When De Beers executives laid out their turnaround strategy last week at JCK Las Vegas, they didn’t talk much about their plans for a new polished division and an increased retail presence. But judging from reports that have emerged since, both seem an important part of the mix.
Polished sales will be overseen by Mahiar Borhanjoo, former sales director of the Diamond Trading Company, De Beers’ old marketing arm, who is returning to De Beers after 11 years. During that time, Borhanjoo served as managing director at Venus Jewel International and CEO of UNI.DIAMONDS. He is married to Feriel Zerouki, De Beers’ senior vice president of international affairs.
The polished unit will source diamonds for De Beers projects, according to a Financial Times story.
“De Beers will subcontract manufacturers to turn a minority of its rough stones into polished diamonds for sale in its own-brand stores and other independent retail channels,” reported the FT. “This is a change from the current setup, where it sells rough diamonds to a select group of customers and buys them back as polished stones.”
De Beers spokesperson David Johnson says the company also believes “there’s a good opportunity to use [De Beers-sourced polished] as a promotional tool outside of our own brands to create…a compelling source-to-store narrative.
“We see an opportunity for a differentiated offering that will support wider demand for diamonds sourced by De Beers with an interesting provenance story, and that will in turn benefit sightholders, [as they] will be able to carry the provenance story for their De Beers supply through the supply chain on Tracr.”
Johnson adds that any polished sales “will very much be at the margins, with the vast majority of our supply going through our core sightholder sales channel.”
On the retail side, De Beers CEO Al Cook told the FT that the company plans to grow De Beers Jewellers to 100 stores by the end of the decade. (It currently numbers 40.)
“I look at the future of diamonds, it is way beyond mining,” he said. “I’m really excited by the idea that we can really deploy our full strategy all the way to creating the world’s greatest jewelry maison, which would not be a natural part of a mining company.”
Analyst Paul Zimnisky suspects the impending sale of De Beers might be fueling these concepts.
“Having a more established downstream brand could also increase the perceived intangible value of De Beers for an acquirer,” he says. “It seems like they are aiming to lean more towards the downstream luxury-branded jewelry segment of the business. Historically, that is a higher margin segment of the supply chain.”
Carrying out the retail expansion could be challenging, says Zimnisky, as “the capital required to really move the needle can be significant, which is why there are so few household-name high-end jewelers.”
De Beers Jewellers announced this week that it is opening a flagship store in Paris in winter 2025. The two-story, 5,000-square-foot boutique will be designed by renowned architect Pierre-Yves Rochon and located on shopping strip Rue de la Paix. De Beers Jewellers has two other locations in the city, inside the Printemps and Galeries Lafayette department stores.
Top: Al Cook speaking at the JCK show in Las Vegas (photo courtesy of De Beers)
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