By Abe Sherman, CEO BIG
The past two weeks have provided me with enough topics to write about for the next few months – and I will. But this one is about the various reactions to the news of the Lightbox launch and how some of the retailers and suppliers think that De Beers is cannibalizing their own product (natural diamonds) or that they are screwing the industry (as one woman shouted out during the De Beers presentation at JCK) by selling directly to consumers as the first step in their Omni-channel distribution plans.
Let me say right up front that those companies who have gone all-in on synthetics, who are understandably upset that their world has been rocked, should have seen this coming, especially the growers. They know what synthetic diamonds cost to produce and they have dug their own holes regarding the wholesale and retail “value” of their goods, which they are now trying to dig out of. (I’m going to write about the production costs of synthetics in another newsletter – since one of the sales reps challenged me to do that – it’s an interesting topic).
Note to Lab-Grown Manufacturers – This is Your Own Fault
To the manufacturers of synthetic diamonds, who tied your wholesale prices to the prices of natural diamonds, this is your fault. For those of you who have had your synthetic diamonds graded as if they deserve the same value determinations as a natural diamond, this is your fault. For those of you who have told your customers that lab-grown diamonds are a) not synthetic, and b) identical to natural diamonds, I’m sorry, but this is your fault.
De Beers, through its Element Six division knows more about growing synthetic diamonds than anyone else in the world (even you Tommy Boy) and I doubt very much that producing this material for jewelry had entered De Beers’ minds until you all entered the marketplace with your bogus claims and overpriced material. You have no one else to blame but yourselves.
So, stop it already. Please. Stop telling the jewelers that: 1) Lightbox LG diamonds are brown
2) They won’t be able to keep up with production 3) They are only selling Lightbox directly to consumers 4) De Beers is running out of diamonds so they had to do this 5) There is no way they can grow them this cheaply 6) They are opting not to provide grading reports because of poor quality 7) Lightbox won’t be able to consistently produce the qualities they have already demonstrated 8) This is just a publicity stunt. Just stop it.
Shock and Awe
I have been writing about synthetic diamonds over the past few years and, although I had no idea that De Beers would use an all-out assault on the rhetoric spewed by synthetic growers and sellers, the result is the battle should be over. This was simply a rout on all fronts but instead of hearing that the synthetic diamond companies will a) lower their prices immediately, and b) stop the nonsense that they are the same as natural diamonds, they appear to be doubling down. Denials about the quality of Lightbox goods, about Lightbox’s production capabilities, about them selling directly to consumers to screw the industry, about… well, everything, at this point is embarrassing. My problem is, the retailers are parroting this drivel.
Pink, blue and white CVD lab-grown diamonds up to 1.00ct at $800ct retail (plus the settings), period. As of September, that will be the market and any consumer looking for an alternative to a natural diamond will be aware of these goods and their prices. Soon after the consumer launch, I am hoping Lightbox is made available to retailers throughout the US, offering lab-grown diamonds at realistic prices. Anyone selling lab-grown diamonds today must take this information into consideration regarding how they represent the goods they are selling and how much they are selling for. Insofar as how to deal with customers who have already purchased lab-grown at high prices, I remain open to ideas.