CAIRO: With a slowdown in the economic financial markets, a drop in foreign investment coming into Egypt, and a general decline in consumer confidence, the jewelry industry, like so many others, is experiencing a time of change.
All this comes as the industry prepares for its annual event, JEM 2008.
The event, which is taking place for the eighth straight year, will run from today through Saturday at the Intercontinental City Stars.
With JEM 2008 just around the corner, jewelry industry experts give mixed reaction about the impact that the global economic slowdown is having on their businesses.
But all acknowledge that the global crisis is resulting in a shift in consumer trends within the industry.
“The market is a bit bad, said Rosie Khodr, master franchiser for Italian jeweler Miabella, “because of the increase in gold [prices].
Though gold prices have slid consistently this year, Khodr, who imports her precious stones and metals from Belgium, has suffered as a result of the languishing Euro.
Gold prices are traditionally set in dollars.
Khodr also argued that the industry had been hurt by a 30 percent increase in diamond prices this year.
Partially to blame for this, she said, was an adjustment in the Rapaport diamond pricing system which pushed prices higher.
The Rapaport Diamond Report has become the internationally recognized authority for diamond pricing.
Even as some expect the imminent doom of the global economy, diamond industry experts appear unfazed.
“I haven’t been really affected, said Khodr of her diamond sales. “I haven’t changed much with regard to sales strategy, she added.
On Monday in Antwerp, Belgium, 500 of the diamond industry’s top executives met to discuss the industry through the lens of the global economic crisis.
Most at the meeting agreed that the diamond business may take a short-term hit but that the fundamentals of the industry are strong.
Moderator of the event, Chaim Even-Zohar argued that the retail demand for diamonds will decrease by 10 percent over the next year. Wholesale business, he noted, would fall around 20 percent.
“Let us keep things in perspective, said Even-Zohar, “under current circumstances, a 10 percent fall in demand at retail is not the end of the world.
In response to the slowdown, attending diamond executives agreed to cut diamond supply in the short-term to soften losses.
Ahmed El Sirgany of the famous Sirgany family of jewelers noted that diamond sales had decreased, but that he had also seen a major shift in consumer preference.
“It’s been very slow lately, very very slow, he said, mentioning a “low turnover for our goods.
The jewelry industry has been abuzz as of late because of the violent fluctuations in the price of gold, typically thought of as a stable commodity.
Gold woes, though, have not affected the diamond trade, in which El Sirgany specializes.
Unlike Khodr, El Sirgany has not seen the price of diamonds he purchases change much.
Gold prices “didn’t affect me much, said El Sirgany, “because the diamond price was pretty stable.
El Sirgany, though, noted that he has begun to see a shift in the market.
“Instead of buying a lot of gold, he said, “people are buying small diamonds.
He added that people are not spending more on diamonds, rather they are shifting their investment focus from a once-stable commodity to a safer investment.
The prices for large diamonds, he noted, had long been too high and had driven would-be buys away.
Seeking to correct that, the new Rapaport report kept prices stable for small sizes and lowered them for diamonds over three carats.
El Sirgany also bemoaned what he considered to be a narrow-minded approach by the Egyptian jewelry consumer.
“In Egypt, there has always been the big three: emeralds, rubies, and sapphires, he said.
He argued that there are many precious stones that consumers will not consider buying because they are not thought to be precious.
“Alexandrite, he said, offering an example, “is in the market, and it’s known. But people think it’s non-precious.
El Sirgany said that he and his colleagues have found only limited success in introducing the purple stone tanzanite to the Egyptian market.
“It’s very precious but people in Egypt do not yet know it, he said. “But it’s famous worldwide.
