The diamond jewellery business was already a pariah after Nirav Modi’s shenanigans. Now the virus scare has brought business to a standstill.
Lost sparkle: A diamond jewellery showroom in Jaipur.
Kothari’s KGK Diamonds, established in 1905, has branches in 20 countries and employs over 10,000. Also the owner of the Entice retail brand, Kothari says: This time economic uncertainty has been made worse with a health scare… There is total uncertainty about the future and unless things improve in a few months, we’re heading for a collapse.
For banks, the diamond and jewellery trade is already a pariah after the daylight robbery of Punjab National Bank by Messrs Nirav Modi and Mehul Choksi. Also, Kothari’s business is trade-heavy, and the flight restrictions and visa cancellations have brought business to a virtual standstill. Online transactions won’t save the day because employees have to get to the factory to work. And we have been advised by the government to scale down operations or shut down premises.
Retail is a very small fraction of his main business, which is wholesale trade of diamonds, but it gives us an indication of market trends. The jewellery business is down to a fourth in just a month, says Kothari.