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De Beers is closing down its lab-grown diamond business, cementing an earlier decision to stop selling the stones as jewellery as it commits to traditional gems.
The diamond miner announced last year that it would cease selling its own man-made gems, but was unsure what it would do with the Lightbox business that made them. On Thursday, it said it’s discussing the sale of some assets — including inventory — with potential buyers.
While having the technology to make synthetic gems, the company had long refused to sell them as jewelry, fearing they would undercut the allure of natural stones. Yet as man-made gems gained traction and started competing directly with natural diamonds, De Beers started its own jewellery brand in 2018.
Lightbox was introduced to sell synthetic diamonds at a steep discount to rival producers in an attempt to drag prices lower and create a clear divide in consumers’ minds between traditional and lab-grown products.
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Synthetic diamond prices have now collapsed, though how much of that is down to De Beers rather than a flood of new supply from places like China is open to debate. The problem for De Beers is that wholesale prices of lab-grown diamonds have now become much cheaper than those of Lightbox, undermining the reason for continuing with the brand.
“The persistently declining value of lab-grown diamonds in jewellery underscores the growing differentiation between these factory-made products and natural diamonds,” De Beers chief executive officer Al Cook said in a statement. “The planned closure of Lightbox reflects our commitment to natural diamonds.”
De Beers is in the process of trying to cut costs as it navigates a crisis within the diamond industry and prepares to be cast adrift by Anglo American Plc, which is trying to sell the famous gem company.
By Thomas Biesheuvel
Learn more:
De Beers Takes Another Hit as Diamond Woes Bite
Owner Anglo American posted a $3 billion writedown on the unit, which is struggling to navigate a collapse in Chinese demand and increasing competition from lab-grown stones.
