LVMH turns to luxury lab-grown diamonds

For years, the mining giants that control the world diamond trade have waged a marketing war against the growth of laboratory-grown diamonds, backed by the luxury jewelry sector. Polished companies aimed to decorate the traditional diamond industry in a positive light, while executives dismissed synthetic stones as small baubles.

“Laboratory-grown diamonds do not have them [history]”, Cartier CEO Cyril Vigneran said in an interview published in State of fashion: watches and jewelry a report published last year. “They’ve lost their singularity and lost the fact that they were made by Earth millions of years ago.”

But natural diamonds come with dirty environmental and ethical baggage that is increasingly contrary to values formation of shopping habits young consumers. On the contrary, laboratory-grown diamond suppliers sought to present themselves as a modern, technologically sound and sustainable alternative.

World’s largest luxury group LVMH relies on cultured stones. Venture Group Unit, LVMH Luxury Ventures, took an undisclosed share in the Israeli diamond startup Lusix, grown in the laboratory, as part of a $ 90 million funding round. While luxury jewelers like Tiffany who LVMH acquired last year staying away from processed stones, this move is the latest sign that changing consumer attitudes and values ​​are changing what might be a luxury in the modern era.

Laboratory-grown diamonds cultivated either by exposing the “seed” of the diamond to extreme pressure and heat, or through a new process of low pressure when carbon atoms are grown inside a gas chamber. The process takes several weeks, and the results are chemically identical to diamonds mined from the ground.

Although these processes require a significant amount of energy, the diamonds grown in the laboratory rid themselves of human rights abuses and funding conflicts that continue to affect the natural diamond industry. Lusix says it uses only solar energy, describing its stones as “grown in the sun”.

The destructive forces created by changing consumer tastes and new technologies are already evident in other parts of the industry; great luxury labels are there discarded bag fast for the past five years, with Kering CEO Francois-Henri Pino declaring bald that “some material has no place in luxury.”

Meanwhile, new business models such as resale which were originally aggressively rejected by major luxury players, are now talking about strategic additions that can support waste reduction ambitions and create ways to further increase revenue and profits without increasing environmental impact.

Diamonds are perhaps the most cultural touch of luxury. Their brilliance was polished by a mixture of carefully controlled deliveries and generations of powerful advertising campaigns that strengthened their position as brilliant symbols of status and love. But the trade is ripe for failure.

Last year, Pandora, the world’s largest jewelry maker, said it would stop using mined diamonds altogether as part of a broader strategy to combat unethical methods of producing its raw materials. And although the lab-grown stones remain a small share of the overall market, awareness and demand continue to grow, experts say. Their lower price meant that stones became a more popular fashion product, but luxury could lean towards a different story.

LVMH Luxury Ventures ’investments in lab-grown diamonds are taking place against a broader background of failures. Prices for diamonds in some parts of the market have grew this year in response to harsh sanctions against the Russian state-mining company Alrosa. The company accounts for about a third of the world’s diamond production, which competes with De Beers for its market importance.

And while most luxury jewelers continue to focus their efforts to tap the growing demand for ethical and sustainable stone sources to create transparency and traceability of their supply chains for mined diamonds grown in the laboratory are breaking through. Last year, former Harry Winston / Bally CEO Frederick de Narp and long-time Cartier CEO Caroly de Fontaine teamed up with to form the investment fund Luximpact in order to reload obsolete jewelry brands using only laboratory-grown materials.

Net-a-Porter introduced its first brand of laboratory-grown diamonds, including the Kimaï fine jewelry brand. Earlier this year, LVMH-owned Tag Heuer tested water for laboratory-grown diamonds using watch limited series studded with Lusix diamonds, which sold for an extremely luxurious price of about $ 375,000.

 

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