After seven decades of selling gemstones as a precious commodity, De Beers now plans to offer synthetic versions at a fraction of the price, marking a major shift for the world's largest diamond miner.
The about-face was not expected, as De Beers has long castigated diamonds made in the laboratory, counting on the perceived rarity of mined jewels to fuel demand and lift the value of its sparkling product.
But the company adopted an "if you can't beat them join them" stance on Tuesday as it introduced a man-made line of blue, pink and white diamonds under the brand Lightbox Jewelry that will sell for as little as $200, or roughly a tenth of what a mined gem costs.
Consumer research found that people want "affordable fashion jewelry that may not be forever, but is perfect for right now," Bruce Cleave, CEO of De Beers, said in a statement, referencing the company's famed "A diamond is forever" slogan. "We see an opportunity that's been missed by lab-grown diamond producers," he added, suggesting that De Beers would offer its man-made gems at lower prices than competitors.
The move into less-costly jewelry could also be seen as an acknowledgement by the company that younger consumers have less disposable income than prior generations, given student debt and dormant pay. Lab-grown diamonds also represent to some consumers an ethically sourced substitute to stones that can be mined in some of the world's worst working conditions stones.
This year, De Beers reported seeing a 6 percent sales decline in rough diamonds.
While the company has for decades refrained from creating jewelry with synthetic diamonds, De Beers has long made diamonds in the lab for industrial uses including drilling and in semiconductors. That background should let De Beers undercut the cost of other lab-grown gems.
"Lightbox will be clear with consumers about what lab-grown diamonds are and will offer straightforward pricing that is consistent with the true cost of production," Steve Coe, general manager of Lightbox Jewelry, stated in the release.
Actor Leonardo DiCaprio is among the investors in the Diamond Foundry, a California company that sells synthetic diamonds for more than four times what Lightbox says it would be charging. DiCaprio starred in "Blood Diamond," a 2006 film detailing diamond-related violence and exploitation of workers amid a civil war in Africa.