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Diamantaire’s Letter Outlines The Pandemic’s Impact On Diamond Manufacturing; Begs Patience October 19, 2020 (0 comments)


New York, NY—Welcome to the new normal of diamond manufacturing. In an essay to clients and the industry, Hertz Hasenfeld of Hasenfeld-Stein (left) outlined how much things have changed for his and other diamond companies since the global pandemic hit. Although retail business is clearly on the rebound, manufacturers are still dealing with the domino effect that the pandemic has had on supply and labor. Hasenfeld-Stein, for example, is just now able to offer new stones that started their cutting journey in March. 

“As soon as the worldwide lockdowns began in March, we decided to buy several boxes of fine rough ranging from 1 carat (yielding .40s and .50s) up to 15 carats (finishing at 5 carats). The DTC was more favorable with their rejection allowances (30% vs. the usual 10%) allowing us a more specialized production. Indeed, you will be seeing lots of Black Label and Triple-Excellent Rounds, as well as FireCushions in all sizes from 1 to 3 carats in quantities rarely seen before,” he wrote.

What the firm was not prepared for, however, is the really long and expensive journey that has become the new norm. 

“We normally mark and laser-saw our rough in New York, which represents all of the major decision making determining the fate of the rough. The large stones, like Exceptionals, are finished in New York. For the 2 carats and smaller stones, the rest of the cutting process is done in our factories in Qingdao, China, and India. We had all the shipping and timing down to a very predictable science – up to February 2020 BC (Before Corona). That’s when everything stopped,” he said. 

“Flights were cancelled at the last moment, many carriers refused to take valuables, since they were uncertain when the flight would finally arrive in Qingdao, China. India was completely closed for months.” Manufacturing that usually took 6-8 weeks, now take 5-6 months and shipping costs have risen by over 400%.

Now, says Hasenfeld, just as America is starting to re-open, the company is starting to receive stones back from the Forevermark Diamond Lab, and GIA.

“We made a bet in March that America would come back in time for the [holiday] Season, and, based on all the conversations with our closest clients, I’m still very comfortable with that bet,” he wrote. But he asks clients one last favor: please don’t give companies a hard time over a few percentage points of price. 

“We went to extraordinary lengths and expenses to have these diamonds ready for you now; we need to recoup some of those expenses.”

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