The new fine jewelry company is a leader in rare fluorescent stones.
All diamonds shimmer when light hits them. Under master hands, they are cut into interesting shapes that spark joy. Gems from Luminous Diamonds, a new fine jewelry brand, however, have an attribute that many precious stones don’t: They glow.
Luminous Diamonds’ parent company, Alrosa, is a leader in sourcing fluorescent stones, which are formed under unique geological conditions that leave trace elements during the carbon crystallization process. As a result, Luminous Diamonds shine extra bright in the sun and, most intriguingly, emit a blue glow under UV light.
“These diamonds are stunning, luminous, and make a statement,” says Rebecca Foerster, Alrosa’s president of North America. “They reflect the way modern women wear confidence like a rare jewel, and they dare us all to stand out by sharing our inner selves. Greatness in people, like diamonds, is made under pressure. When a woman follows her own inner light, others see it. Our diamonds are an enduring reminder of this light.”
To highlight this point, Luminous Diamonds enlisted female leaders from disparate industries to model its debut collection in a campaign titled Greatness Under Pressure. They are WNBA athlete Skylar Diggins-Smith, attorney and travel writer Cynthia Andrew, violinist Ezinma Ramsay, gender-fluid advocate Elliott Sailors, model Denise Bidot, and photographer Marian Moneymaker.
The 28-piece collection consists of brilliants and pavé diamonds on open-work hexagon settings. They include long necklaces with pendants, crawler and chandelier earrings, and bracelets. Each design comes with an illuminator charm that emits UV light so you can get that inner glow all the time.
Russia’s Alrosa the world’s top diamond miner by volume, is betting on a new strategy to boost its sales amid an industry-wide slowdown that has hit small companies the hardest.
The state-owned company is now selling naturally occurring fluorescent diamonds mixed with others. At the same time, it’s holding talks with global jewellery retailers about jointly marketing its ‘Luminous Diamonds’ brand, which uses the glowing stones.
Fluorescence, a bluish glow produced by ultraviolet rays (UV), is a characteristic of 25% to 35% of diamonds, according to the Gemological Institute of America (GIA).
The feature has traditionally been seen as a negative attribute as it can make a diamond appear “milky” or “oily” in direct sun or UV light. Alrosa’s marketing efforts are centred on changing those perceptions.
Glowing diamonds are most common in Russia and Canada due to their proximity to the Arctic, where they are usually found.
GfK market research agency recently conducted a study involving over 4,000 jewellery consumers to determine how they perceived fluorescent diamonds.
The survey revealed that 74% of the respondents in the US didn’t know what they were or were poorly informed about them. When educated, however, over 82% of respondents said they would consider buying a diamond with such a feature. And almost 60% of customers, mostly millennials, expressed their willingness to pay as much as 15% more to obtain a fluorescent diamond.
About half of all diamonds produced globally have some fluorescence, but those in which the feature is “strong” — the focus of Alrosa’s campaign — represent as much as 5-10% of global supply.
Global demand for all types of diamonds fell between 2018 and 2019, affecting small stones producers the most, due to an oversupply in that segment that dragged prices down.
Increasing demand for synthetic diamonds also weighed on prices. Man-made stones require less investment than mined ones and can offer more attractive margins.
Big companies have not been immune to the downward trend. De Beers, the world’s No. 1 diamond miner, reported in February its worst set of earnings since Anglo American acquired it in 2012.
Russia’s Alrosa is talking to several global jewelery retailers about jointly marketing the miner’s jewelery brand that uses fluorescent diamonds, as it strives to create a new niche for the natural stones.
Diamond miners, which have long excelled at marketing, are seeking new approaches to battle falling demand and competition from diamonds manufactured in laboratories.
“We are completing talks with several major companies in different regions,” Alrosa Chief Executive Sergei Ivanov told Reuters.
Alrosa, which now sells these diamonds mixed with others in “lots”, expects the retailers to start offering its fluorescent stones in a year under the brand “Luminous Diamonds”, which it has recently created, in separate corners of their stores.
The aim is to create a new market for stones with fluorescence, often a blueish glow visible under light, that are still considered by many traders as being of lower quality.
Global demand for all types of diamonds has been hit by a trade war between the United States and China, the world’s two biggest diamond markets. Prices for smaller stones have fallen as deliberate output reductions have yet to remove oversupply. Alrosa and its competitors, chiefly Anglo American’s (AAL.L) De Beers, are betting on a “value over volume” strategy. Alrosa expects to produce 38.5 million carats in 2019 but will sell only 32 million to 33 million carats, stockpiling the rest until better days.
Alrosa does not disclose the names of the retailers it is talking to but says it has no plans to start its own retail business. Product sales will be organized by retailers via their own distribution chains.
“Our aim is to supply fluorescent polished diamonds – cut by Alrosa or its clients – to retailers and provide marketing support, including jewelery design if needed,” Ivanov said.
Fluorescence, a bluish glow produced by ultraviolet rays from a lamp or the sun, is a characteristic of 25% to 35% of diamonds, according to the Gemological Institute of America (GIA). It is not bad for the precious stone, according to GIA, and it is not a grading factor like the traditional 4Cs — color, clarity, cut and carat weight — used to determine quality.
About half of all diamonds produced globally have some fluorescence, while 3% to 10% have strong fluorescence, Ivanov said.
But such diamonds are more difficult to sell as many traders now consider stones with more fluorescence as lower quality, so they often trade at a 25% to 45% discount, even though they could demand a premium several decades ago, he said.
With global annual rough diamond sales of $15 billion and diamond jewelery demand at $85 billion, any new marketing niche is attractive for the entire supply chain.
Diamond industry players have long been betting on “millennial”, born between the early 1980s and early 2000s, and “generation Z”, born from the mid-1990s to early 2000s, as drivers of growth in jewelery demand as their spending power rises.
Alrosa aims to woo this generation with florescent stones.
Recent research conducted by a consulting company for Alrosa in the United States and China showed millennial liked the stones for their unusual quality in jewelery, Ivanov said.
“We saw that it can become a fashionable product and interesting for these young people,” he said.
The same research also showed positive results among women, so the “Luminous Diamonds” brand sought to appeal to women’s independence and purchasing power, which was rising in the United States, China and India, the CEO added.
“It will be a special line. A diamond which glows in a night club, in a theater or even in the rays of sun,” Ivanov said. “We see this demand in opinion polls and are sure that we will convert it into sales.”