Posted by: Lauren Young on March 26, 2009
Earlier today I wrote about our chief economist’s call that the stock market has bottomed. A housing guru also says a real estate bottom may be in sight. Apparently, the diamond market is starting to shine again, too.
I’ve been monitoring the gold and gems demand recently and interviewing people who work in that industry. A week ago, when I spoke to esteemed estate dealer Andrew Fabrikant of Fabrikant Fine Diamonds, he said people continue to sell gold to cash in on strong prices, but gems have lost their luster. That’s changed: “All of the sudden people are buying diamonds,” he told me this afternoon.
This morning Fabrikant says he had a Eureka moment. He came to the realization that a shift may be underway. For example, he cannot recall a client inquiring about a diamond engagement ring in the month of January. In the past week, however, three clients have asked about engagement rings and “another guy from Colorado just asked about buying a gift for his wife.”
“I just sold a lot of stuff to Europe, and it is big numbers, in the hundreds of thousands of dollars,” he says. The buyers are private clients as well as European dealers.
Diamond prices, while still weak, seem to be stabilizing, Fabrikant says. “The diamond cutters are getting more business. Before they were sitting around playing cards, but now they are starting to cut again.”
More good news for the jewelry industry: This week Citi Investment Research analyst Mark S. Mahaney upped his price target for online jewelry retailer Blue Nile (NILE). The analyst also said Tiffany’s (TIF) fourth-quarter results signal improving trends. On Monday, Tiffany reported its fourth-quarter profit dropped more than 75% but still beat Wall Street’s estimates.
Fabrikant says people are buying blingy gifts, even though they may not be spending as much as they would have a year ago. “Maybe people feel like the bottom has been reached, or that some of them aren’t as worse off as they thought they were going to be,” Fabrikant says. “Love’s not dead yet.
Have you seen any signs that the economy is turning around? What about unemployment, real estate, or the stock market? Any pearls (pun intended) of wisdom you can share will be illuminating.