Even before the new virus triggered the Covid-19 pandemic, diamond prices and demand were weak. Global economic weakness has exaggerated that and Anglo American’s De Beers unit last week reported a plunge in earnings.
Some of the many small players who polish the rough diamonds that De Beers and other miners unearth say they have been pleasantly surprised by the extent of lockdown jewellery-buying as enforced proximity kindled romance and feel-good spending.
South African cutting and polishing firm Nungu Diamonds said its custom-made jewellery sales have grown 60% since South Africa imposed a strict lockdown in March.
Customers used their weeks at home for online consultations and were lining up for their purchases when stores reopened in June, the company’s founder Kealeboga Pule said.
“We remain resilient. We fight on,” Pule said at his shop in a Johannesburg suburb. June was the best month in a year, he said, with sales including engagement and wedding rings.
Bucking the trend of rising unemployment, Nungu has hired an in-house jewellery designer – joining a team of 5 polishers and 9 jewellers.
Nungu says jewellery prices have held steady. Profit margins, however, could improve as lower global demand has depressed the prices of uncut, unpolished rough stones bought from the mines.
Thoko’s Diamonds, another South African company whose business was based on selling rough and polished stones, said it was turning to jewellery.
Zipho Dlamini, co-owner of Thoko’s Diamonds, said in a typical year the family business would supply more than 500 carats.
So far this year, the company had sold less than 20 carats and profits have fallen 65% as the exports that account for more than half of its business dried up.
Thoko’s hopes its new line in earrings will appeal to the local market.
“Because of Covid-19 we have managed to move into the jewellery space,” Dlamini said.