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Do Lab-Grown Diamonds Have a Future in Luxury Jewelry?
Experts have been predicting that price stabilization is just around the corner, but prices for lab-grown diamonds just keep falling, as they have done for years. Even as consumers have enthusiastically accepted lab-grown diamonds, higher demand and periods of tighter supply have not driven up prices. As a result, the market for LGD has shifted from luxury to fashion and fine jewelry. Do plummeting prices and wider availability spell the end of LGD as a luxury product? Maybe not. Who is selling the diamond, what a designer does with a diamond, and how a diamond is produced all influence what a consumer might be willing to pay.
A Piece’s Overall Value
It’s not only the gemstone that contributes to a piece’s value. Lab-grown diamonds can be used as accent stones in gold and platinum luxury jewelry centered on other types of gemstones, even mined diamonds. In these pieces, lab-grown diamonds don’t detract from the overall value. Tag Heuer, for example, uses LGD in their luxury watches. The piece doesn’t get its value from stones themselves but from the overall design, the brand name, and in the case of a watch, its function as a finely tuned piece of precision machinery.
Diamonds, we’re told, are valuable because they are rare. Rarity is what also helps impart value to one-of-a-kind designs. A talented designer can do previously unimaginable things with lab-grown diamonds, such as this 4 ct band cut from an 8 ct lab-grown diamond, or this ring, made entirely from a single 45 ct lab-grown diamond. Though not sold commercially, the latter piece raised $717,000 for charity.
These sorts of innovations can pave the way for the use of LGD in luxury jewelry. Unique designs might involve unique diamonds, like Fred’s Audacious Blue, the world’s first blue lab-grown diamond. These kinds of designs, whether they push the envelope in terms of creativity, technology, or sheer size, are examples of the kinds of unique designs that LGD can bring to the luxury market.
At a time when the whole world needs greater access to sustainably produced food and clothing, eco-friendly goods are still more expensive than mass-produced ones. Anything hand-crafted, small-batch, or limited-edition can gain some measure of exclusive, premium, or even luxurious cachet. Perhaps responsibly produced LGD could occupy the same niche. Diamonds made using energy-efficient methods in labs powered by clean energy by well-compensated workers could appeal to a certain segment of luxury consumers.
That’s exactly what LVMH is banking on. Last year, as part of an investment group whose mission is to invest in, as Forbes reported, “iconic luxury brands, recognized for their distinctiveness and the quality of their products and services, with significant growth potential,” LVMH invested $90 million in Israeli grower Lusix. What makes Lusix special? They are touted as the world’s first 100% solar-powered lab. That these diamond facilities are fully powered by solar energy is what differentiates them from the typical lab-grown diamond. With the FTC keeping a close eye on retailers who use the word “sustainability” a little too loosely, a brand that can back up those claims and demonstrate a true commitment to responsible production will stand apart from—and above—other LGD brands.
The Future is Still Uncertain
The future of lab-grown diamonds is a contentious space. They continue to defy the expectations of experts, and fashion, fine, and luxury jewelry brands and retailers are left to just try different approaches to see what works. Even as prices for LGD fall, luxury brands are looking for ways to incorporate them into their priciest pieces. There is potential for LGD at all price points, but it remains to be seen how the market will look once supply and prices stabilize—or even if they will stabilize.