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Diamond Gems Weekly - May 13

Updated: May 14

Top 10 thoughts about the diamond market...


1. Here’s a little confession. In all my years covering the diamond industry, attending conferences and trade shows, I never made it to Geneva for GemGenève or the Sotheby’s and Christie’s Magnificent Jewels auctions. They’re still on my bucket list!

 

2. GemGenève is a relatively new event on the industry calendar, but it has become an important feature, especially since the Baselworld show shut its doors. GemGenève was able to fill in where Baselworld was severely lacking by creating a sense of community. All content today is about building community. And yes, trade shows are as much about content as anything else. Read about the event, which closed on Sunday, in this report by Jewellery Outlook.

Image: GemGenève


3. Now onto the auctions where yellow diamonds are featuring as the top lots at both Sotheby’s and Christie's.

Image: Sotheby's

The Yellow Rose, a 202.18-carat, fancy-intense-yellow, SI1-clarity diamond, which will go under the hammer at Christie's, where it is expected to fetch more than CHF 4 million ($4.4M).


Image: Christie's

A 101.29-carat, fancy-vivid yellow diamond mounted in a brooch by Cartier to be sold at Sotheby's. It carries a pre-sale estimate of CHF 5.6 million to CHF 6.5 million ($6.2M to $7.2M).


It always fascinates me how these high-end pieces transcend market conditions. They truly are a market unto themselves, and yet play such an important role in stimulating desire for diamonds.


4. Speaking of public relations, the Met Gala showcased a garden of creativity, as always… check out this report about the jewels on display from W Magazine.    

 

5. Staying with the high-end, we’ve seen some interesting merger and acquisition activity in the segment. Richemont agreed to acquire Italian jewelry brand Vhernier for an undisclosed amount, adding to its jewelry portfolio of Cartier, Van Cleef & Arpels, and Buccellati.  And Watches of Switzerland signed a deal to buy Roberto Coin’s US business for $130 million.  

 

6. Brilliant Earth reported its first-quarter results, with sales edging down 0.7% to $97 million, in line with its guidance. Total orders rose 14% to 40,525 while the average order value fell 12% to $2,402. One feels that Brilliant Earth is still the test case regarding whether one can generate a premium by highlighting sustainability in diamond jewelry.  

 

7. De Beers CEO, Al Cook, meanwhile, gave some revealing insights to his company’s approach to marketing in an interview on the ‘The Jewelry District’ podcast by JCK Online. He foresees a strategy in which partnerships with retail jewelers drive its campaigns in both the US and China. The episode is well worth a listen.

 

8. Mining companies could do with a category marketing approach as they remain under pressure. Mountain Province saw 1Q revenue decline 31% to CAD AD 89.4 million ($66.1 million) and net profit slide 76% to CAD 6.8 million ($5 million) amid a 29% drop in its average price achieved. Lucara Diamond’s 1Q sales fell 4% to $41.1 million, with CEO William Lamb noting some stability, but also “cautious sentiment due to the broader macroeconomic climate of high inflation and interest rates impacting consumer demand in certain regions.”

 

9. There remain deep concern about cannibalization of the natural diamond market by lab grown. In a somewhat expected move, De Beers’ Lightbox brand lowered its prices and raised its quality disclosures. Check out my thoughts here on the decision and on comments about synthetics made by the CEO of Helzberg Diamonds.

 

10.   Don’t think that the issue of sanctions on Russian diamonds, and their implications for the trade, has gone away. A Reuters report suggested that the European Union plans to exclude grandfathered goods from its sanctions measures. Perhaps that will ease its tensions with the trade. One senses that a lot is happening behind the scenes on this issue, with a difference in approach between the US (and the industry) and the EU as to how to implement the proof-of-origin system scheduled for September 1. As a side note, The Kimberley Process intersessional meeting is taking place this week in Dubai, with the DMCC hosting a forum on Provenance, Transparency, Technology on Thursday, May 16.

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