Here it is July and the world is still wearing masks and staying home; for the most part. The numbers for the mining companies are in for the first half and they are armageddon-worthy as we might expect. De Beers revenues down 96% in the last quarter. 96%!!!! Alrosa revenues down 91%. One reason is that these two, which account for two-thirds of the world rough market, have chosen to hold the line on prices and stockpile, instead of selling at prices which have fallen 25% or more.. Who has ever seen such declines?

But… as my old De Beers friend, Robin Walker, used to tell me,… “hang on a minute…” Retail has come back reasonably well. In the US, overall retaIL sales were up 1% in June, from the previous year when we were all free to come and go and spend money as we pleased. . Who would have thought?

In the US, anecdotal reports from retail jewelers are encouraging — business is going on and, not surprisingly, on-line business is up over 50% for some jewelers. Tiffany sales , down 45% for the quarter ending April 30, may be reporting a strong rebound in the next quarter if the buzz is correct.

One major reason is the US CARES Act that injected more than $1 trillion dollars to bolster the economy through the pandemic— though the pandemic is running munch longer than many had anticipated. Dave Bonaparte at Jewelers of America told Rapaport, acknowledged that the stimulus package has helped maintain sales.

The industry is not contracting as quickly as people believed, he noted, adding that the downturn in demand has been much less severe than the 2008-10 financial crisis. He did say, however, that mall jewelers are still beset with high rents and diminished sales that cut deeply into their financial position., as evidenced by the bankruptcies of a number of large mall-oriented retails

And retail jewelers I have spoken with say that demand for lab-grown diamonds is accelerating — even making inroads in to the once sacrosanct engagement ring market.

“A lot of people don’t have much confidence in their (economic) future right now, so they don’t want to commit to a very expensive purchase, “ said one Texas jeweler.. Another, in Califronia, noting that some buyers are even looking at $25 ceramic rings, added “I look at this as a temporary situation, and I’ll try to get them to come back for an upgrade (to a natural diamond) when times are better.”

Better times may be put off if the CARES Act lapses. It expires at the end of this month and the US Congress is still flailing to come up with a replacement — which is, by no means certain.

The EU has just renewed its stimulus program so those “zombie” jobs will keep trundling on until… hopefully.. things recover to the point when many of them can be restored. Retail sales in China have bounced back, according to Chow Tai Fook’s numbers,

So the bottom line — an encouraging takeaway — is that demand appears to be robust which is a strong base to rebuild on. It is up to our industry to continue to remind consumers of the beauty and significance of our Earth’s treasures. There may not be an immediate payoff — consumers will be pre-occupied with more basics for the time being-but will will pay off in the long run for certain.

Russell Shor

Along with his 40 plus years of experience in the gemstone industry, Russell is author of white papers and columns, a consultant for International strategies, advisor of Public Relations staff, a spokesperson for economic, social and other issues affecting diamond, gemstone, cultured pearl industries.

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