfront, and collect on sales after January. Banks have also been requiring diamond suppliers to sell goods on shorter payment terms. On the other side, many retailers, citing the huge upfront investment needed, say they cannot afford to keep large diamond inventories.
Dealers report that demand in China should pick up for the Chinese New Year on Jan. 31, when many workers receive a bonus. Retailers there continue to stock diamonds cautiously, but anticipate strong demand at the end of January—mainly in gold items.
De Beers’ December sight was about $565 million, much larger than expected. In contrast to the previous sights, clients left few goods on the table – mainly small stones that were not profitable to cut in today’s market, particularly after the value of the rupee plunged in relation to the U.S. dollar, the currency in which De Beers conducts its diamond sales.
One report noted that few De Beers’ sightholders have been able to make a profit since last June and, as the rupee continues to struggle in the currency exchange markets, they continue to pressure for additional price reductions.
It is likely, however, that despite the current “break-even” prices of De Beers rough, clients will resist deferring or refusing their sight allocations, because 2014 is the review year for the new client sight contracts that begin in January 2015.
One area of the market where there seems to be no end to growth is auctions: Christie’s and Sotheby’s combined sales for the year have exceeded $1.2 billion ‒ by far a record.
Both Sotheby’s and Christie’s had extremely strong end-of-season sales in New York. Sotheby’s total of $60.5 million for its Dec. 11 sale was a record for that venue. A 61.35 carat Colombian emerald ring soared four times over its pre-sale estimate of $1-$1.5 million, achieving a hammer price of $4.65 million.
Christie’s Dec. 10 New York sale totaled $65.8 million, with the top lot, a GIA-graded 52.28 ct D –IF, type IIa diamond selling for $10.9 million, or $208,817 per carat.
