The mood in mid-stream has continued to deteriorate over the last couple of weeks despite a significant tightening of rough supply and a recent adjustment in rough prices. Two trade shows – in Las Vegas and Hong Kong – could have changed the atmosphere had they been positive. Ultimately, the former was only moderate and the latter saw significantly fewer buyers as a result of the demonstrations on the Island. The continued impasse in the US/China trade war is impacting sales on the mainland. Growing tensions in the Middle East risk damaging consumer demand further. The one chink of light is that shortages have recently been reported on the Indian market in select polished areas: well-made 4grs VS/SI qualities in H/I colours. The hope is that retailers will be forced into buying other areas. Some on the market are now talking of a gradual recovery taking hold come September. However, this will require disciplined behaviour by everyone. Manufacturers will desperately need to make a margin once the uptick returns.
The Conference Board Consumer Confidence Index® declined in June, following an increase in May. The Index now stands at 121.5, down from 131.3 in May. The Present Situation Index – based on consumers’ assessment of current business and labor market conditions – decreased from 170.7 to 162.6. “The decrease in the Present Situation Index was driven by a less favorable assessment of business and labor market conditions. Consumers’ expectations regarding the short-term outlook also retreated. The escalation in trade and tariff tensions earlier this month appears to have shaken consumers’ confidence. Although the Index remains at a high level, continued uncertainty could result in further volatility in the Index and, at some point, could even begin to diminish consumers’ confidence in the expansion”, according to The Conference Board. Signet Jewelers reported that its total sales for the first quarter of 2020 fell 3.3%, whilst same-store sales were down 1.3%. Same store sales at Kay Jewelers, Zales and Jared all fell by 1.4%, 1.4% and 2.0% respectively. E-commerce sales increased by 5.3%. Total sales at Tiffany & Co. decreased 3% for the first quarter of the fiscal year. Comparable store sales dropped by 5%. In the Americas, Japan and Europe, net sales were down 4% in each region, whilst in Asia Pacific they were only 1% weaker. Comparable-store sales were 4% down in the Americas, 5% softer in Asia Pacific, and has 4% in Japan. Europe saw a 7% fall.