De Beers estimates that retail diamond jewelry sales are down 2% to 3% for the first six months of the year.
Even De Beers managing director Gary Ralfe said he expected the drop to be higher, given the gloom in the market. He did say that imports into the U.S. are down 20%, mostly because most American jewelers are heavily stocked as the result of a disappointing Christmas 2000.
The disappointing figures have caused De Beers to trim its announced sales target for the year in response to the economic slowdown.
The fact that De Beers is retreating from its sales target-something which the company never had until a year ago-is something of a setback for the “new De Beers,” indicating the company is returning to its traditional policy of managing supply to prop up prices. (See “The New De Beers Meets An Old Dilemma,” July 2001, p. 102) But analysts thought the company had to make to move to preserve confidence in the market.
“We are going to undershoot [our sales target] by a considerable margin . because we do not see the recovery of the retail markets in American happening I in the next six months, before the end of the year,” Ralfe said.