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De Beers hasn\u2019t exactly been sparkling lately. The diamond industry\u2019s most famous name has grappled with weak demand for the precious stone since a peak during the COVID-19 pandemic<\/a>, alongside the growing popularity of lower-priced, lab-grown diamonds.\u00a0<\/p>\n While De Beers\u2019 sales<\/a> have suffered, the company\u2014which once held a near monopoly of the global diamond trade\u2014has also had to deal with the recent announcement by parent company Anglo American that it planned to sell or spin it off<\/a>.\u00a0<\/p>\n Despite this daunting set of challenges, De Beers CEO Al Cook sees a bright future, in part by making De Beers, the company that coined the slogan \u201cdiamonds are forever,\u201d a big deal in luxury retail.\u00a0<\/p>\n \u201cI\u2019m really excited by the idea that we can really deploy our full strategy all the way to creating the world\u2019s greatest jewelry maison [house], which would not be a natural part of a mining company,\u201d Cook told the Financial Times<\/em><\/a>.<\/p>\n Specifically, he aims to double the number of De Beers retail outlets to compete with luxury peers like Tiffany and Cartier. Selling polished diamonds through own-brand and independent channels would mark quite a strategic departure\u2014currently the business only sells to a select group of customers.<\/p>\n To further sharpen De Beer\u2019s strategy, Cook has also decided to retreat from lab-grown diamonds, a fast-growing segment it entered about six years ago<\/a>.\u00a0<\/p>\n It was always a tricky path to tread for the jeweler as the lab-made variety appealed to sustainability-minded customers, but also competed directly with its natural diamonds\u2014just at a lower price tag.<\/p>\n Over the last year, the company estimates $4.5 billion worth of synthetic diamond sales cannibalized what could have amounted to $7 billion in natural diamond sales. That resulted in De Beers\u2019s lowest earnings since 2001, the FT<\/em> reported.<\/p>\n The company\u2019s \u201cOrigins\u201d strategy, launched last week, will see it double down on its \u201cindustry-leading portfolio of mining assets, its iconic retail brands and its track record of generating desire for diamonds,\u201d De Beers said in a statement.\u00a0<\/p>\n Whatever strategy De Beers takes, it\u2019s going to have to take it alone. British mining group Anglo is offloading the diamond business in a bid to restructure following a failed $43 billion takeover bid from Australia\u2019s BHP.\u00a0<\/p>\n How exactly it will do so remains to be seen, given the effect the diamond slump would have on its sale price, though Reuters <\/a>has reported a public listing is being considered.\u00a0<\/p>\n In any case, without the comfort of Anglo\u2019s balance sheet\u2014which De Beers has enjoyed since 2011, although its connection with its parent goes back nearly 100 years\u2014the diamond firm will arguably have less protection from the vagaries of the commodities cycle.<\/p>\n However, Cook has tried to calm nerves by assuring partners that the company could operate with more flexibility under a new ownership structure.\u00a0\u00a0\u00a0<\/p>\n \u201cWe are reinventing every part of De Beers to grow value,\u201d Cook said in a statement<\/a> last week.<\/p>\n<\/div>\n\nDropping lab-grown diamonds<\/strong><\/h2>\n
Going solo<\/strong><\/h2>\n