De Beers: Why We’re Going Into Lab-Grown Diamonds

De Beers is jumping on the lab-grown diamond bandwagon with its own line of lab-grown diamonds, called Lightbox Jewelry.

While De Beers has long produced synthetic diamonds through its Element Six subsidiary, this is the first time it’s manufactured them for gem purposes.

In an interview, De Beers executives say that the new lab-grown brand, part of a new stand-alone company, will be marketed very differently than other man-made gems on the market:

– Lightbox will feature pink, white, and blue diamonds.

– All three colors will be sold for $800 per ct., with sizes starting at 0.25 ct. and topping off at 1 ct. That means a 0.25 ct. stone will sell for $200. That is, executives note, as much as 75 percent less than its man-made competitors. “We don’t think synthetics should be priced as inherently rare or precious things,” says David Prager, De Beers executive vice president, corporate affairs.

– The diamonds will be sold only as jewelry, not loose.

– The company is specifically not targeting the engagement market. In fact, its initial product line doesn’t include rings, only earrings and pendant necklaces, though it’s possible rings will be added eventually.

– The diamonds will not be graded, as De Beers does not feel that a lab-grown product deserves grades, since it is manufactured and replicable. However, the stones will be “at the top end of the scale,” says De Beers director of strategic communications David Johnson.

– All the diamonds from 0.2 ct. up will marked by a newly developed permanent inscription that can’t be polished off.

– For now the diamonds will be sold online at the Lightbox site only, though it plans to  have brick-and-mortar distribution eventually.

De Beers is investing $94 million in a new production facility in Portland, Ore., that will eventually produce as much as 500,000 cts. of lab-grown diamonds a year, which will translate to 200,000 cts. of polished. The stones will be polished by a “third party,” a non-sightholder in India.

Lightbox will be headed by Steve Coe, who previously served as executive director of Element Six. Sally Morrison, also a De Beers veteran, will head up marketing.

Morrison says the brand was launched because De Beers saw an opportunity in the market, based on extensive consumer research.

“When we talked to various [focus] groups, it was clear they wanted [lab-grown diamonds] to be for less serious occasions, more fashion, more fun,” she says. “Lightbox is for people who want to have an accessible fun piece of jewelry. It takes its cue from cosmetics and fragrances. It eschews the theater of the velvet box.”

Morrison didn’t see the new line as competition for natural diamonds, noting that the company sees that market as something different.

“It fits a different space, a different consumer need,” she says. “We believe that this brand is different. That’s not unfavorable. It is just something else.”

Lightbox

From Lightbox Jewelry, De Beers’ venture into lab-grown diamonds

De Beers’ name will not appear in Lightbox’s advertising, says Prager. In addition, the new brand will not be marketed as conflict-free or eco-friendly, as “we don’t agree with that positioning,” he adds.

In interviews, De Beers executives, as they have in the past, routinely disparaged lab-grown diamonds as “less precious” than naturals, leading some to detect a lack of enthusiasm in the project.

But while Prager says that “De Beers will always be a natural diamond company,” he adds, “you don’t invest $94 million in a project if you are not enthusiastic about it.”

In the past, there have been reports that De Beers would have to give the government of Botswana 25 percent ownership of any lab-grown diamond product.

Prager declined to comment on any deal De Beers has with Botswana, but noted that the country has 15 percent ownership of the product through its shareholding in De Beers.

“We have had a lot of engagement with governments about this, at the highest level,” he says. “They have been incredibly supportive.”

When asked if De Beers wants to join the International Grown Diamond Association, Morrison answered, “Why not?”

Meanwhile, the Diamond Producers Association (DPA), the industry group that has taken an increasingly antagonistic line toward lab-grown diamonds, weighed in with a measured endorsement of De Beers’ proposal. De Beers is a founding member of the DPA.

DPA CEO Jean-Marc Lieberherr said in a statement: “The DPA has always been clear that more fair and transparent practices need to be adopted by synthetic diamond producers.… It is clear from the Lightbox positioning that they will market synthetic diamonds for what they are, low-cost pretty stones, and not for what they are not—real diamonds, rare, precious, and inherently valuable.”

(Images top and above courtesy of Lightbox Jewelry)

JCK News Director

33 responses to “De Beers: Why We’re Going Into Lab-Grown Diamonds”

  1. Ha, another dirty trick? I imagine Chinese [all] MMD producers are wrangling production cost calculations today, tonight. Will Lightbox offer engagement/wedding rings? I doubt it. In any event seemingly DB is giving their blessing to diamond retailers to offer MMD. That is if they’re brave enough … smart enough?
    A consumer can buy a smart phone for $200., now they can get a quarter carat MMD for the same price. Still seems the diamond is not giving the value of a smart phone and that’s perhaps the general apathy towards diamonds these days?? … what real value?

  2. kind of interesting this follows DeBeers blockchain program of certifying diamonds through themselves. Nowhere is it stated that they need jewelers other than a nebulous “eventually brick and mortar” They are going to sell direct to consumers which is what I said their goal is for mined diamonds.

  3. This deflection on the part of Debeers is laughable.

    If it looks like a diamond…
    If it presents like a diamond…..
    If the properties are the same as a diamond…………
    The public will accept it as a diamond. Especially when they will save a bundle.

    Yes, it will look and wear great (forever) as a bridal product. This is not a polyester/wool comparison.

    • The show has passed you by. DB will feature fancy colors and great designs. Emeralds, rubies etc. will be added to their core assortment of MMS***. They will smoke slow rollers. At least in the short term. Muddy waters for all concerned.

    • So why don’t we see more synthetic sapphires in fine jewelry? Looks like a sapphire, presents like a sapphire, properties are the same as a sapphire, in the finest qualities and colors, and only trained gemologists can tell the difference, sometimes only if they’re unset… but they’re not accepted as real. They’ve been around for a hundred years, and have not taken a major market share. Natural sapphires are worth more and more year after year, in all sizes and qualities. We still see “sapphire” rings set with cracked, lead-filled hunks of blue-black opaque corundum, instead of perfectly blue transparent pieces of flame fusion sapphire, because people still see value in “natural”.
      Lab grown diamonds will be a niche market like other lab grown gemstones, and I do think there is an untapped market of self-buyers who want the properties of diamond without the hassle of value/rarity, at prices that are similar to high end designer labels. And there will still be people who will want it in their bridal jewelry.
      However, as long as the industry can still differentiate between natural and synthetic, there won’t be a collapse in the natural diamond market. Besides, most high quality stones already come with laser inscriptions and certificates to justify their value to consumers already, and blockchain doesn’t seem to be far behind.
      The biggest change to the industry will be the fall of moissanite to the rank of CZ.
      The biggest loser? Probably Charles & Colvard…
      Can’t wait to see birthstone rings set with synthetic diamonds of all colors.

      • Transparency is the word. The internet has changed everything. Lab sapphires are not the same as lab diamonds. The inclusions in a sapphire/ruby make them valuable. They prove country of origin. Books written with high resolution photos. Don’t we love that Kashmir silk? In a diamond we hope for none. Lab created gives us just that.

  4. Well, isn’t that special! Looks like De Beers is trying to buy the market and push other producers out by undercutting prices. That’a illegal in the US. They tried it with Agyle by dumping melee prices in India and lost….they will lose this one two. Fellow producers do not panic. De Beers, like other elephants have in the past, will screw this up royally. Let them have the Walmart’s of the world, I can’t wait for the show to start!

    • In most years, Tom, I would agree that Federal regulators would be all over this. However, in the current De-regulatory frenzy, there’s a strong possibility that this will be met with an official shrug. Even if they get some official challenge, I have a feeling the biggest part of the strategy is playing out already. Mainstream media outlets like Bloomberg, the Washington Post, etc. are featuring this story prominently. It IS big news, no mistake, given DeBeers’ history, but by publicizing prices, it sends a subliminal message to consumers that current lab-grown product is heavily over-priced. If this winds up torpedoing companies like yours, the Diamond Foundry and others, they will call that $94 million investment a huge success, even if they don’t sell one set of earrings.

  5. When “De Beers” have given their blessings for Lab Grown Diamonds and full endorsement , then
    that itself will be the biggest promotion for worldwide consumers to go for it.
    What is there to stop any manufacturer and retailers from selling the fast selling Engagement Rings and
    other popular diamond jewellery with MMD?
    First they participated in Retail stores and now full endorsement of MMD! Come on, jump the band wagon. Chinese and Indian manufacturers will be the biggest competitors.

  6. Just another manipulative trick by De Beers played on consumers worldwide. No matter as consumers will have plenty of choices from other manufacturers. The days of the monopoly are over. Too bad De Beers execs haven’t caught up yet or maybe not too bad?

  7. My My I can see from all the previous comments just how much De Beers I NOT LOVED by all. What a sad world for De Beers to have no friends. De Beers – there are more of us than there is of you. We will not be fool by you any more.

  8. The natural diamond industry should welcome the move. Debeers is being pre-emptive here and helping (like no other company could) to re-frame the narrative about the value proposition and proper positioning of man made diamonds in the market.

    • You are right on the money Bryan. DB sees the potential erosion to their core business MMDs are causing and wants to kill that industry (by making it unprofitable) before it can get more traction.

  9. Our good friends at DeBeers have just covered another distribution channel. DB enjoys mining enterprises site jholders with rough and lenient terms and conditions of sale, a wholesale network of rough and polished goods and entry as a direct competitor in internet retail sales. It’s great to witness the evolution of DB in reverse. ALROSA is the largest producer of rough with 396 million carats of gem quality material in 2017.. Putin booted DB out of Russia and their block chain with no oversight will flop. IBM is the leader in this technology with oversight. The Indians will not be able to maintain leadership in the cutting and polishing from who knows where the rough came from. Soon robots will cut and polish natural as well as lab lgrown knockoffs. Just go back to CZ’s if you dare or natural diamonds tampered with enhancing technology.

    The market profits will shrink in the US . Great retailers such as Costco will kill the mom and pop jewelry store. They will be able to size rings purchased from Costco. Buyers continue to be more savy and see the internet as a go to for nearly all their needs. DB is making a desperate gamble to the tune of nearly $100,000,000.00, a lot of zeroes but not a single US polisher in the labor force. Portland, Oregon the DB hiding spot far from 47th St. DeBeers is NOT forever and neither is the MMS***.

  10. What a surprise to see De Beers jump into the synthetic diamond market with aggressive prices, low cost jewelry, and a sales pitch of “diamonds are for everybody, everyday, everyplace”. The language on the new website is smug and complacent, but they hold the new brand at arm’s length.

  11. A few weeks ago, i was discussing my dislike towards “synthetic diamonds” with my husband. I told him de beers would never get involved in something like this. Then this article shows up.

  12. I for one find this extremly interesting and very pleasing. Im on the retail side working for a major jewelery retailer.
    The price point is excellent (i will very likely buy 2 1ct blue and 1 1ct pink to make into earrings for my wife).
    This will fill a nice gap in the market. The website looks great and puts lab diamonds where they belong, with lab gemstones.
    I just hope my company will team with DB on this and carry them in store

  13. Well well we’ll, Big fish been eating little fish for a long time. Looks like big fish eating itself now.

  14. I think this is a very smart move by DeBeers. I wish this had been done much sooner though. It’ll be good for the natural diamond industry as a whole.

    • Those jewelers should become gemologists. They can now get a GIA GG mostly online and with just a three or four weeks at a GIA campus. Spend their 2018 and 2019 vacations getting a GG. They will be better jewelers. And for a few thousand dollars they can buy a device that separates natural from synthetic diamonds. If they want to be professionals and know a lot more about what they are selling this should be no barrier. Do it for themselves. Do it for their clients.

  15. Can you imagine the “switch stones” lawsuits?
    Most jewelers in jewelry stores are mechanics, not gemologists. So, when a customer swears that he/she brought a natural diamond ring in to be sized and got a lab diamond ring back and threatens to sue and reports this to the police and the newspapers and on Facebook and other social media the result is a ruined reputation for the store who sized the ring. Also, this is going to be a terrific boon for the guys counterfeiting lab reports.
    Also, Is there anyone who really thinks men won’t buy an $800.00 diamond set in a cheap silver mounting and take it to be reset in gold? Here Baby, I bought you a diamond. Take it to be sized at any jewelry store. Be sure you get the same one back.

    • with each lightbox stone being lazer engraved i don’t see this being a big issue. If they a jewelery store partners with DeBeers on Lightbox they should be able to use a gem scope with the guest to show them this feature. And if a jeweler does not carry lightbox its should be easy to prove they never bought any.
      All jewelers shopuld be using a gemscope with all guests anyway

  16. Transparency is the word. The internet has changed everything. Lab sapphires are not the same as lab diamonds. The inclusions in a sapphire/ruby make them valuable. They prove country of origin. Books written with high resolution photos. Don’t we love that Kashmir silk? In a diamond we hope for none. Lab created gives us just that.

  17. Why is everyone so worked up? This is simply an offensive move for a defensive purpose. Does anyone think that De Beers would do anything they believe would hurt the natural diamond business, especially in the near term? Nothing has really changed. De Beers does what De Beers thinks is best for them in protecting their business. And so should you, as long as it’s moral, ethical, and legal. It’s really very simple. De Beers wasn’t happy with how synthetic diamond producers and distributors were positioning their product against natural diamonds. As with other De Beers initiatives over the past couple decades, time will tell whether this strategy will prove successful. In the meantime, work hard, work smart, and focus on controlling what is within your power to control…..namely, your own business!

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