| Woman’s best friend
London, Nov. 21: More than 110 years after it mined its first rough diamonds, De Beers, the dominant force in the world diamond trade, is turning its hand for the first time to selling the finished product, diamond jewellery, to the public.
But De Beers’ $ 400-million foray into retailing, a joint venture with the luxury goods maker LVMH Moet Hennessy Louis Vuitton called De Beers LV, is getting off to an awkward start.
Alain Lorenzo, the chief executive of De Beers LV, said Wednesday that the opening of the flagship store on Old Bond Street, just down the block from Cartier and Tiffany's in central London, had to be postponed for 10 days. The problem, embarrassingly enough for the world's rough-diamond giant, is too few diamonds. The store had not yet received enough diamond-studded jewellery items from suppliers to fill its showcases and display window.
When the doors do open — the plan now is for a December 3 debut, 10 days late but still in time for the main holiday shopping rush — the store will offer diamond items ranging from $ 750 trinkets to — theoretically at least — the 203-carat De Beers Millennium Star, which was the object of a failed November 2000 robbery at London’s Millennium Dome. Lorenzo said the stone was worth “several dozens of millions of dollars” and is not kept at the store.
The company will hold an opening party for the store on Thursday evening, with fashion models and celebrities like Sophie Dahl expected to attend. A spokeswoman for De Beers LV, Joan Parker, said that one guest at the party will be Shirley Bassey, who sang the title song for the 1971 James Bond movie “Diamonds Are Forever.”
The London store is meant to be the forerunner of a chain that would include a New York store on the corner of Fifth Avenue and 55th Street, which the company hopes to open in 2004.
The United States accounts for half the world’s $ 60 billion in sales of cut and polished diamonds, but it is also problematic for the parent company, De Beers, because of a variety of antitrust investigations that preclude it from openly doing business there.
For this reason, De Beers, which is based in South Africa, has sought to draw a distinction between itself and the retail venture, De Beers LV. Though De Beers' managing director, Gary Ralfe, is also chairman of De Beers LV, “De Beers management has no executive role in this company,” Lorenzo said in an interview.
De Beers itself sells only rough diamonds, and controls two-thirds of the $ 8 billion market in uncut stones. But it does not do business directly with its own retail joint venture. Instead, Andrew Coxon, the chief diamond buyer and one of a number of De Beers executives who have moved over to the retail joint venture, has been scouring wholesale diamond markets, particularly in Russia and Canada, to find the kinds of cut stones that suit his purpose. They must, he said in an interview, be of high quality and be certified as coming from sources untainted by conflict. To get such stones, he said, De Beers LV must “stand in line behind Tiffany and Cartier” to buy from independent traders or from some of the 120 “sight-holders”, the diamond dealers who are authorised to buy rough stones from De Beers for cutting, polishing and trading.
Coxon said that the retail venture's diamonds will be branded, with the name De Beers indelibly imprinted in minute characters on each stone of more than one-quarter carat. The logo will be visible only under 200-times magnification.
De Beers decided to become a retailer, Coxon said, because the company realised that “other luxury products were out-performing diamond jewellery,” and because it wanted to reinvigorate the fragmented retail trade and increase global demand for diamonds.