De Beers ends lab-grown diamond experiment

De Beers is ending its six-year venture into lab-grown diamond jewellery, retreating from a market it once tried to dominate with its Lightbox brand. This move aligns with De Beers' renewed focus on promoting natural diamonds as it prepares for separation from Anglo American Plc. The synthetic diamond market has significantly impacted prices, but De Beers aims to regain its position by emphasizing the unique allure of natural stones..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here..By Thomas Biesheuvel.De Beers will ditch a controversial experiment to sell lab grown diamond jewelry, ending a six-year program that broke one of its oldest taboos. .___STEADY_PAYWALL___.While the company long held the technology to make synthetic gems, it always refused to sell them as jewelry, fearing they would undercut the allure of natural stones. Yet as man-made stones gained traction and started competing directly with natural diamonds, De Beers launched its own jewelry brand in 2018..The company introduced Lightbox to sell synthetic diamonds at a steep discount to rival producers in an attempt to drag prices lower and create a clear divide in consumers' minds. Now it's pulling that offering, as De Beers Chief Executive Officer Al Cook overhauls a business that's set to be cast adrift by owner Anglo American Plc. .As part of a turnaround plan to fend off an approach from BHP Group, Anglo last month said it planned to sell or separate De Beers, ending an almost century-long relationship with the industry's most famous name. As De Beers — which coined the slogan "Diamonds are Forever" — prepares for that split, it will renew its focus on promoting natural stones..Photographer: Lam Yik/Bloomberg."We know how to do it and we're coming back," CEO Cook said in an interview. "All of this comes together under a big theme of differentiating natural diamonds from lab grown.".Synthetic diamond prices have now collapsed, though how much of that is down to De Beers and how much is because of a flood of new supply is open to debate. That undermines the logic for the De Beers venture, with wholesale prices of lab grown diamonds now lower than those of Lightbox, which were well below the going rate when first introduced. .Still, while synthetic diamond prices have collapsed, they've caused significant collateral damage. Natural stones used in cheaper 1 to 2 carat wedding rings have tumbled under pressure from synthetics and have so far shown little sign of a sustained recovery. .Read more: 🔒 Anglo ditches De Beers in a tough blow to struggling diamond market.De Beers will not immediately stop selling its Lightbox stones. It will use up its existing inventory — which will take about a year — and then make a decision on what to do with the business. .Industry participants are still divided on what the long-term impact of synthetics will be and how much of the current diamond industry weakness is cyclical, rather than a structural change, partly brought about by lab-grown alternatives. .High pressure high temperature (HPHT) synthetically produced diamonds sit on display at De Beers Technologies research laboratory in Maidenhead, U.K., on Tuesday, June 30, 2015. About 360,000 carats of man-made gems were produced last year, compared with 126 million carats of natural diamonds. Photographer: Chris Ratcliffe/Bloomberg.Unlike imitation gems such as cubic zirconia, diamonds grown in labs have the same physical characteristics and chemical makeup as mined stones. They're made from a carbon seed placed in a microwave chamber and superheated into a glowing plasma ball. The process creates particles that can eventually crystallize into diamonds. The technology is so advanced that experts need a machine to distinguish between synthesized and mined gems..Read More: Anglo Ditching De Beers Is Hard Blow for Troubled Diamond Market.De Beers will turn its focus on so-called category marketing, where it promotes diamond jewelry in general rather than just its own branded gems. It will also expand its retail footprint through its own jewelry stores..The company will also dip its toe into polishing its own stones, part of the industry dominated by mostly family run firms in India and Belgium..De Beers is targeting annual core profit of $1.5 billion by 2028. Last year, the business made just $72 million, though traditionally its profits have ranged between $500 million and $1.5 billion as the diamond industry swings from boom to bust..That volatility created frustration within Anglo, where years of erratic performance eroded returns from more coveted commodities, such as copper..Read also: .🔒 Anglo ditches De Beers in a tough blow to struggling diamond market🔒 Diamonds in the rough: The FT chats to De Beers CEO Al Cook🔒 De Beers' fate hangs in the balance after BHP bid for its owner Anglo American.© 2024 Bloomberg L.P.

De Beers ends lab-grown diamond experiment

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