Diamonds are the Cyber Monday deal you didn't expect

Diamonds are the Cyber Monday deal you didn't expect
Leading producer De Beers slashes prices by 10% as market struggles.
DEC 02, 2024
By  Bloomberg

by Thomas Biesheuvel

De Beers has cut diamond prices by more than 10% across the board as the world’s biggest producer abandons attempts to put a floor under the slumping market.

The diamond industry has been struck by one of its deepest and most prolonged slumps in decades. What started as a post-pandemic slowdown has spiraled as inflation hit customer purchases, before a collapse in China’s luxury market further eroded demand. Man-made diamonds have also continued to undermine prices.

As rough diamond prices in the secondary market — where traders and manufacturers buy from each other — have steadily dropped through most of the year, De Beers attempted to hold the line. The unit of Anglo American Plc offered its customers more flexibility and the right to refuse goods rather than lowering prices.

Yet on Monday, the company capitulated on that position at its final sale of the year. De Beers cut prices by 10% to 15% for most of the goods it sells, according to people familiar with the situation. That’s the first major price cut since the start of the year and a historically large reduction.

A spokesman for De Beers declined to comment.

The slump in the diamond market comes at a difficult time for De Beers. Its owner, Anglo American, is looking to exit the business as part of a radical restructuring after fending off a $49 billion bid from BHP Group earlier this year.

De Beers wields considerable power in the rough-diamond market. It holds 10 sales each year in which the buyers — known as sightholders — generally have to accept the price and the quantities offered.

Still, even after the steep cut in prices today, the company’s stones are still more expensive than the going rate in the secondary market, the people said, asking not to be identified as the matter is private. The company also removed some of the flexibility it had offered at previous sales.

De Beers typically reserves aggressive price cuts as a last resort. While it keeps pricing secret, the across-the-board cut this month is hefty. 

 

Copyright Bloomberg News

Latest News

'Bogged down' advisors just want to have fun (again)
'Bogged down' advisors just want to have fun (again)

Jim Cahn, of Wealth Enhancement Group, lifts the lid on his firm's partnership model, his views on RIA M&A, and the widely slept-on reason why advisors are merging into larger organizations.

Vestwell unveils new emergency savings account offering
Vestwell unveils new emergency savings account offering

The fintech firm is cementing its status in the workplace savings space with its latest ESA offering, which employers can integrate into their existing benefits package.

'Money Mimosas' and other ways to show your Valentine financial love
'Money Mimosas' and other ways to show your Valentine financial love

Wealth managers offer unique ideas for couples to grow closer emotionally and financially.

Limra research finds financial confidence on the rise among Black American workers
Limra research finds financial confidence on the rise among Black American workers

Survey findings suggest increased sense of financial security and more optimistic 2025 outlook, while highlighting employers' role in ensuring retirement readiness.

DOGE efforts sideswipe muni bonds backed by federal lease payments
DOGE efforts sideswipe muni bonds backed by federal lease payments

Falling prices for some securities within the $4 trillion state and local government debt market spotlight how the push to shrink spending is sending shockwaves across the US.

SPONSORED Record growth: Interval funds emerge as key players in alternative investments

Blue Vault Alts Summit highlights the role of liquidity-focused funds in reshaping advisor strategies

SPONSORED Taylor Matthews on what's behind Farther's rapid growth

From 'no clients' to reshaping wealth management, Farther blends tech and trust to deliver family-office experience at scale.