Diamond Sales Less Than Dazzling
STEVE INSKEEP, host:
The diamond industry might need a little dynamic pricing. The diamond company, De Beers says profits dropped an astonishing 99 percent in the first half of this year. Antwerp, Belgium, is Europe's diamond capital. And Teri Schultz takes a look how that city is holding up.
Mr. JOHANN DUFF: We are pleased to welcome you aboard the Antwerp diamond bus.
TERI SCHULTZ: Driver and guide Johann Duff(ph) says boom years or bust, the tourists he ferries around on the Antwerp diamond bus always want to know the same thing.
Mr. DUFF: Where they can find the best bargain, that's the question they ask most.
SCHULTZ: This summer might be a great one for bargain hunters as diamond dealers try to lure in buyers to make up for a slump in sales of 20 to 30 percent the first half of this year. That's significant for Antwerp's economy, as 80 percent of the world's rough diamonds and half of all polished stones pass through this city.
Ron Alichikoff(ph), whose family has been in the business for generations, says it's been a tough year, but that he's managed to survive by selling more small pieces.
Mr. RON ALICHIKOFF: You know, people still get married so they buy a half a carat diamond for their fiancés, but the big items, they're just finished. People don't buy them anymore.
SCHULTZ: The fact that dealers have been left with large stocks of expensive stones has caused major problems with liquidity. Though low on cash, dealers didn't want to sell the gems at a loss, and banks didn't want to extend them any more credit. Pressed by Antwerp's central diamond representative, a group of international banks has now agreed, for the first time, to take diamonds as collateral for new loans.
But that's only a stopgap measure until sales improve. Window shopping with a friend, Swiss student Carolyn Fry(ph) wishes she could contribute to Antwerp's economy after falling in love with a diamond ring.
Ms. CAROLYN FRY: Eat bread and drink water and yeah, then it works.
SCHULTZ: Back on the diamond bus, Johann Duff reveals the answer to that eternal question of just where to find the best deals.
Mr. DUFF: No idea. As a bus driver, I don't have enough money to buy diamonds, so...
SCHULTZ: For NPR News, I am Teri Schultz in Antwerp, Belgium.
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