Diamond Jewelry Sales Up in 2003

2003 was a very good year for the diamond industry, with U.S. sales of diamond jewelry up 5%, De Beers said recently.

The company said that global retail sales of diamond jewelry were up 5% in local currencies (6% in dollars), with strong performances not only from the United States but also from India, China, and the United Kingdom. In addition, Japan recorded growth for the first time in years.

“Our colleagues in sales and marketing should take enormous credit [for this growth],” managing director Gary Ralfe said in a videoconference with analysts. “In the 1990s, before we had our strategic review, there was only one year in which diamond jewelry growth at retail level came up to GDP growth. Since 1999, in every year apart from 2001, we have met GDP growth, and I think that is the direct result of Supplier of Choice and the increased focus on marketing.”

A company statement added that the good news at retail should help clear excess stocks from the pipeline and reduce the trade’s historically high debt levels.

Ralfe noted that 2003 saw a $250 million increase in what he called “quality diamond advertising,” which he defined as advertising that plays upon “the emotional and brand proposition of a diamond [and] drives the essential diamond message. … It is not discount advertising, so much of what we used to see.”

The company’s sales of rough through its Diamond Trading Company increased 7% to $5.52 billion—ahead of the company’s target. That number includes three separate price increases. The DTC said its prices were, on average, about 10% higher than at the beginning of the year.

The company also has high hopes for 2004, noting that it raised rough diamond prices an average of 3% at the year’s first sight.

On the topic of synthetic diamonds, Ralfe says De Beers is treating “synthetics as though they might be a threat, even though that threat is many years away from us. … I can say categorically that we have the necessary instruments to discriminate synthetics from naturals, and we have shared them with the world’s major diamond grading laboratories.”

Ralfe said his company currently controls about 60% of the market, but he expects its share will “inexorably” fall to 50%.