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LONDON, United Kingdom — De Beers has confirmed that it has ended a joint venture with LVMH after more than 16 years, having bought back the 50 percent stake acquired by the French luxury conglomerate in 2001 for an undisclosed sum.
The joint venture saw a more seamless integration of the luxury jeweller’s brand and store network and allowed it to deliver a more differentiated diamond offering.
The move marks the end of a partnership that at the time, had intended to transform the way diamonds were sold to consumers, positioned more as fashion accessories or casual purchases that customers bought for themselves rather than as an occasional or formal gift for others.
De Beers’ venture into retail with LVMH formed part of an effort to transform itself from a mining company into a luxury goods firm. Comprising 32 stores, De Beers’ retail network spans 17 markets around the world, which includes its business in China, as well as London, Paris and a new flagship in New York.
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"With its strong brand awareness, consummate diamond expertise and a commitment to responsibility, De Beers Diamond Jewellers is a trusted and industry-leading diamond jeweller,”said Bruce Cleaver, chief executive of De Beers Group in a statement on Tuesday. “More fully integrating the De Beers Diamond Jewellers brand and store network will enable us to deliver an even more differentiated diamond offering.”
A spokesperson for LVMH was not immediately available for comment.
The announcement comes at a time when diamond suppliers are facing a challenging market, as the price of diamonds falls. De Beers, which supplies 40 percent of the market, reported that the average price per carat in 2016 was $187, down from $207 in 2015.
The strength of the dollar, the tightening of anti-corruption laws in China (which has affected gifting), and the general slowdown of the hard-luxury market, diamonds in particular, has hit luxury jewellers hard at a time of volatility in the wider luxury market.
On top of this, the retail market for luxury jewellery remains tough; competitor Tiffany & Co has struggled to maintain its standing as an industry leader in both its mature markets like United States and emerging markets like China.
Disclosure: LVMH is part of a group of investors who, together, hold a minority interest in The Business of Fashion. All investors have signed shareholders’ documentation guaranteeing BoF’s complete editorial independence.
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