NEW YORK — While the jewelry industry remains polarized on the issue of lab-grown diamonds, Sally Morrison, chief marketing officer for Lightbox Jewelry, says company research has shown that consumers are generally open minded about them, particularly in their role as fashion jewelry.
Morrison spoke as part of a panel discussion during the Jewelers of America National Convention in New York this week on the topic of “Disrupting the Marketplace: Opportunities & Challenges of Selling Lab-Grown Diamonds. She was joined on the panel by Stanley Zale, vice president, diamonds and gemstones procurement at Stuller, and Peter Englehart, director of business development and sales for Atelier Swarovski Fine Jewelry.
De Beers rocked the jewelry industry during the 2018 JCK Las Vegas show by introducing Lightbox, its own lab-grown diamond jewelry for sale at $800 retail for a carat. Lightbox pieces, which are lab-grown diamonds set in accessibly priced fashion jewelry, have been sold since September 2018 online and in pop-up shops.
Morrison acknowledges that the price of this product will slide as the technology improves, comparing it to flat-screen TVs. “We should expect the technology to get more efficient and therefore cheaper. We pitched our brand at $800 a carat because we thought that was sustainable for a while, not necessarily forever,” she says.
Morrison, responding to a question, said Lightbox did not launch its fashion jewelry collection to disrupt the market for the sake of disruption. “We think at $800 a carat we can build a very robust, profitable business,” she says.
During initial trading in the fourth quarter of 2018, demand exceeded expectations, particularly demand for the blue and pink color options. “It’s going better than we expected,” she says. “Demand is out there, and people want innovation. Lightbox should be a beacon of what lab-grown diamonds should be about – fun and fashion.”
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After Lightbox’s $94 million plant in Gresham, OR, goes online in 2020, the brand will be offered to retailers. Color offerings and setting styles will likely be expanded as well. Morrison says by then, Lightbox will be producing upwards of 200,000 carats of polished lab-grown supply.
Zale says the overall demand for them will likely be closer to 2 million carats.
Lightbox still has no plans to enter the engagement market with lab grown diamonds, she said.
Englehart says Atelier Swarovski has found acceptance across mid-market as well as high-end retailers for loose, lab-grown diamonds curated and sold by Swarovski and bought from a variety of suppliers.
“That business is expanding dramatically,” he says. “It was much more difficult at the beginning. We faced a lot of resistance. But I trust retailers to understand their consumer. Ultimately it’s going to be the consumer who is going to vote on it and it’s up to us whether we want to participate or not.”
Zale says Stuller sees lab-grown diamonds as an opportunity for the industry at large to grow. “We’re there to meet market demand and aren’t going to sit in judgment of how someone chooses to adorn themselves with jewelry, as long as it’s legal and is disclosed. We’re in the jewelry business and we’re not necessarily in the diamond business.”
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Zale says that as far as buying any kind of diamond for investment, natural diamonds are not rising in value, either. “I’m not comfortable with us, as an industry, representing diamonds as an investment,” Zale says. “The paradigm of diamonds increasing in value changed about 10 years ago. There’s no guarantee when you wake up tomorrow morning that they will be worth more than they are today.”
Chuck Kuba, owner of Iowa Diamond in West Des Moines, IA, who attended the presentation, says his younger customers, ages 21-26, are mired in college-loan debt, and as a result, marriage licenses in Iowa are down 14 percent. It’s market demand that will determine what he is able to sell. “Customers control my business,” he says. “I can suggest things but it’s their decision and their money, as long as I’m being honest. It’s going to be a hell of a ride.”
