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Gemdax

Diamonds’ Former Monopolist Bows to Market Forces to Spur Demand

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De Beers, the one-time world diamond monopoly, is bowing to market forces.
The Anglo American Plc unit, still producing about 30 percent of supply, is said to have lowered prices almost 10 percent last month, and is plowing tens of millions of dollars into an advertising push to spur jewelry sales. That’s after two reductions in its annual output target, by a total of as much as 15 percent, failed to halt an accelerating slump in prices of the uncut gems.

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Want to Make a Diamond in Just 10 Weeks? Use a Microwave

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The 2.62-carat diamond Calvin Mills bought his fiancée in November is a stunner. Pear-shaped and canary-yellow, the gem cost $22,000. A bargain. Mills, the chief executive officer of CMC Technology Consulting in Baton Rouge, La., says he could have spent tens of thousands more on a comparably sized diamond mined out of the earth, but his came from a lab. “I got more diamond for less money,” says the former Southern University football player, who proposed last year at halftime during one of his alma mater’s games at the Superdome in New Orleans.

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Diamond Miners Seek Mad Men to Pitch Gems to Younger Generation

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What makes a diamond valuable? History shows a slick marketing team and a killer tagline help.

“A Diamond is Forever,” voted the best slogan of the 20th century by Advertising Age, helped De Beers convince people for almost 70 years that it’s worth parting with two months’ salary for a gem. Yet the end of its monopoly a decade ago blunted its role as the industry’s marketing edge.

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VIP Diamond Buyers Resist De Beers Pricing That Boosted Profits

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Diamond buyers are leaving stones on the table, prompting De Beers, the world’s biggest producer, to back down on pricing.

After 30 percent of its rough diamonds went unsold at its March sale, the Anglo American Plc unit unexpectedly reduced prices by about 3 percent last week. In February, the company said it expected an increase this year.

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