{"id":15014,"date":"2022-04-19T11:53:33","date_gmt":"2022-04-19T06:23:33","guid":{"rendered":"https:\/\/gjepc.org\/solitaire\/?p=15014"},"modified":"2022-04-19T13:04:51","modified_gmt":"2022-04-19T07:34:51","slug":"us-consumer-diamond-demand-in-2022-is-poised-to-remain-resilient","status":"publish","type":"post","link":"https:\/\/gjepc.org\/solitaire\/us-consumer-diamond-demand-in-2022-is-poised-to-remain-resilient\/","title":{"rendered":"US Consumer Diamond Demand In 2022 Is Poised to Remain Resilient"},"content":{"rendered":"\n

While a repeat of 2021 is unlikely, a record number of weddings in the US are expected to drive diamond jewellery sales in 2022, surmises New York-based diamond industry analyst Paul Zimnisky<\/strong>.<\/em><\/h4>\n\n\n\n

Following the onset of the pandemic, a sharp decline in consumer discretionary travel and entertainment spend served as a boon to the diamond industry. Combined with record global economic stimulus, confident consumers looking to give meaningful gifts drove diamond jewellery sales to an all-time high in 2021.<\/p>\n\n\n\n

It was the US consumer that led the charge. In December, Bulgari CEO Jean-Christophe, explicitly noted: \u201cThe main surprise in 2021 post-Covid-19 has been the incredible turnaround in the American market.\u201d A few weeks later, Signet Jewelers, the largest jeweller in the US, and American-icon Tiffany & Co., now a subsidiary of LVMH, both reported record sales (and record holiday seasons) for 2021.<\/p>\n\n\n\n

Signet, which raised sales guidance an unprecedented six times as the bumper year progressed, regularly cited a \u201cslower than anticipated return to travel and experience spending\u201d as a primary reason for the continued strength.<\/p>\n\n\n\n

\"\"<\/a>
A Jared\/James Allen combination store in New Jersey, USA, taken in April 2022. Jared and James Allen are subsidiaries of Signet Jewelers. Photo: \u00a9 Paul Zimnisky<\/figcaption><\/figure>\n\n\n\n

Although, interestingly, according to global payments company, American Express, \u201ctravel and entertainment spending\u201d had returned to 82% of pre-pandemic levels as of year-end 2021. While the figure incorporated business as well as leisure spend, management noted that leisure spend, specifically on travel, was driving the rebound.<\/p>\n\n\n\n

For context, approximately 35% of American Express\u2019 business is the \u201cUS consumer,\u201d followed by \u201cUS small- to-medium-enterprise\u201d at 27%, followed by \u201cinternational consumer\u201d at 12%, followed by \u201clarge and corporate global\u201d at 6%.<\/p>\n\n\n\n

During an analyst call in late-January, American Express management noted that travel bookings in Q4 2021 were up 24% up over the comparable quarter in 2019, the pre-pandemic proxy \u2013 further noting that in \u201cthe first couple of weeks\u201d in January 2022, travel bookings were up 44% relative to 2019. That said, management also commented that growth in \u201cgoods spending\u201d continued to be strong, setting up expectations for \u201cstrong momentum\u201d to continue.<\/p>\n\n\n\n

Looking forward, given the very strong base in 2021 and a notable reduction in accommodative monetary and fiscal policy by major economies, it is highly unlikely that the diamond industry will see a repeat of 2022, at least from the standpoint of relative growth. Further, creeping challenges, including new Covid-19 lockdowns in China, as well as the short- and medium-term geopolitical and economic implications of the conflict in Ukraine is likely to temper the momentum of the diamond industry.<\/p>\n\n\n\n

That said, Signet recently guided sales growth of 4% for the company\u2019s current fiscal year, which ends January 2023 \u2013 which is on top of the 50% year-over-year growth it achieved last year. The management noted pent-up wedding demand as one of the forecasted growth drivers, noting that it is expecting the most US weddings in \u201cnearly 40 years.\u201d<\/p>\n\n\n\n

Also worthy of note, fast growing US-based online diamond retailer, Brilliant Earth, is guiding calendar-2022 sales of $485-500 million, which would represent 30% year-over-year growth. In March, speaking to year-to-date performance, management said, \u201cwe’re pleased that the strong finish last year did not subside, as we’ve enjoyed positive business momentum (so far in 2022). Similar to Signet, the company noted that it is expecting \u201cthe most weddings in decades,\u201d citing 2.5 million weddings expected in the US this year. For context, this compares to about 2.1 million weddings per year on average over the last decade, according to US government data.<\/p>\n\n\n\n

The US accounts for approximately half of global diamond jewellery demand, according to Paul Zimnisky estimates.<\/p>\n\n\n\n

\u2013
Paul Zimnisky, CFA is an independent diamond industry analyst and consultant based in the New York metro area. For regular in-depth analysis of the diamond industry please consider subscribing to his State of the Diamond Market<\/a>, a leading monthly industry report; an index of previous editions can be found here<\/a>. Also, listen to the Paul Zimnisky Diamond Analytics Podcast<\/a> on iTunes or Spotify. Paul is a graduate of the University of Maryland’s Robert H. Smith School of Business with a B.S. in finance and he is a CFA charterholder. He can be reached at paul@paulzimnisky.com<\/a> and followed on Twitter @paulzimnisky<\/a>.<\/em><\/p>\n\n\n\n

Disclosure: At the time of writing Paul Zimnisky held a long position in Lucara Diamond Corp, Star Diamond Corp, North Arrow Minerals Inc, Brilliant Earth Group and Barrick Gold Corp. Please read full disclosure at www.paulzimnisky.com<\/a>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

While a repeat of 2021 is unlikely, a record number of weddings in the US are expected to drive diamond jewellery sales in 2022, surmises New York-based diamond industry analyst Paul Zimnisky. Following the onset of the pandemic, a sharp decline in consumer discretionary travel and entertainment spend served as a boon to the diamond…<\/p>\n","protected":false},"author":7,"featured_media":15015,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[107,79],"tags":[],"thb-sponsors":[],"class_list":["post-15014","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-retail","category-viewpoint"],"acf":[],"yoast_head":"\nUS Consumer Diamond Demand In 2022 Is Poised to Remain Resilient - Solitaire magazine is a International jewellery magazine - India\u2019s leading B2B gem and jewellery magazine<\/title>\n<meta name=\"robots\" content=\"index, follow\" \/>\n<meta name=\"googlebot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta name=\"bingbot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/gjepc.org\/solitaire\/us-consumer-diamond-demand-in-2022-is-poised-to-remain-resilient\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"US Consumer Diamond Demand In 2022 Is Poised to Remain Resilient - Solitaire magazine is a International jewellery magazine - India\u2019s leading B2B gem and jewellery magazine\" \/>\n<meta property=\"og:description\" content=\"While a repeat of 2021 is unlikely, a record number of weddings in the US are expected to drive diamond jewellery sales in 2022, surmises New York-based diamond industry analyst Paul Zimnisky. 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