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Rough economy has global prices dropping for rings
By Thomas Mulier
and Jean Chua
Bloomberg News
Published on Thursday, May 07, 2009
Whether it's a $50,000, 5-carat marquise set in platinum, down 25 percent from two years ago, or the Amazon.com variety with a tinge of yellow that's going for $89.99, diamond prices are the lowest in five years.
The $65 billion global diamond market is seeing prices of polished gems drop by an average of 31 percent since an August peak as the worst recession since World War II deterred buyers of luxury items like necklaces and earrings, according to diamond data company PolishedPrices.com.
Antwerp, the world's biggest gem trading hub, has seen exports drop as much as a third. De Beers, the largest diamond producer, slashed output by 91 percent.
The slump is good news for buyers. Katherine Huang, a Boston-based consultant to jewelry buyers, said she helped a client from California with a $50,000 budget find a ring in December for $38,000 with a bigger diamond than he anticipated.
Rings with 3- to 5-carat diamonds of VS2 clarity and G color — meaning they have no visible faults and are almost colorless — have dropped in price by as much as a quarter in two years, she said.
''Go for the larger stones, because the discount is greater,'' she advises.
Wholesale diamond prices have dropped about 20 percent to 25 percent from their highs around June last year, according to U.S. Internet jewelry retailer Blue Nile Inc., which gets about 70 percent of its sales from diamond engagement rings. The average price of an engagement ring in the U.S. was $3,200 last year, Chief Executive Officer Diane Irvine said.
At the cheapest end of the market, Internet retailer Amazon.com Inc. is selling a platinum ring with a 0.5-carat diamond for $1,675, down from a list price of $3,425. The gem's clarity is SI1 or SI2, meaning there are slight defects that normally can't be seen by the naked eye.
Jewelry retailers are suffering as buyers stay away or hang on for a discount. Signet Jewelers Ltd., the world's largest jewelry-store owner and parent of Sterling Inc. based in Akron, posted a fourth-quarter loss of $424 million after writing down the value of assets.
Tiffany & Co., the world's second-biggest retailer of luxury jewelry, posted a 76 percent drop in fourth-quarter net income.
About 15 percent of jewelry shops in the U.S. closed last year, Paramus, N.J., watchmaker Movado Group Inc. said in April. Irving, Texas-based Zale Corp., the biggest U.S. jewelry chain, said in February it will close 115 stores.
Internet retailers and Wal-Mart Stores Inc. are aiming to undercut the remaining stores. Web sites make it easier to compare prices.
Whether it's a $50,000, 5-carat marquise set in platinum, down 25 percent from two years ago, or the Amazon.com variety with a tinge of yellow that's going for $89.99, diamond prices are the lowest in five years.
Get the full article here.
Comments
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Posted 06:51 AM, 05/07/2009
Diamonds are nothing but a rock. They have industrial value only. You buy it, look at it, admire it, but it is just a rock. The entire jewlery business is a crock of deception.
Akron, OH, 30
Posted 08:58 AM, 05/07/2009
@toby, tell that to my wife!
