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A Divergence of Thought - April 2024 News



There is a massive difference in price between natural and laboratory grown diamonds. The current market for laboratory grown diamonds is driven by this price difference. The most relevant question, in my mind, is how much more can laboratory grown prices decline. 

Retailers are naturally guided by profit, and they will move in the most profitable direction. Laboratory grown diamonds are currently an easy and profitable sale, with margins that are higher than most other products in jewellery cases. Jewellers are achieving their best margins when they quote lab-grown prices against natural diamond prices. 

Independent retail jewellers, who carry manufactured diamonds, are smart. They are constantly weighing their positions and options when considering selling a product that is decreasing in value, so quickly.

Some jewellery experts believe that retailer jewellers will not be able to maintain their current margins as consumers become more aware of the actual cost of producing manufactured diamonds. 

Laboratory grown diamonds will remain an item in jewellery stores as long as they are profitable. Gina Drosos of Signet Jewelers calls the divergence in thought over the two forms of diamonds with these words, “Customers understand that [a lab-grown diamond] is not the same as a natural diamond. It’s not rare, it’s not special and unique in the same way, but it’s affordable. At some points in people’s lives or in certain economic times, that becomes a higher priority.” She adds that “there could be a “tailwind” for natural diamonds this year as customers become more aware of falling lab grown prices”. This comment is extremely relevant, given that it is coming from such an important retail jewellery figure.

There are certain inherent values that distinguish a natural diamond from a manufactured diamond. They have a different creation story. Natural diamonds are the original, authentic product. They carry with them an emotional connection that can’t easily be duplicated, and natural diamonds will never be considered fashion jewellery.

Regal Imports is looking towards long term and sustainable growth. We are supporting natural diamond sales and stressing provenance, specifically Canadian origin. Our goal is to carry only Canadian diamonds from one point to one carat, while also maintaining as much Canadian origin as possible above these sizes.

Kim Truter, the CEO controlling the production and sales of natural diamonds from the Ekati mine, claims that “Canadian diamonds are selling like hotcakes. I'm not as concerned about some of those pricing things that others are talking about because what we're finding is our Canadian stones are selling fast. We can sell everything we produce and more.” He continues, “One of the things that we do with our operating teams is that we actually ask them to ignore price. They need to run the business, generating profit through their own efforts, not relying on price. In that way, we protect ourselves against any downturn in the market.” 

Regal Imports is also stocking ‘exotic cuts’ and ‘unique shapes’ that will stimulate the creativity of both traditional and up and coming designing goldsmiths, who believe that there is more to bridal jewellery than a solitaire diamond set up on a micro-thin band. 

We know that ideas on diamonds and jewellery are currently divergent, and we by no means claim to know more than those who think differently; that is why we are constantly listening and welcoming comments and contributions to this important diamond discussion.

….and that ends the April edition of the Regal Imports News

Mel Moss