When De Beers announced the launch of the Lightbox colored lab-grown diamond jewelry line in 2018 to disrupt the synthetics sector by offering fixed and clear per-carat pricing the shock in the global diamond trade was resounding.
Despite the diamond mining giant presenting the stones as simply a venture into the sector that would offer a fun and colorful product which, if lost, would be no big deal since their cost was relatively low, the diamond trade remained stunned. It would not be too much of an exaggeration to say, in fact, there was a feeling of betrayal.
De Beers – whose very name and history encapsulated the entire diamond business for more than a century – was adding LGDs to its diamonds for sale. No matter the storied history of the company which started out with the Oppenheimer family in South Africa in the late 19th century. To all intents and purposes, the company had ruled the diamond business with an iron hand for more than 100 years.
The very least that members of the diamond industry had expected was that the diamond giant would remain unswervingly loyal to the natural diamond sector. It was so much of a given that few, if any, members of the trade had even considered the possibility prior to the De Beers Lightbox announcement.
What Was the Lightbox Episode All About?
De Beers launched its Lightbox lab-grown diamond jewellery brand in May 2018. The aim, the firm said, was to differentiate LGDs from natural diamonds by positioning them as a more affordable, fashion-focused product with a fixed, linear pricing strategy (initially $800 per carat, later reduced to $500).
· Lightbox offered jewellery featuring lab-grown diamonds in various colors (clear, pink, blue) and sizes. These diamonds are chemically and physically identical to natural diamonds but created in a laboratory. Unlike natural diamonds where price increases due to carat weight and other factors, Lightbox employed a straightforward per-carat pricing model.
· The brand emphasized the use of LGDs in fashion jewelry, suggesting they were a fun and accessible option rather than being primarily for traditional fine jewelry as were engagement rings.
· De Beers' strategy with Lightbox was partly to create a clear distinction in consumers' minds between natural diamonds (positioned as rare and valuable) and lab-grown diamonds (positioned as a more accessible and fashion-oriented product).
· Lightbox diamonds were produced by De Beers' Element Six division, initially at a plant in the UK and later expanded to a large-scale facility in Oregon, USA, powered by renewable energy as De Beers further sought to deflect criticism by giving the LGDs a sustainability ticket.
Why the Controversy?
Lightbox's entry into the lab-grown diamond market was met with considerable debate within the jewelry industry. Some saw it as a strategic move by De Beers to control the narrative around lab-grown diamonds and prevent them from significantly undermining the value of natural diamonds.
The linear pricing model was also controversial, as it differed significantly from the traditional pricing of both natural and other lab-grown diamonds.
Many saw it as a cynical move by De Beers to enter and control the lab grown diamond market as well as natural diamonds, and to provide the company with an extra income source.
Lightbox Experiment Ending
De Beers exit from Lightbox was as sudden as its entry – and the wording just as cynical for many as its announcement in 2018 that it was entering the LGD market.
“The planned closure of Lightbox reflects our commitment to natural diamonds,” said De Beers CEO Al Cook. “We are also excited at the growing commercial potential for synthetic diamonds in the technology and industrial space.”
The company said it is in talks with potential buyers regarding the potential sale of certain Lightbox assets, including inventory. In addition, it has promised to collaborate closely with staff, retail partners, suppliers and its other stakeholders during the process of exiting the business line.
De Beers says its current clients will continue to receive support for purchases, as well as warranties and after-sale care, as it shuts down the operation. In a sign of its desire to exit the market, Lightbox has posted a 20% discount promotion on its website.
“The persistently declining value of lab-grown diamonds in jewelry underscores the growing differentiation between these factory-made products and natural diamonds,” Cook said in the company statement. “Lightbox has helped to highlight the fundamental differences in value between these two categories.”
The Tough Business Scenario Behind the Lightbox Decision
The real story, of course, is the dramatic fall in lab-grown prices in the jewelry sector in recent times. Wholesale prices are believed to have dropped by 90%, De Beers says.
China and India have raised production of LGDs, and the US retail sector has been in a race to the bottom as it constantly reduced prices.
In the words of De Beers: “Overall, we expect both the cost and price of lab-grown diamonds to fall further in the jewelry sector.”
The Lightbox decision also comes against the background of De Beers’ move in the direction of becoming a stand-alone company, Cook said. Owner Anglo American has been seeking a buyer for De Beers while, at the same time, preparing for an initial public offering (IPO) – or stock market launch.
As a result, the diamond industry understands that De Beers is aiming to sharpen up its business, slash overheads and other costs and build a more “focused” company, in the words of Cook.
Already, approximately a year ago, De Beers said it would no longer produce synthetic diamonds for jewelry, but would, instead, focus on technological applications.
De Beers’ synthetic-diamond production unit, Element Six, will continue to focus exclusively on industrial solutions using LGDs, and De Beers will centralize the operations at its Element Six production facility in Oregon, US.
Final Words…
One former Sightholder I spoke to said the days when De Beers had honest discussions with its clients and a true concern for the wider natural diamond market had long since passed. “We used to fly into London for discussions, and you really felt that your words carried some weight with the top executives,” he said. “If I tell you that was 15 years ago or more you see how long the change in outlook has been going on.”
To put it kindly, De Beers’ experiment with Lightbox – both the nature of its entry and of its exit – were rather clumsy.
For the natural diamond king to enter the lab-grown diamond market was seen as a cynical attempt to corner a big part of what was then a growing sector.
Similarly, now, the company is seen as wanting to exit LGDs as quickly as possible for pure self-interest and financial reasons – in order to show prospective buyers that it is concentrating on one particular sector again – natural diamonds.
Abraham Dayan for Rough&Polished from Tel Aviv
