"We'll never do that." DeBeers

[Ibrakeforpossums]

Lightbox Now Selling Lab-Grown Diamond Engagement Rings

<p>Lightbox, the De Beers-owned lab-grown diamond brand that once maintained its products should be limited to “fun fashion” rather than romance, is now selling engagement rings. At press time, the Lightbox homepage spotlighted a 2 ct. lab-grown diamond solitaire engagement ring for $2,300 and a...

www.jckonline.com

 

[Karl_K]

They will enter the ER market for the same reason the full service vendors have.
It's where the customer growth is at.

 

[Ibrakeforpossums]

I enjoyed the statements and pledges that Rob Bates dredged up from 2018.

 

[denverappraiser]

It's good to be the king.

 

[oncrutchesrightnow]

And overpriced, to boot.

 

[Ibrakeforpossums]

Pricey and not half as interesting as the stuff you find.

 

[yssie]

Manifesto promises

 

[FL_runner]

Never say never, eh?

 

[finerthings]

I think that De beers selling labgrown diamonds, especially in the engagement ring area, works against them. In my mind De beers stands for naturally mined diamonds, and I think it does them a disservice to sell both. Diamond engagement rings and fine jewellery are an emotional purchase, and I think for those splurging on these items they probably want the real deal and will pay for the premium. However, I'm probably wrong and in the end most people just want something sparkly on their finger... go figure. I'm old school what can I say.

 

[Mrsz1ppy]

It's good to be the king.

Yes, and learn about vertical integration in B school. Just was at their Madison Average store as a student, and their prices are crazy. But the SA was sure to emphasise that they offer every color of stone, unlike the Main Street stores.

 

[Ibrakeforpossums]

What stores are those, Mrsz1ppy?

 

[Lisa Loves Shiny]

It would be a good idea for them to sort out the details in their listings. They have a 6 prong, 2 carat solitaire pictured with a description of a 4 prong solitaire. Those details matter to buyers.

2ct. Solitaire Engagement Ring | Lightbox Jewelry

Hand crafted in 14k gold with rhodium plating to protect against scratches, the six prong setting cradles a VS clarity, Very Good cut and Near Colorless stone.

lightboxjewelry.com

Edit: Wanted to add that you see the discrepancy when you open the tab for product details.

 

[Ibrakeforpossums]

Since 2018 they've maintained that they're all the same uniform quality so details don't matter (!?!). DejaWiz did a great post on how to persist in finally getting a good one from Lightbox. Lots of returns.

 

[GemView]

And overpriced, to boot.

Agreed.

I have a contrarian perspective on lab-grown vs. earth-mined diamonds. Most of the guides on lab grown diamonds warn that lab grown diamonds should not be considered an investment as the prices will drop over time as more lab diamonds enter the market. However, even earth-mined diamonds are technically not all that rare in comparison to other gemstones. Consequently, I doubt De Beers will undermine their own cartel be it earth-mined or lab created. I suspect they are positioning themselves to replace the headaches associated with sourcing conflict-free diamonds with lab grown, and that lab diamond pricing will ultimately match we now associate with earth-mined diamonds.

There are pros and cons to this, of course. A PriceScope article on lab grown diamonds points out that it takes more fossil fuel energy to produce lab grown than to mine them (similar story on electric vehicle production but that hasn't dampened enthusiasm for the EV transition). Earth-mined diamonds provide income sources to residents in poorer countries (i.e. Africa), which stands to fall into decline as consumers seek out "conflict-free" and "eco-friendly" alternatives. (This is speculation on my part but more poverty in Africa as diamond mining jobs dry up will probably lead to more conflict, not less.)

It was news to me in reading the PS piece that the FTC has apparently warned lab diamond producers/sellers not to claim they are sustainable due to the enormous energy requirements to produce them — but for better or worse the public perception of cheaper and more earth-friendly has already been set. IMHO, it is unlikely the lab-grown diamond trade will slow down, so my bet is that lab-grown prices — even if they are readily available and theoretically should become cheaper over time — will rise as the availability/demand for earth-mined diamonds declines among middle class consumers. In other words, lab-created diamonds will become the new earth-mined diamonds. Positioning them as cheaper relative to earth-mined diamonds in the early stages is just a means to an end to build up demand after which they will command higher prices.

 

[Mrsz1ppy]

What stores are those, Mrsz1ppy?

DeBeers said unlike other jewelry stores, they offer D-Z colored stones. Sorry I wasn’t clearer. Travel brain fog!

 

[oncrutchesrightnow]

@GemView That’s an interesting take. I don’t quite agree that LGD will ever cost as much as EGD but you make a good point that once the mine production goes way down, LGD prices may go back up, or at least stop decreasing. But I have also heard that the real competition is LGD used in computers, and jewelry is just the byproduct/cash flow solution that supports that industry, in which case so long as there is tech competition, then LGD prices could continue to decrease.

@finerthings and @Mrsz1ppy You both make good points.

What I can’t understand is how DeBeers and other companies miscalculated so badly. Because even though some people do on occasion want an earth diamond for sentimental reasons, it seems like the most common response to LGD has been “Happy-happy-bling-bling-bling!!!” It’s almost like the industry forgot diamonds are pretty. And even the less than spectacular LGD often look better than the maul jeweler SI3 stuff.

I wonder if that’s why certain vendors became early adopters of LGD. Those vendors were used to making $$$ based on how pretty their specialty cut diamonds were or their signature settings that held big rocks, so when they recognized that LGD look exactly the same as EGD, they got on board early. They recognized that there was a big market for people who wanted the Fill in Vendor Name Here setting that held a three carat diamond or the Fill in Other Vendor Name Here specialty cut that cost two to three times as much as a regular cut.

Anyway, regardless of why the early adopters did well, it’s still astounding that the big companies seem to have miscalculated. A year ago you could have said DeBeers was playing 12-dimensional chess but now it looks a lot more like catch up.

 

[Garry H (Cut Nut)]

A couple of comments:
1. Hard to find any connection to De Beers on Lightbox website - the avg punter would be unlikely to make the connection.
2. The impact of grown diamonds on natural prices is more complex than most people consider. Larger grown diamond prices still have a very long way to fall because it is cheaper to grow and polish a 4ct than 4 one carat stones or 8 half caraters.
Some natural diamond prices are falling too. But which natural diamond prices are falling?
There have been Covid downs and Putin ups etc, but look at the long history of prices recorded from a large data base on PriceScope
Since 2007 there has been a 42% rise in +4ct prices while <1ct have dropped about 10% in 15 years.
WHY?
People who want REAL luxury are still paying top dollar for larger diamonds.
Many consumers who were going to buy a diamond for under $10k opted for a +2ct LGD.
A majority retailers are stocking up on grown diamonds and running down their natural inventory natural diamond prices. They will regret this mistake.
As Paul Zimnisky points out: “a lower price point could discourage retailers from offering the product as an alternative to a traditional (solitaire) natural diamond out of fear of top-line revenue destruction”.

 

[dvj]

And overpriced, to boot.

What is crazy is that De Beers lightbox used to be the most inexpensive lab grown diamonds. Remember when some people in the trade were upset that they brought all the prices of other lab grown diamonds down? Since that time they haven’t adjusted their prices as the market has changed.

 

[Ibrakeforpossums]

It's getting even more interesting.

Lightbox Engagement Rings Are De Beers’ Biggest Gamble Yet

<p>Out of the blue, De Beers’ lab-grown diamond brand, Lightbox, began selling engagement rings on its website last Thursday. Unlike the carefully choreographed 2018 Lightbox launch, De Beers never made an announcement or issued a press release in advance. The engagement rings just appeared on...

www.jckonline.com

 

[DejaWiz]

It's getting even more interesting.

Lightbox Engagement Rings Are De Beers’ Biggest Gamble Yet

<p>Out of the blue, De Beers’ lab-grown diamond brand, Lightbox, began selling engagement rings on its website last Thursday. Unlike the carefully choreographed 2018 Lightbox launch, De Beers never made an announcement or issued a press release in advance. The engagement rings just appeared on...

www.jckonline.com

Completely counter-intuitive approach to pricing their DERs, in my opinion. The LGD segment for lab graded LGDs has already surpassed BeBeer's price points for their non-graded offerings and now they are charging hefty sums for the settings...
They've failed from day one of offering DERs, in my opinion.

 

[Garry H (Cut Nut)]

Maybe not in Mum and Pops corner store where they have a hangover of grown diamonds they bought at half the cost of natural stones and they are tryi6to get 3 or 4 times markup?

 

[Mrsz1ppy]

I think most legacy jewelers had large inventories of natural diamonds, so didn’t want to jump on the lab grown for fear of increasing losses from sunk costs. My understanding is that consumers have driven the demand and subsequent adaptation by some traditional jewelers.

 

[Garry H (Cut Nut)]

I think most legacy jewelers had large inventories of natural diamonds, so didn’t want to jump on the lab grown for fear of increasing losses from sunk costs. My understanding is that consumers have driven the demand and subsequent adaptation by some traditional jewelers.

One survey says 72% of retailers in USA are selling grown diamonds.

 

[DejaWiz]

One survey says 72% of retailers in USA are selling grown diamonds.

Wow...that's far and above what I would have guessed at 25-33%!

 

[Alybetter]

I remember not that long ago reading a sort of editorial on WF about why they won’t ever sell lab diamonds. Does anyone else remember that??

Not that I’m denigrating WF, I’m a two time customer of theirs and everyone I’ve dealt with has been amazing.

Just funny to see how the tides can turn.

 

[DejaWiz]

I remember not that long ago reading a sort of editorial on WF about why they won’t ever sell lab diamonds. Does anyone else remember that??

Not that I’m denigrating WF, I’m a two time customer of theirs and everyone I’ve dealt with has been amazing.

Just funny to see how the tides can turn.

I'm going to speculate and say that I don't think there's a jeweler in existence that hasn't said/thought that at some point.

[edit]
Here's a nice example of a comment I recall that Rockdiamond posted a while back:

How do Lab vs Earth mined Diamonds retain value- or trade up?

@DejaWiz You- and many of the consumers reading this possess knowledge so far beyond that of the typical consumer. So imagine we’re speaking about of average consumers. I was speaking of how LG’s force questions...... I realize that I really don’t like the word “Synthetic” to describe the...

www.pricescope.com

 

[Alybetter]

I'm going to speculate and say that I don't think there's a jeweler in existence that hasn't said/thought that at some point.

[edit]
Here's a nice example of a comment I recall that Rockdiamond posted a while back:

How do Lab vs Earth mined Diamonds retain value- or trade up?

@DejaWiz You- and many of the consumers reading this possess knowledge so far beyond that of the typical consumer. So imagine we’re speaking about of average consumers. I was speaking of how LG’s force questions...... I realize that I really don’t like the word “Synthetic” to describe the...

www.pricescope.com

It’s almost as if (for some) man made diamonds weren’t good enough until demand became undeniable. And at that point it’s simply a matter of profit being the supreme ideal, rather than purity or provenance.

 

[Wink]

I think most legacy jewelers had large inventories of natural diamonds, so didn’t want to jump on the lab grown for fear of increasing losses from sunk costs. My understanding is that consumers have driven the demand and subsequent adaptation by some traditional jewelers.

Speaking only for myself: I disagree.

Many of us did not want to sell Lab Grown diamonds until they became reasonably priced. When they first came on. the market they were selling at 70 to 80% of the price of a natural diamond. Why would anyone buy a synthetic at that price?

I told many potential clients that if I sold them a Lab Grown at those prices, the diamond would be worth less by the time Fedex arrived the next day than it is today. Now they are much more reasonably priced and are selling like pancakes. Many of the new growers are trying to be the first one to the lowest possible price, which is good for the buyers, or maybe not.

What's this you say, lower prices not necessarily good? Why yes. not all are created equal in the Lab Grown world. Some are so poorly cut they look like diamonds cut in the 50's and sixties, back before cutting became moderately important to educated buyers.

Some of the goods I looked at while at the Vegas show were just plain ugly. Some goods were magnificent. Care to guess which cost more? Care to guess which I and other smart jewelers will be carrying? (Hint, it will NOT be the cheapest on the market!)

I was looking at diamonds at the site of one of my competitors last evening. They had precision cut diamonds at prices I thought were very reasonable. They also had run of the mill cut diamonds at prices far below the precision cut diamonds. It makes me sad to know they will probably sell more of those than the precision cuts, simply because so many of their clients will be buying only on price, not knowing the price they will be actually paying is too high for something with no beauty.

 

[Wink]

RE Sustainability:

In Vegas we met with several growers that have received various accreditations for handling sustainably produced diamonds via both wind and solar power. There are some companies that do care and they are doing what it takes to produce sustainably. Kudos to them!

 

[Mrsz1ppy]

Speaking only for myself: I disagree.

Many of us did not want to sell Lab Grown diamonds until they became reasonably priced. When they first came on. the market they were selling at 70 to 80% of the price of a natural diamond. Why would anyone buy a synthetic at that price?

I told many potential clients that if I sold them a Lab Grown at those prices, the diamond would be worth less by the time Fedex arrived the next day than it is today. Now they are much more reasonably priced and are selling like pancakes. Many of the new growers are trying to be the first one to the lowest possible price, which is good for the buyers, or maybe not.

What's this you say, lower prices not necessarily good? Why yes. not all are created equal in the Lab Grown world. Some are so poorly cut they look like diamonds cut in the 50's and sixties, back before cutting became moderately important to educated buyers.

Some of the goods I looked at while at the Vegas show were just plain ugly. Some goods were magnificent. Care to guess which cost more? Care to guess which I and other smart jewelers will be carrying? (Hint, it will NOT be the cheapest on the market!)

I was looking at diamonds at the site of one of my competitors last evening. They had precision cut diamonds at prices I thought were very reasonable. They also had run of the mill cut diamonds at prices far below the precision cut diamonds. It makes me sad to know they will probably sell more of those than the precision cuts, simply because so many of their clients will be buying only on price, not knowing the price they will be actually paying is too high for something with no beauty.

Thank you for sharing your point of view. I am here to learn, and really appreciate the posters from the trade who take the time to educate me.