A recent Wall Street Journal story describes how storied diamond monopolist De Beers is in the process of trying to offload its former core diamond operation. Natural diamond sales and pricing have plunged due to the success of synthetic-diamond makers in making larger and larger stones. I looked at a manufactured diamonds deal in the early 1990s. Even the best producers then could fabricate only very small diamonds for industrial use, mainly abrasives.
The Journal goes heavy on one reason for the change in consumer appetite, which is price, and lighter on the other, buyer awareness of the horrific conflicts in Africa over diamond mining and trafficking. But it omits long-term fashion trends which had resulted in diamonds being in a decline even before the fabbed gem whackage.
As we’ll discuss, the history of another technological change in the jewelry industry, the rise of cultured pearls, does not bode well for natural diamonds.
And before some readers tisk tisk over what they might regard as a vehicle for retrograde sexist excess, consider that jewelry is often a store of value for women, such as the gold that Indian women get as their dowry. A woman whose partner has died or walked out on her may need to sell her gems to help her get by. A college friend’s grandmother, who ran a retail business after her husband died young, remarked that the only jewelry that had sure value was pieces with diamonds, the bigger, the better. But as we can see, that is no longer true.
And they are sources of income for the countries that produce them, as well as those that cut them. Below is a table of top producers. Botswana is De Beer’s biggest supplier and holds a minority stake.
Wikipedia provided a description of the rest of the production process and the key players in it:
Diamond cutting, as well as overall processing, is concentrated in a few cities around the world. The main diamond trading centers are Antwerp, Tel Aviv, and Dubai from where roughs are sent to the main processing centers of India and China. Diamonds are cut and polished in Surat, India and the Chinese cities of Guangzhou and Shenzhen. India in recent years has held between 90% of the world market in polished diamonds and China has held the rest of the world market share in a recent year.[3] Other important diamond centers are New York City and Amsterdam.
The Journal recounts De Beer’s success in convincing generations of young adults that an engagement ring was necessary for a prospective groom to demonstrate seriousness of commitment, and needed to have a diamond as its centerpiece.1 Via persistent marketing campaigns, DeBeers even succeeded in persuading suitors that the ring needed to represent 2 to 4 months of income, but that benchmark seems finally to be falling to the wayside.
Per the Journal, Anglo American, which has a majority interest in De Beers, cut the book value of that holding by 45% over the last two years. Anglo American had announced a sale of De Beers, but now is pursuing an IPO. If that plan proceeds, the S-1 should make for revealing reading. But this option has run into the buzz saw of Trump’s tariffs, with the US as the biggest market. And here, the Journal recited alarming factoids (if you are De Beers), such as more than half the engagement ring diamonds sold in the US last year being manufactured, along with half the diamonds in Walmart’s diamond jewelry collection.2 On the other end of the spectrum, Nieman Marcus has its own brand of manufactured diamonds.
From Are Diamonds Even a Luxury Anymore? De Beers Reckons With Price Plunge:
Signet Jewelers, which says it is the world’s largest retailer of diamond jewelry, with brands that include Kay Jewelers, Zales and Jared, is partnering with De Beers to extol the virtues of natural diamonds in a new marketing campaign. But last month, Signet said it, too, has been adding more lab-grown diamonds to its fashion jewelry, which was among the factors helping to pull the company out of a prolonged sales slump.
Synthetic diamonds currently account for more than a fifth of global diamond jewelry sales, up from less than 1% in 2016, according to Paul Zimnisky, an independent analyst….
[De Beers CEO Al Cook] He added that the democratization of diamonds diminishes what made them special in the first place. “For as long as humans have been conscious,” he said, “we’ve prized something precious and rare.”
So De Beers and its fellow travelers are spending bigly trying to shore up the brand image of natural diamonds:
The nonprofit trade group [The Natural Diamond Council] called lab-grown diamonds “The Dupe” on billboards it tested in Manhattan earlier this year. They referred to mined diamonds as “For Better,” and lab-grown as “For Worse.”…
The first De Beers ad campaign as part of a partnership with Signet aired in late 2024 and took a higher road. Called “Worth the Wait,” the ads show couples in various stages of courtship, interspersed with images of volcanic eruptions and lava flows. The tagline: “Just like your journey, a natural diamond is worth the wait.”
One response has been to try to segment the market, pitching the manufactures stones for lower-priced buys, and trying to hold the line of natural diamonds as the proper pick for engagement rings:
Signet Chief Executive J.K. Symancyk, who took the helm in November, laid out a new strategy in March that includes pushing more heavily into lab-grown diamonds for fashion jewelry like tennis bracelets, earrings and necklaces, while aiming to protect the allure of natural stones for milestone purchases like engagement rings.
But it’s hard to see how long this differentiation can persist given the yawning price difference:
The retail price of a 1-carat lab-grown diamond has plunged 86% since the beginning of 2016, to about $745, Zimnisky estimates. The price of the same size natural diamond is down 40% over that period to $3,925. Back in 2016, there was only about a $1,000 difference between a 1-carat lab-grown and natural diamond. A natural diamond now costs about five times as much as man-made stone.
However, the price decline does feed the “natural diamonds” argument that only mined stones are scarce and will keep their value.
The article only twice mentions the reluctance of some buyers to purchase “blood diamonds” that came from conflict zones, and points out that the bad press around blood diamonds was peaking in the early 2000s, just when lab diamond were getting traction.
It’s not clear to me that the conflict diamonds issue has gone away as much as De Beers seems to believe. The 2006 movie Blood Diamond, which gots good marks as historical fiction,3 has excellent performances by Leonardo di Caprio (including his Rhodesian accent) and Dijimon Hounsou.
And there’s enough blood to give a sense of the stakes, see here and here for examples.
However, history suggests that in fashion, price wins out when appearance is pretty much the same.
In one of the worst trades of the 20th century, Morgan Plant, the owner of what has since been the Cartier Mansion at 653 Firth Avenue, agreed to swap it to Pierre Cartier in exchange for a “exceptional” natural pearl necklace that Plant’s wife coveted.
But this transaction followed Kokichi Mikimoto having created the first cultured pearly in 1893. Mikimoto was also a marketing genius, but promoted his pearls by including them in intricate, well crafted Art Deco and Nouveau designs and entering them in international shows. A big break came in 1921, when Mikimoto won a lawsuit against a London newspaper that has attacked Mikimoto’s pearls: “cultured pearls sold by a certain Japanese merchant are only imitations of real pearls.”
Below is a copy of a 1936 Mikimoto design:
However, the decline of the cachet of natural pearls appears to have been slower than the shift away from natural diamonds. One proof is in the Perry Mason show, The Case of the Blushing Pearls, where the path to murder starts with a string of natural pearls being stolen and replaced with a cultured strand.4
As an aside, Tiffany, which has always been very dependent on bridal-related business, took a hit from the rise of Mikimoto and repositioned themselves as a premier vendor of engagement rings.
But diamonds and cut gems generally, at least in the US, have been in a long term down trend, as any long-standing New Yorker who would have occasion to travel through the diamond district would attest. It started going into serious contraction in the 1990s, as you could see from the vacant stalls in once-bustling venues for “the trade”, like 10 West 47th Street.
Historically, attention-getting jewelry was part of evening wear. Low neckline dresses almost called for a sparkly choker or a bib of stones. Even though we have gotten used to bare skin with that style of ball gown, the outfit is better balanced visually with some decoration there. It’s not as if cleavage exposure is a requirement; you can easily find vintage photos with very stylish but higher necklines.
In her iconic “Fasten your seatbelt” scene. Betty Davis shows plenty of chest but also has a lot of sparkle at her ears and in the large clip on her dress:
The Oscars helped reinforce these looks. Designers and jewelers fall all over each other to let a top actress borrow from them for the purpose of a walk on the red carpet.
The era of big hair and big shoulders, the 1980s, were also era of big jewelry. The first shot is Mercedes Bass, wife of billionaire Sid Bass:
Uma Thurma in a 1985 vogue cover, and yes, those earrings are diamond:
Or the Alexis Colby character in Dynasty demonstrating that big pieces of the sort that might have earlier been deemed to be only evening-worthy were now day wear:
In the 1980s, both ladies who lunched and women in high end professional jobs regularly sported serious jewelry, including important estate pieces.
Without belaboring the story, this all came to an abrupt end with the rise of Tom Ford at Gucci in the 1990s and the shift to less structured designer wear, flattering only for women with good enough bodies that they would look fetching in gunny sacks, as in the prototypical second wife.5 The move away from highly structured clothes (including haute couture that would take multiple fittings in Paris) that enabled older women to look stylish, paralleling the rise of divorce and then the pre-nup. The more pare-downed clothes were accompanied by much less jewelry, and usually smaller pieces. For many women, the new staple was diamond studs.
De Beers tried, with some success, to fight the trend away from flashy jewelry with various sorts of anniversary rings and necklaces, as in playing on their well-honed marketing message of men buying real diamonds to show their love.
And now, to return to the dim future of natural diamonds: my fashonista contacts tell me that when women buy their own diamond earrings, they’ll usually opt for the manufactured sort, while men will go for natural. But how many wives and girlfriends will make clear they’d rather have a big rock than a natural one?
And what will the really well-off do? One assumes they will turn more and more to colored stones, like rubies, emeralds, and sapphires, as well as large gold pieces, now that gold has become so costly. But even in colored gems, there are degree-of-naturalness issues. Heated stones have fewer inclusions and obtain more saturated color than natural ones, and correspondingly are a bit cheaper.
Regardless, the rich will find new status markers. And diamonds are unlikely to rate high among their choices.
____
1 Note the big diamond refusniks typically opted for precious colored stones. Lady Di’s wedding ring had a blue sapphire as its main stone.
But the sapphire was not why this ring was controversial. From the Antique Jewelry Company:
What caused the scandal was that Diana’s engagement ring was not custom-made for her. Instead, it was available for purchase in Garrard’s catalogue, meaning that anyone with the means could have bought the same ring. Priced at £47,000 (around $60,000 at the time), it was a luxury piece but not exclusive to Royalty. This didn’t sit well with some members of the royal family who felt that royal jewels should be unique and not accessible to “commoners.”
Note that some couples proudly resisted this DeBeers marketing hype. I had a friend in the 1980s who would point out that her engagement ring was cubic zirconium, and she thought ponying up for a diamond was absurd.
2 Yes, the fact that Walmart is selling diamond jewelry is another proof of declining cachet.
3 Save for the inclusion of an excessively pretty actress, Jennifer Connelly, as anAmerican reporter traveling alone in an extremely dangerous part of the world.
4 This was also the first network TV show to feature Japanese actors in speaking roles and launched the television career of George Takei, of later Star Trek fame.
5 Utilitarian, and not necessarily well cut or made, pantsuits became the office staple.
