Sticky diamond jewelry prices - crazy high prices need to come down

[Rosa]

So, b/c I can''t sleep right now, I''ve been reading and surfing the web, and checking out some stuff I''d bookmarked ages ago.

Specifically, I was looking at jewelry I emailed to myself notes about --> Pre-Lehman, pre-AIG, even pre-Bear Stearns collapse. So, what I''m really surprised at is how the prices haven''t changed at all.

I had emailed myself price & photos of some things I liked and the prices hadn''t budged one bit.

Here are two examples:

http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&Item=200391649280&Category=164321&_trkparms=algo%3DLVI%26its%3DI%26otn%3D2 I had gone to see this in person and one of the citrines was scratched pretty badly...although the seller said it could be polished out. I sent myself this ebay listing in spring of 2008, saw it in person a few months later. It was $895 back then, and still is today. Wouldn''t you think the prices would have come down at least a little? .5 ct diamonds and over each citrine approx 2.65cts each. Pre-crash, I''d have paid $750. Now, more like $600.

http://www.firenzejewels.com/diamonds/info/43-Dangle%20Earrings-31-3234-000-Lady-s-.65ct-diamond-and-14k-yellow-gold-antique-style-dangle-earrings-000-.html Also saw these in person and couldn''t justify the price. They didn''t look like .65ct tcw (although they may be) and are 14kt instead of 18kt. $1,225 is too much. If they cut the price 25% I''d start getting to the point of buying.

There are a LOT of empty booths on 47th Street. Obviously, Deena and Firenze, the two companies I listed from above must have enough business not to adjust their prices. I do think they have particularly nice things style-wise in each booth - nicer than some, but not all, of the other places on the block(or maybe just more to my taste.)

I was just wondering though, if overall, having such sticky prices is good for the jewelry industry as whole. I think not - and here is why:

I have a lot of "pent up" desire to spend cash that I have saved especially for luxury items. However, I also have to feel like I am getting good value. I can''t enjoy a purchase if I feel like I overpaid. Incomes are down dramatically, employment is down dramatically, especially here in NYC where financial services have been eviscerated, real estate is down - why not diamonds and jewelry? So, my "pent up" spending on luxury goods, instead of being funneled to jewelry, is being spent on other items that have suddenly gotten a lot cheaper due to the economy. Anecdotally, from talking to friends, I know this is true for them as well. A female acquaintance asked for a new Mercedes instead of a ring as a "push present."

Anyone else in the same boat? Anyone want to shed light on why merchants still think they can charge 2005 -2006 prices in 2009?

Thanks,
Rosa

 

[Karl_K]

Production was cut to match lower demand rather than let prices crash.
Rough prices have actually been going up lately because of limited supply and some countries having easy money available.

 

[Karl_K]

You can see the pricing chart here:
https://www.pricescope.com/diamond-pricing-history-chart.asp

 

[Rosa]

Thanks Karl,

that chart is interesting, but in the pieces I posted, the largest diamond melee was probably 8 points, if that.
In the chart you posted, prices in the 0 - .5 ct range are negative - look to be down to -4% from +5% a year ago.

I guess my thinking is that these businesses would need to move out old inventory at some point. Styles change, tastes change, etc. I doubt I would still be interested in buying the Firenze gold/dia earrings I posted b/c in the meantime I got very nice looking costume jewelry very similar and that kinda satisfied that particular craving.

Then, I took the money I''d set aside for yellow gold/dia earrings and bought some spectacular 2ct dia & 18kt gold earrings in a totally different style online from Solomon Brothers. (They were a lot more expensive than the Firenze ones, but were on clearance so the overall per carat price was much less, AND they were 18kt.) I had them appraised to add to our insurance rider, and the diamonds were better than I had expected for the price, so that was a nice surprise.

Personally, I have a very pessimistic view of the economy, the US debt and the trade deficit, and living in NYC it is just crazy how many people I know have been laid off from very high-paying jobs. These are the people who did shop for jewelry, and not just once per year, but now they are cutting back. Some of them have found jobs, even in their fields, but not paying nearly as much and with caps on pay for top people in the financial sector, banks are using that to even cut the salaries/bonuses of the "normal" employees.

It was just really surprising to me that these two merchants (I didn''t check others) weren''t having some kind of sale or clearance to keep the cash flow a little stronger. But, that may be a testament to their very prudent management of their businesses during strong times - maybe they saved up for these "rainy days" and when things do recover, eventually, they''ll make a killing.