De Beers Steps Away from Lab-Grown Diamonds, Refocuses on Natural Gems

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De Beers shifts focus from synthetic diamonds to natural stones as it prepares to part ways with Anglo American

De Beers is ceasing production of lab-grown diamonds, marking a significant shift in strategy as it navigates its impending separation from Anglo American Plc. Although the company had the technology to produce synthetic gems for years, it refrained from selling them as jewellery to maintain the allure of natural diamonds. However, as man-made stones gained popularity, De Beers launched its own brand, Lightbox, in 2018 to sell synthetic diamonds at lower prices, attempting to clearly distinguish them from natural stones.

Under the leadership of CEO Al Cook, De Beers is now pulling back from this venture. Cook’s overhaul comes amid plans by Anglo American to sell or separate from De Beers, ending a nearly century-long partnership. As part of this strategic shift, De Beers will refocus on promoting natural diamonds, emphasizing their unique value compared to lab-grown alternatives.

“We know how to do it and we’re coming back,” CEO Cook stated, highlighting the company’s renewed commitment to differentiating natural diamonds from synthetic ones.

Despite the collapse in synthetic diamond prices, the impact on the natural diamond market has been substantial. Prices for natural stones, particularly those used in more affordable wedding rings, have dropped significantly under the pressure of synthetic alternatives, showing little sign of recovery.

De Beers plans to sell off its existing inventory of Lightbox stones over the next year before deciding on the future of the business. The long-term impact of synthetic diamonds on the market remains debated, with some industry experts viewing the current weakness as cyclical rather than structural.

Looking ahead, De Beers will focus on category marketing, promoting diamond jewellery in general, and expanding its retail presence through dedicated jewellery stores. The company also plans to venture into polishing its own stones, traditionally dominated by family-run businesses in India and Belgium.

With a target of achieving an annual core profit of $1.5 billion by 2028, De Beers aims to return to its historical profitability range of $500 million to $1.5 billion. This strategic pivot comes after years of volatile performance that frustrated its parent company, Anglo American.

De Beers’ exit from lab-grown diamonds signals a renewed commitment to natural gems as it prepares to embark on a new chapter in its storied history.

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