GemThoughts

A couple of years ago I proposed that everything De Beers was doing pointed to the end of the sight process.  First off, they offered "additional" goods to sightholders, then proposed to sell off excess goods to non-sightholders. They quickly backed off from that when, undoubtedly,  sightholders saw their price and marketing edge dented and squawked loudly.  Also, everyone knew by then that production was going to decline and fall behind demand.  BHP was already demonstrating that auctions were producing solidly better prices - though the quantities were not that great.  Moreover, De Beers was being put into a tighter and tighter box by the producing countries, notably Botswana, South Africa and Namibia.  Russia was already fated not to be a supplier to De Beers.  People in the trade pooh-poohed the idea, saying that De Beers would always want to distribute through a small number of clients; would not give up the power of dictating the content in the...

The array of shows in Las Vegas are over, and we are all recovering.  The shows were busy--very busy--and many vendors had excellent results, the best since before the downturn.  Nevertheless, the mood was a mix of relief, excitement and more than a touch of worry.  Why worry?  Well, we are all still staring at a stumbling economy, one that has shown signs of stalling, which scares everyone.  A major supplier has seen a double-digit increase in sales, and it appears to them that consumers are buying again, even if it is cautiously.  But they are still not sanguine about the months to come.  Part of the energy we saw might be due to retailers needing goods after working down their inventory levels.  Part may be because they have made good money buying gold and stone jewelry off the street.  One vendor said that every retailer they met with reported that buying from the public has been a big boon. Another open question is whether the public w...

The JCK Show marks its 20th year in Las Vegas, and things sure have changed!  Las Vegas became the important battleground for jewelry trade shows, and then economic forces beyond anyone's control disarmed the battle.  Yes, there are still changes (JCK moving to the Mandalay, for example) but the reality has not changed.  There are fewer manufacturers extant that can exhibit--and others that have simply dropped out--and there are ever fewer retailers that can come and buy.  We should set aside the question of whether this is good or bad; whether in some ways we are better off not having the overheated market of the boom years.  But on the supplier side, we know that we have long suffered from too much capacity, a condition that will probably continue for quite a while.  The low barriers of entry into the business assures that.  And on the retail side, we have undergone many years of consolidation and stratification that has forced retailers to adapt or...

A number of years ago, maybe ten or more, I was regularly asked by De Beers to do focused studies on the US diamond market.  In those days, De Beers was still working to keep the monopoly boat afloat and trends in the US market was important.  The US market was, after all, better than half the world market, especially after Japan faded away.  In the course of one study, I pointed out to them that they were consistently minimizing the recycling of diamonds, especially better ones, in the US.  After many successful years of selling billions of dollars into the US market, and substantially expanding the consumer base, it made sense that a percentage of that was going back upstream as people sold jewelry out of estates or need.  I took a pure guess and said that it could be 5% of publicly held stocks. Just today, I read a column by Chaim Even-Zohar in which he describes the US consumer as the next "diamond mine", precisely the term I used in a presentation at th...

We are now moving into the critical part of the year of the jewelry industry.  The summer trade shows are not far away, and suppliers are waiting to see, with bated breath, just what depth of commitment retailers are going to make in stocking for the fall.  The political news, here and abroad, is unsettling.  The stock market is bubbling, but news about the residential market is bad.  Employment stays relatively high, but corporations are making money.  The dollar is weakening (making our exports more attractive overseas), but the cost of materials and labor for our jewelry seems to be rising geometrically.  Even US Treasuries have seen its credit standing trimmed. All of this adds up to uncertainty about the future (as evidenced by the latest New York Times/CBS poll).  Is this a problem only for the lower and middle market, while the affluent are back buying? What do you think?  And how are you responding in your business?

I started this blog in January of this year, thinking I would get to redesign and open my website fairly soon thereafter, and tie it all together.  Funny how life, work and family stretch things out. Just today the site is open (http://www.janosconsultants.com/) and I think it has been tweaked enough.  So on to starting a dialogue about our industry, with all your help.

Next month will mark 19 years of my consulting in the diamond and jewelry industry.  It has been a great run and I have enjoyed most of it.  I will not, of course, have another 19 years of doing the same.  I think now, at the outset of 2011, of the remarkable changes that have transpired, and of the greater ones to come.  So, I wish to make the most of the years to come, however many they may be. I still have much work to do, thankfully.  But it also time to open a conversation with anyone inclined to consider the larger world within which we operate.  The jewelry industry is introverted, small, and entrepreneurial.  But we are nevertheless buffeted by an astounding variety of societal and technological revolutions. So I open this blog in the hope that friends, colleagues and fellow members of this great industry will use it for a frank and profitable venue for discourse. I can't promise to chime in every day, as I will be preoccupied at var...