New Ad Touts Diamonds for the Millennium
Hoping consumers will mark the millennium with diamonds, De Beers this month begins airing one of the most expensive and elaborate commercials in its history.
Dubbed “Crowds,” the commercial shows a couple at a massive New Year’s celebration. (While the ad evokes Times Square, it was actually shot on a Houston soundstage.) At midnight, as fireworks explode and the crowd cheers, the man gives the woman a diamond solitaire necklace. “For the only other person in the world,” an announcer says, “a diamond.” The rest of the throng disappears and the camera lingers on the embracing couple. The tag line: “Show her you love her for the next thousand years.”
With the exception of an engagement ring spot, “Crowds” is the only De Beers TV commercial that will air in the latter part of this year. “It shows how much opportunity we see in the millennium that we are putting all our eggs in this particular basket,” notes Richard Lennox, De Beers group director for J. Walter Thompson.
Lennox says the millennium campaign isn’t geared toward promoting diamond jewelry purchases for either Christmas or New Year’s—although he expects people will buy for both occasions. He adds that De Beers’ research sees the “millennium opportunity” extending through the year 2000.
The commercial once again features the “Shadows” music, officially known as “Palladio,” by Karl Jenkins. This is the sixth year De Beers has used the classical theme. “That music is a tremendously powerful brand signature,” Lennox says.
At holiday time, the company will bring back the outdoor advertising campaign it began last year. The outdoor ads also have a millennium theme. One shows diamonds and asks, “Which millennium are you waiting for?”
Diamond Web Site Attracts Capital
Two venture capital companies apparently think Internet diamond selling will be big business: They’ve invested $6 million in the Web site www.Internetdiamonds.com.
Mark Vadon, CEO of the three-year-old site, says he’ll use the funding to “brand” his site as the Web’s leading diamond seller. “We plan on growing a lot,” he says. “We think we are now the leading diamond Web site, and if not, we plan to be soon. I don’t see any players that have the backing we’ve got.”
Vadon, who has a finance background, began as a customer of the site, which was started by Seattle jeweler Doug Williams. Vadon says the site sells stones for 40% to 50% less than a traditional retail store but declines to give specifics on “hits” or annual sales.
Vertical Integration at De Beers?
One of the biggest controversies at this summer’s diamond association presidents’ meeting in Moscow was over an old issue: De Beers’ polished division.
The division has polished stones and sold them for more than 20 years. But recently, it’s tried to boost its public profile. It handed out promotional pamphlets at the watch and jewelry show in Basel, Switzerland, this spring and has approached publications about coverage.
This inflamed Moscow attendees, who were already on edge about De Beers’ branding plans. “De Beers has sold polished for many years, but that’s very different from going to trade fairs and handing out literature,” said Freddy Hager of the London bourse. Some noted that sightholders feed De Beers confidential information about pricing and customers—information that most companies would never give their suppliers, let alone a possible competitor.
But in response to questions, De Beers managing director Gary Ralfe noted the company had “no plans” to vertically integrate. “I haven’t noticed any increase in turnover of the polished division,” he said. “It is our clients that distribute rough diamonds, not De Beers. We don’t have the resources to do more.” Then why the brochure? Executives noted that, while the division has a market testing function, it’s also an economic venture that ultimately has to pay for itself.
While Ralfe’s pronouncements on that issue seemed calming, the fear that De Beers may be expanding beyond its traditional role also lurked in the background of the meeting’s spirited discussion of “branding.” The International Diamond Manufacturers Association issued a tempered endorsement of DeBeers-branded diamonds, noting the “potential value of such a move” but expressing concerns about the impact. An IDMA resolution said diamonds produced by both non-sightholders and sightholders should be eligible for branding. De Beers has previously said that branded stones would be “offered through sightholders.” For more news from the Moscow meeting, see page 102.
Rapaport to Sell His Own Jewelry
Martin Rapaport has added another title to his long list—that of jewelry designer. The market guru’s line of “Rapaport jewelry” is primarily made of titanium and features a top-quality stone bezel-set in a chip inspired by a casino marker.
“I always wanted to make an interesting piece of jewelry,” Rapaport says. “This is something that’s conceptually very wild.”
Rapaport says he’s still developing the new line, which he may sell to “exclusive” jewelers and possibly through casinos. While Rapaport came up with the concept, it was interpreted by Russian master jeweler Yuri of New York’s Tribeca Foundry.
Rapaport’s company is also offering a line of invisibly set pieces from an Israeli designer. For more information on the jewelry products, call (212) 354-9800.
Italian Soprano Takes GIA Diamond Course
The Gemological Institute of America’s campus in Italy recently got a high-profile new student—Fiorenza Cedolins, the country’s leading soprano.
Cedolins enrolled in GIA’s distance-education Diamond Essentials program. In Italy she’s known, aptly enough, as the “Diamond Diva” for the warmth of her voice. She recently performed at De Beers’ Millennium Diamond “Collection of Collections” at the Basel Fair in Switzerland.
De Beers Reports Big Leap in Sales
It’s champagne time at De Beers, as the company reported a 44% jump in rough diamond sales for the first half of 1999, a sign that the diamond market is continuing its recovery.
Overall sales were $2.447 billion, compared with $1.7 billion last year. While the sales are below what De Beers regularly logged in the early 1990s, the investment community was happily surprised and bid up De Beers’ share price, which has now nearly doubled since January. The strong results were especially noteworthy because they came on the heels of a disappointing 1998, when sales hit an 11-year low.
The improving world economy and sales of the limited-edition “Millennium” diamonds boosted results. A De Beers statement noted that the American market has “continued to grow” but the Far East markets remain “depressed, although there are some signs the worst is over.”
The statement also noted that De Beers’ tight-supply policy has led to an increase in confidence in the cutting centers. In fact, confidence has so improved that there’s renewed speculation about a De Beers price increase. However, in a recent interview with Reuters, De Beers director Tim Capon said the company was waiting until polished prices improve. The last official De Beers price increase was in 1996.
De Beers’ Millennium Bash Lights Up London
Prince Charles, Donatella Versace, Hugh Grant, and 600 other celebrities and fashion insiders were on the guest list at the recent “Diamonds Are Forever Millennium Celebration” in London, the glitzy kick-off to De Beers’ Millennium campaign. The event, which included a jewelry-draped fashion show and music from Jon Bon Jovi, benefited several charities. The high point of the evening was the debut of a diamond jewelry collection created by top international jewelers, worn on the runway by supermodels in Versace gowns created to showcase the jewels. Shown above is Chopard’s Icecube Necklace in white gold with 404 carré diamonds totaling 56.58 cts. and 1,204 diamonds totaling 3.53 cts.