De Beers Buys De Beers

De Beers has bought out longtime partner LVMH and now owns 100 percent of the De Beers Diamond Jewellers retail chain. De Beers Group CEO Bruce Cleaver tells JCK that the purchase was spurred by LVMH wanting to “clean up its portfolio.”

The diamond giant and luxury goods group have been 50-50 partners in the joint venture since its debut. The chain launched in 2001, intending to take advantage of consumer awareness of the De Beers brand name. Initial expectations were heady, with the partners reportedly kicking in $250 million apiece, and executives talking about opening as many as 150 stores.

But in the years since, those grand plans have been noticeably scaled back. The chain currently comprises 32 stores in 17 markets. Several of the stores the company opened in the U.S. market—in Los Angeles, San Francisco, and Las Vegas—have closed, though it still operates in Houston, New York City, and Naples, Fla.

The retail brand is now mostly focused on Asia. “In China, it’s actually a very powerful brand,” Cleaver says. “Heritage brands are powerful in China—they are trusted. So there’s big opportunity there.

“It will never be a massive business, but it’s an important part of our portfolio,” he adds.

Cleaver also mentioned an under-covered aspect of this acquisition: De Beers now gets full rights to its name. The acquisition “gives us more flexibility to use our name in any number of ways, whether it be wholesale or whether we rebrand some of the businesses in our portfolio,” he says. “Part of the reason is there has always been this restriction. So it’s first, what do we do when we rebrand the business? And second, what else can we do with the name commercially? At least the flexibility is now there.”

Top: the De Beers Wondrous Sphere, with 429 polished and 47 rough (63.71 cts. t.w.) diamonds, including a 13.17 ct. olive-green rough center stone; inset: inside De Beers’ New York City flagship store, on Madison Avenue on the Upper East Side

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