WD Lab Grown Diamonds, one of the largest lab-grown diamond (LGD) producers in the USA, has filed for bankruptcy on October 11, falling a victim to a looming oversupply in the manmade goods market.
The Washington-based company said it had total liabilities of $44mn with assets totaling $3mn and 100 - 199 creditors.
The development comes amid two major factors heavily impacting the LGD market. Prices of manmade stones have plummeted over the past couple of years, with synthetics trading at a 98% discount off their natural counterparts listed at the Rapoport (RAPI) network. Another issue is the slowdown of the diamond market in general with high stocks of goods stuck in the pipeline. Those factors make it difficult for LGD producers to turn profit.
Financial Times cited Paul Zimnisky, an independent diamond analyst, who said that WD Lab Grown Diamonds had been a “proxy” for the industry and its collapse showed that “it’s getting very difficult for anyone to compete with the Chinese and Indian producers”.
WD Lab Grown Diamonds was founded by diamond industry expert Clive Hill in 2008 as Washington Diamond Corp. It was then bought by Detroit-based private equity firm Huron Capital in 2019. WD Lab Grown Diamonds made $33 million in revenues last year, and brought in $8.36 million so far this year, according to the company's bankruptcy filing.
WD filed for a Chapter 7 bankruptcy that allows businesses to liquidate and terminate their enterprise, and to appoint a trustee to convert the firm’s assets into cash for distribution among creditors.
Theodor Lisovoy, Editor in Chief of the European bureau, Rough&Polished
