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Some places conjure up fantastic images of grandeur in our heads. The Taj Mahal in India, the strip in Vegas and Rodeo Drive in LA all leave an indelible imprint on our minds. The New York Diamond District has a similar reputation. Just one city block of 47th street, the towering buildings whose street level edifices are festooned with sparkling earrings, elegant rings and flashy accessories lure tourists in by the busload and even attract New Yorkers (no small feat).
As iconic as the Diamond District is, 47th street wasn’t even the original hotspot for jewelers in NYC. In the 1800s, the jewelry hotspot was centered, coincidentally I’m sure, around Maiden Lane and Canal St, just a few blocks from Wall Street. In 1924, the New York Times stated that “the bride-to-be who could show a ring from Maiden Lane was thrice happy.”
Rising rents and other factors forced jewelers to look upwards and eventually they settled on one long block of 47th street between Fifth Avenue and Avenue of the Americas. Many of the buildings housed “exchanges” on the ground floors, where you can go from counter to counter looking at different offerings of gold, diamonds and other metals and gems. You could have your watch fixed on one counter, pick out a pair of diamond earrings across the aisle and have your emerald reset into a different ring two counters down.
The Diamond District in NYC has a special hold on me. My first job in the industry was working for Leo Schachter, one of the largest diamond manufacturers at the time. Our offices were on the corner of Fifth Avenue and my subway stop was on Sixth Avenue. Every day, to and from work, I would walk that street. Sure, I was a local and didn’t stop and stare, but to this day I still feel a rush walking down that street.
47th Street is a fascinating place. Most of the shop owners and workers are Hassidic Jews, Russians or Indians (three groups that dominate the diamond trade on the wholesale and manufacturing level as well). Walking down the street you will also notice plenty of armed guards for the shipping companies and police officers patrolling. And if you are thinking of pulling off a heist, there are plenty of undercover officers as well. You’ll also have people up and down the street paid to get you to visit one of the shops on the street.
There are plenty of cities which have diamond districts, but New York City is unique. Places like Mumbai and Ramat Gan are exclusively designed for the wholesale level of the business while Jewelers rows in Philadelphia, Chicago or London (Hatton Garden) are just there for the consumer with almost no presence of major diamond trading companies. Antwerp used to have a nice mix of both, but the diamond industry has been dying off there on both the wholesale and retail levels.
New York City, on the other hand, is one of the premier locations for consumers as well as one of the largest wholesale markets in the world. While Hong Kong has been growing in stature, the US market is still the largest, by far, for diamonds and jewelery. Virtually all of the major companies use NY as their entry point. This provides an extraordinary concentration of product into one area.
The retail and wholesale businesses seem (at least from the consumers’ perspective) to mesh together on 47th street. The most notable quirk is the language use. I remember the first time I heard an Indian guy use Yiddish terms to describe the diamond. Chazarei (crap) and Strop (a lemon) are common terms people use for bad diamonds. And you will constantly hear the phrase “mazal u bracha” (luck and blessings) when people handshake on a deal. It certainly adds flavor to the experience.
So what does this mean to you, the consumer? I mean nostalgia of a bygone era and the multinational flavor of a street like this are nice. At the end of the day, however, your goal is to get the best deal for your money. Is it a place that gives you that bang for your buck? Is it a place where you can get screwed left and right. My amazing friend Ariella joined me for a stroll through the area.
After my second secret shopping of the area, I came away with mixed feelings. To be clear, I did not find any deals that made it seem worthwhile to shop there. The few times I was shown nice diamonds, the prices did not seem to be in line with what I found on the web. I will get into specifics later, but I just couldn’t find a diamond to warrant the trip to the diamond district for this purchase.
On the other hand, I was impressed that most of the slimy tactics I saw on hand in the past weren’t being used. The last time I secret shopped the diamond district, I was helping my sister get a pair of earrings. I was overwhelmed by the amount of schemes people tried to pull. Virtually no diamonds had legitimate certification (I should note that I was buying large diamonds, not smaller diamonds where certification is not as important) and many of them appeared to be artificially enhanced without them mentioning it to me.
This time around, I was happy to see that district cleaned themselves up. The overwhelming majority of diamonds we were shown had GIA certificates. Many of the diamonds shown to us were obviously “strops” that they were trying to get rid of. But overall the quality of the diamonds were ok.
As expected, there is very little “added value” to the experience. It’s not a luxurious experience. There is no brand recognition, or upscale in-store experiences. They have one angle to sell you one: price.
What was unexpected was that the people were not as aggressive as the last time I visited the street. In fact, we were generally met with very little enthusiasm or even antipathy. Also, there were quite a few empty counters and storefronts. Even some whole exchanges seemed to have closed.
Ariella and I visited about 15 counters or shops in several of the exchanges (as well as some standalone shops). For the purpose of this article, I will focus on the three best options I found. All of them were GIA certified and excellent cuts.
The first choice was at one of the counters in an exchange. After going back and forth, they showed us a nice 1.07ct G SI2 in a pave setting for $8,500. The inclusion wasn’t particularly great (I noticed it easily and Ariella, a novice, noticed it after a little inspection), so I will try to compare apples to apples here. I found a similar setting on Blue Nile for $1,330. I added this 1.04 F SI2 from Blue Nile for comparison. Adding them together and your bill comes out to about $6,119. So you are looking at a savings of almost 30% buying online over buying here.
After wandering a bit more, we ended up in a standalone store. Here we were shown a 1.53 E SI1 in a very simple pave setting for $15,800 (after some negotiating). There was a small black inclusion, but otherwise the diamond looked fantastic. The setting was similar to this one from James Allen. Adding this comparable diamond and you’ll price out at $12,930 or about 20% cheaper.
The last shop we visited before calling it quits had some nice diamonds. The first they showed us was a 2.00 F SI1. The cut was a bit off (a little deep and the angles are off as you can see from the GIA report) but the inclusions were nice. Another issue was the medium fluorescence. The price though, was a very steep $22,000. Here is a nicer diamond from Blue Nile coming in more than $4,000 cheaper.
The other diamond they pushed very hard was a 1.65ct H VVS2 for $16,632. This diamond was actually gorgeous. But again, the price is very high. Here is an identical diamond from Blue Nile for only $13,936.
It just seems like they don’t bring enough to the table. They are not a rip-off, but you seem to be paying a premium for no added value.
The New York Diamond District is a great tourist place to visit. It’s a unique experience where you can people watch and window shop at the same time. There is something alluring to sounds of the negotiations in the exchanges. But when you get down to it, there just doesn’t seem to be much of a reason to buy a diamond there.
As we explained above, the companies were not competitive on price. Why go through the headaches of shopping around in area that has no frills and the best deal you are going to get is still 20% more expensive than you can find online. It just seems like the best way to maximize your budget would be to shop online at a reputable retailer like Blue Nile or James Allen.
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