When moissanite was first introduced, about ten years ago, I was among the skeptics. It was billed as a diamond-imitation, but it wasn’t as cheap as a cubic zirconia, and didn’t have the cache of being an actual diamond, like lab-grown diamonds. It wasn’t even a natural stone.
But moissanite surprised me, and many others. It reinvented itself as a fashion item aimed at female self-purchasers that didn’t rely on its resemblance to diamonds. In 2004, JC Penney picked it up, followed by big names like Helzberg’s and Finlay, and sales soared. It was touted as a success story.
And now it’s a few years later, and we are looking at a troubled company. Its CEO has resigned, it’s in a legal fight with a former manufacturer of its product, sales are down, and it faces delisting from NASDAQ. (Here is a good summary of the company’s current options.)
What went wrong? Here is some of the main chatter:
– Moissanite’s growth spurt led to some over-optimistic projections. Production increased too rapidly. This became a particular problem when some majors who tested moissanite decided not to go with it.
– The marketing, while sometimes effective, was inconsistent. Moissanite still has low public awareness.
– Some think moissanite may have done well being sold direct to the consumer online.
– It was a fashion item. And, like most fashion items, it ran its course.
And now, moissanite is trying to turn itself around again. The company has called in consultants and is trying to rechart its course. The problem– and this goes for all the troubled companies we discuss here – is this is a particularly bad time for any company to turn itself around.
In this environment, the best hope may be if moissanite is sold as a value product, at lower price points (a big issue – many people say it’s too expensive.) What do you think?