Same lus­ter — from a lab

These gems could put ‘blood di­a­monds’ out of busi­ness, if value-minded mil­len­ni­als say ‘yes’

The Washington Post Sunday - - BUSINESS - BY ABHA BHATTARAI

Jerry Singh started his search for a di­a­mond ring with $5,000 and a link to his girl­friend’s Pin­ter­est page.

“Hon­estly, I had no idea what to look for,” he said. “I was clue­less.”

But the 30-year-old soft­ware de­vel­oper quickly nar­rowed his search to lab-made di­a­monds. His girl­friend had voiced con­cerns about “blood di­a­monds,” he said, and it was clear that his money would go a lot fur­ther if he opted for a gem­stone that had been shaped over a few weeks in a lab in­stead of a bil­lion years un­der­ground.

“I knew I was get­ting a lot more bang for my buck,” said Singh, who lives in New York. “When I saw the size and clar­ity of the di­a­mond, I was sold.”

Lab-grown di­a­monds, which are qui­etly ar­riv­ing in stores across the coun­try, are in­creas­ingly mar­keted to younger Amer­i­cans as an eth­i­cally sourced al­ter­na­tive to tra­di­tional di­a­monds. They cost about 20 per­cent less than mined di­a­monds and, ac­cord­ing to ex­perts, are in­dis­tin­guish­able to the naked eye. And yes, they sparkle. (All di­a­monds are made of just one el­e­ment: car­bon.)

“From our per­spec­tive, syn­thetic di­a­monds are di­a­monds,” said Stephen Moris­seau, a spokesman for the Ge­mo­log­i­cal In­sti­tute of Amer­ica, a non­profit or­ga­ni­za­tion that over­sees the in­terna- Jew­eler Arthur Aru­tu­nian, 65, top, re­sizes the lab-made­di­a­mond en­gage­ment ring se­lected by Justin Dunlap, above with his girl­friend’s mother, at Marks Jew­el­ers on July 9 in Mont­gomeryville, Pa. tional di­a­mond grad­ing sys­tem. “They’re not fakes. They’re not cu­bic zir­co­nias. They have all the same phys­i­cal and chem­i­cal prop­er­ties of a mined di­a­mond.”

The in­tro­duc­tion of the mass-mar­ket di­a­monds could have sweep­ing im­plica-

tions for the $80 bil­lion in­dus­try, which for decades has re­lied on the per­ceived scarcity of the stone to drive up val­ues. Sales of lab-made di­a­monds, es­ti­mated to be about $150 mil­lion, could grow to $1.05 bil­lion by 2020, ac­cord­ing to a re­cent re­port by Mor­gan Stan­ley.

Jew­elry man­u­fac­tur­ers say they’re see­ing dra­matic growth. At least one jew­elry man­u­fac­turer says its sales of lab-made di­a­monds are nearly dou­bling each month, as mil­len­ni­als in par­tic­u­lar — a gen­er­a­tion bogged down by stag­nant wages and bil­lions in stu­dent debt — opt for the low­er­priced gem­stones.

“To­day’s gen­er­a­tions are buy­ing iPads over ear­rings,” said Amish Shah, pres­i­dent of ALTR, a di­vi­sion of R.A. Riam Group, a New York-based whole­sale jew­eler. “The lust for di­a­monds has gone down over the last 10 years, and we’re try­ing to get that back.”

Since 2012, Shah has in­vested tens of mil­lions of dol­lars in tech­nol­ogy to cre­ate gem­stonequal­ity di­a­monds. His first line hit stores last sum­mer and is now sold at more than 100 lo­ca­tions.

Other com­pa­nies also have made for­ays into lab-made gem­stones. Di­a­mond Foundry, a Cal­i­for­nia-based com­pany that counts the ac­tor Leonardo DiCaprio among its in­vestors, sells its wares at Bar­neys New York. Mi­aDonna, a jew­eler based in Port­land, Ore., calls its prod­ucts “eco di­a­monds” and uses re­cy­cled met­als to cre­ate en­gage­ment rings, pen­dants and bracelets.

At Ada Di­a­monds, a Sil­i­con Val­ley start-up, shop­pers can cus­tom­ize di­a­monds in a range of col­ors, in­clud­ing white, pink, gray and black. The com­pany can also ex­tract car­bon from a per­sonal me­mento — a bou­quet of roses, say, or a PhD dis­ser­ta­tion — and “pres­sure-cook it into a di­a­mond,” ac­cord­ing to Jason Payne, who co-founded the com­pany with his wife, Lind­say Rein­smith. Sales are ex­pected to triple this year.

“There was def­i­nitely a time when re­tail­ers were very re­sis­tant to bring­ing these prod­ucts into their stores,” Rein­smith said. “But it’s be­gin­ning to catch on.”

The jew­el­ers are not above trash-talk­ing the com­pe­ti­tion.

“These are,” Payne said, “a far su­pe­rior good to dirt di­a­monds.”

Not all agree. Dino Pampil­lo­nia, co-owner of Pampil­lo­nia Jew­el­ers in North­west Wash­ing­ton, says he doesn’t — and won’t — carry lab-cre­ated di­a­monds.

“As far as I’m con­cerned, a di­a­mond can’t be man-made,” he said. “The whole point is that they’re rare.”

As for Singh, the love-struck soft­ware de­vel­oper, he went on­line this sum­mer and bought a ring with a 1.4-carat lab-made di­a­mond ($5,500). He pro­posed to his girl­friend the next day, back­stage at a John Leg­end con­cert. “She loved the ring,” he said. And she said yes.

A ‘dor­mant’ mar­ket

A few years ago, Shah got the nag­ging feel­ing that mil­len­ni­als weren’t much in­ter­ested in di­a­monds. They were putting off get­ting mar­ried, and when they did get en­gaged, di­a­monds didn’t seem to be the req­ui­site to­kens they once were.

“The de­sire for di­a­monds has waned,” said Shah, a fourth­gen­er­a­tion jew­eler. “It’s not dead, but it’s def­i­nitely dor­mant.”

The prices of high-qual­ity di­a­monds have fallen by as much as 80 per­cent over the past 30 years, when ad­justed for in­fla­tion, ac­cord­ing to the RapNet Di­a­mond In­dex, an in­dus­try bench­mark.

Sales of di­a­monds have stalled in re­cent years — rough-di­a­mond sales fell 25 per­cent in 2015, lead­ing to a 15 per­cent drop in prices — and jew­el­ers say the com­ing years are likely to be crit­i­cal for the in­dus­try, as mil­len­ni­als hit peak spend­ing po­ten­tial and be­gin set­tling down.

“It is clear that volatil­ity in the di­a­mond sec­tor is not a short­term phe­nom­e­non but the new nor­mal,” Bruce Cleaver, chief ex­ec­u­tive of di­a­mond giant De Beers Group, wrote in a 2016 re­port. “The pace of change is quick­en­ing and, as a sec­tor, we can­not look to the past for so­lu­tions to to­mor­row’s chal­lenges.”

In that vein, Shah has tossed out the no­tion that “a di­a­mond is for­ever” — a tagline cre­ated to pro­mote De Beers’s en­gage­ment rings in 1947 — and taken a de­cid­edly dif­fer­ent ap­proach: try­ing to con­vince mil­len­ni­als that di­a­monds are about pas­sion, not com­mit­ment. (That’s not to say the di­a­monds, which are chem­i­cally iden­ti­cal to the old-fash­ioned ones, won’t last for­ever.)

To il­lus­trate the point, he brought on newly en­gaged cou­ple Nick Viall and Vanessa Grimaldi from the real­ity show “The Bach­e­lor” — a fran­chise not ex­actly as­so­ci­ated with long-last­ing re­la­tion­ships — to pro­mote his line of lab-cre­ated di­a­monds.

“The whole culture sur­round­ing re­la­tion­ships has changed — it’s not about be­ing with some­one for­ever any­more, or about Cinderella and Prince Charm­ing,” he said. “To­day’s re­la­tion­ships are messy, they’re in­tense. They’re about the here and now.”

Which, he says, is also the best way to de­scribe the process for cre­at­ing di­a­monds. It be­gins with a pa­per-thin sliver of di­a­mond, which jew­el­ers call a seed. It is placed in a high-heat, high­pres­sure cham­ber, where gases work to trans­form the seed. Car­bon atoms de­velop and at­tach to the seed, cre­at­ing a di­a­mond bit by bit.

From start to fin­ish — in­clud­ing cut­ting and pol­ish­ing — it takes about eight weeks.

The tech­nol­ogy has been in the works for decades — lab-cre­ated di­a­monds have long been used for in­dus­trial pur­poses — but it’s only in the past few years that lab­o­ra­to­ries have been able to con­sis­tently cre­ate gem-qual­ity white di­a­monds, Shah said.

“We’re see­ing change, and we’re em­brac­ing it,” Shah said. “Is there un­easi­ness among jew­elry com­pa­nies? Sure. This is an in­dus­try that hasn’t seen any change in a very long time.”

A mat­ter of pri­or­i­ties

Jenna Franke has thought a lot about her fu­ture en­gage­ment ring.

But a tra­di­tional di­a­mond? Eh, she says. “I don’t care very much about that. I’ve al­ready told my boyfriend I don’t want a mined di­a­mond.”

The 25-year-old, who is get­ting a doc­tor­ate in chem­istry at the University of Cal­i­for­nia at Berke­ley, says she would pre­fer a lab­made di­a­mond or moissan­ite, a sil­i­con car­bide gem­stone that re­sem­bles a di­a­mond.

“I do want a pretty stone, but I don’t want that at the sac­ri­fice of other things I’d rather have,” Franke said. “My pri­or­i­ties when I’m done with my PhD are go­ing to be buy­ing a house or trav­el­ing.”

Her friends, she said, have sim­i­lar plans that they’ve men­tioned to their boyfriends.

“But of­ten their boyfriends are re­sis­tant to the idea,” she said. “There is so much so­ci­etal pres­sure on the man to buy a di­a­mond to make it real and of­fi­cial.”

Roughly 70 per­cent of U.S. mil­len­ni­als say an en­gage­ment ring “has to have a di­a­mond,” com­pared with 67 per­cent of non­mil­len­ni­als, ac­cord­ing to a re­cent study by Bain & Co.

But even as young Amer­i­cans hold tra­di­tional views, jew­el­ers like Shah ob­serve that their pri­or­i­ties are changing. A re­cent study by De Beers, for ex­am­ple, found that mil­len­ni­als would rather splurge on over­seas hol­i­days, week­end get­aways and elec­tron­ics be­fore buy­ing di­a­monds.

“The num­ber one rea­son mil­len­ni­als are buy­ing cre­ated di­a­monds? Be­cause of the sig­nif­i­cant price dis­count,” said Alek­sey Mar­tynov, a prin­ci­pal in Bain’s Moscow of­fice who stud­ies the di­a­mond in­dus­try. “Econ­omy trumps all for now.”

But long term, the value of the earth-made va­ri­ety may fare bet­ter.

“They won’t hold their value,” Pampil­lo­nia said of lab-grown di­a­monds. “Ten years from now, the tech­nol­ogy will be cheaper and they’ll barely cost any­thing — kind of like flat-screen TVs. They don’t have any re­sale value, as far as I’m con­cerned.”

At Mark’s Jew­el­ers, out­side of Philadel­phia, sales of lab-cre­ated di­a­mond are up 40 per­cent this year. But it’s not just younger cus­tomers who are in­ter­ested.

“You would think these would only ap­peal to mil­len­ni­als, but it’s been un­ex­pect­edly broad,” owner Jim Brusilovsky said. “We’re sell­ing them to ev­ery­one from 20year-olds to cou­ples cel­e­brat­ing their 35th wed­ding an­niver­sary.”

But, he said, lab-cre­ated di­a­monds ac­counted for just 5 per­cent of his di­a­mond sales last year. This year, he ex­pects that fig­ure to grow to about 8 per­cent.

“It’s kind of like with hy­brid cars,” he said. “They ap­peal to a cer­tain kind of cus­tomer — tech­hounds, peo­ple con­cerned about the en­vi­ron­ment — but not nec­es­sar­ily ev­ery­body.”

Hil­lary Gack had never heard of lab-cre­ated di­a­monds be­fore Sun­day, when her boyfriend of eight years got down on one knee to pro­pose. He had picked out the ring a few weeks ear­lier, af­ter months of search­ing for a di­a­mond ring. When one fi­nally caught his eye, he was sur­prised to hear it had been cre­ated in a lab — and even more sur­prised to learn it was within his bud­get.

“I didn’t know I’d be able to af­ford a ring like that,” said Justin Dunlap, 25, of Southamp­ton, Pa. “It just had that ‘wow’ fac­tor.” His fi­ancee agreed. “I never thought I would wear some­thing so beau­ti­ful,” she said.

In “ten years, the tech­nol­ogy will be cheaper and they’ll barely cost any­thing — like flat-screen TVs.” Dino Pampil­lo­nia, co-owner of Pampil­lo­nia Jew­el­ers in Wash­ing­ton



Clock­wise, from top left: A com­puter pro­gram de­signs di­a­mond rings at Mark’s Jew­el­ers in Mont­gomeryville, Pa. Arthur Aru­tu­nian, who works at Mark’s, holds a ring se­lected by Justin Dunlap of Southamp­ton, Pa. Cara Rosen­feld and Ryan Bin­drim, both 28, shop for a lab-made-di­a­mond en­gage­ment ring at Mark’s. Aru­tu­nian, who has been a jew­eler for 40 years, re­sizes Dunlap’s ring, which is also a lab-made di­a­mond. Ar­ti­fi­cial di­a­monds are cheaper and, ac­cord­ing to ex­perts, look no dif­fer­ent to the naked eye than mined di­a­monds.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.