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September 1999

Diamond News

Panel Predicts the Future

Memo, economy, branding, consumer tastes

Retailers must start to buy diamonds rather than borrow them on memo to reduce the burden on manufacturers. If not, the entire industry will suffer, said Anna Martin, senior vice president of ABN-AMRO Bank, New York City, during a panel discussion on the future of manufacturing and marketing diamond jewelry at the International Gemological Symposium.

The growing reliance on memo is troubling, she said, because manufacturers are already suffering lower sales from the collapse of Asian markets and stiff competition that forces lower margins. As a result of these financial concerns, even banks that specialize in the diamond industry – such as ABN-AMRO – are hesitant to lend money, said Martin. And if manufacturers start to crumble under the weight of slow sales and even slower paying retailers, it will start a chain reaction through the entire industry.

Another panel member, retailer Ed Bridge of Ben Bridge Jeweler, Seattle, WA, listed five trends affecting jewelry: the continuing health of the economy, more channels of distribution and competition, technological advancements, branding and demographic changes. The largest transfer of wealth in history will reach its peak by 2040, he said, as Baby Boomers transfer their accumulated wealth to their heirs. This new wealth will spur sales of jewelry for the foreseeable future.

Eve Goldberg of William Goldberg Diamond Corp., New York City, said larger diamonds and fancy shapes will remain popular, spurred in part by De Beers' advertising campaigns, which no longer focus solely on rounds. But she predicted the market will move away from ostentatious cuts to more subtle ones, such as cushion cuts, which have a long history and can be romanced at the sales counter.

Goldberg also advised retailers to consider lower-color diamonds – I, J and K grades – which she said are just as beautiful as higher colors when well cut. To prove the beauty of these diamonds, however, you must show them to customers and compare them with similar diamonds with higher color grades, she said.

by Robert Weldon, G.G.

Copyright © 1999 by Bond Communications.


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