Diamonds Are Q1’s Worst Friend
Bling not in little blue boxes is looking to a lackluster Q1. Blue Nile , an online jewelry retailer, saw its stock fall 12 percent just after the company announced that it was expecting a weaker quarter.
The company expects a dip in stock price of 14 to 16 cents, the company’s president and CEO Diane Irvine told me this morning on “Worldwide Exchange.”
The drop comes despite today — Valentine’s Day — and the engagement season effect, when consumers buy up diamonds in record numbers before popping the question
“As we looked at January in the entire industry, things were little soft, which means that consumers are coming out of Christmas feeling like they're going to take a break,” Irvine explained.
Despite disappointing figures so far, Irvine remains optimistic. “We had a record fourth quarter in the holiday season. We're thrilled with that,” she said. “It’s been a busy week at Blue Nile.”
Demand for precious gems is still pretty high — 38 million carats worldwide, to be exact — and the competition among diamond retailers is intense. With behemoths like DeBeers controlling 40 percent of the global diamond market, Blue Nile seeks an edge online. The company sells at 30 to 40 percent lower than jewelry price and offers special perks, especially this time of year, including free shipping and lists to guide shoppers to the perfect gift.
“What happens to consumers is high quality as well as fantastic pricing,” Irvine said. “They want to be smart shoppers.”
Jewelry retailers have also seen a bump from “that ring” — the sapphire and diamond sparkler that was formerly Princess Diana’s, now Kate Middleton’s, and is the engagement ring du jour for couples the world over.
Irvine brought a 20-carat sapphire ring from the company’s own collection on set with me, saying that sapphire ring sales have been up since the royal announcement. Worth more than $100,000, the one she showed me comes with its own security staff. Searches for sapphire rings on the Blue Nile website have increased, leading the company to feature products to capitalize on the demand.
“There will be a lot of Happy Valentine's Day gifts being delivered today,” Irvine said. I mean, what says "I love you" more than some online ice?!
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