“De Beers thinks that it’s new Lightbox laboratory diamonds will not harm the sales of cheaper diamonds, which are mostly used in fashion jewelry,” says CEO Bruce Cleaver.
“I have already heard this discourse, mainly coming out of India,” says Bruce Cleaver. “In my opinion, a large amount of small goods is used in all kinds of products, such as watches. I do not really think that a blue or pink diamond of one carat is in competition with mêlé stones. They rather compete with moissanite and cheap rubies or emeralds. I do not think there is cannibalization at this level.”
Of course, Lightbox, which will offer its first jewelry with laboratory diamonds online in September, will also offer white diamonds, but Bruce Cleaver believes that customers are more attracted to blue and pink laboratory diamonds.
“Fashion goes for color, so we focus on color,” he says. “In our research we discovered that this is what customers want.”
According to him, the company will eventually add other colors to the range of laboratory diamonds, such as green and yellow.
“We can handle everything,” he says.
At the same time, he believes that De Beers will continue to communicate with the sector about it’s Lightbox projects and he mentions recent speeches he has given in India and Belgium, as well as ongoing discussions with government actors.
“Until now, the reaction was slightly better than I expected,” he says. “Some explanation is needed, but I feel that we will never spend too much time on this topic. We have invested a lot of time on this and hope to continue to do so.”
But he points out that De Beers mainly deals with natural diamonds, and recalls the recent purchase of the Canadian mining company Peregrine for 81 million USD. He also notes that the budget of the Diamond Producers Association will increase this year and that the association will expand its activities to India and China.
“We are active in the natural diamond trade, we have spent a lot of money on this activity and we will continue to do so,” he says. “The laboratory diamonds from Lightbox will be a very small division for us.”
In addition, Bruce Cleaver claims that the demand for diamonds on the US market was satisfactory in the first half of the year and that, with the exception of unforeseen political events, this trend should continue. The Chinese market also satisfies the company, he adds.
However, he has some doubts about the consequences of the numerous discussions about tariffs and trade wars.
“It seems that customs tariffs will have a limited effect on diamond activity. The diamond trade between China and the United States is very limited. If the trade wars escalate, and they would have an impact on macroeconomic issues and GDP growth, they could have a greater impact.”
In the first half-yearly financial results, announced on 26 July, De Beers reported a slight increase in revenues, to $ 3.2 billion, compared to $ 3.1 billion last year. Rough sales remained stable at $ 2.9 billion, although rough prices rose overall by 4% due to a general price increase and an improvement in the assortments sold.
“Luxury is rarity, creativity, elegance.”