De Beers Plans Biggest Global Ad Spend Since 2008

The De Beers Group said Tuesday it will invest more than $140 million in marketing this year—its biggest ad spend since 2008.

The increased investment will be focused on generating further consumer demand for diamond jewelry in the leading markets globally, with the greatest spend targeted in the world’s three largest markets for diamond jewels: the U.S., China and India.

The majority of the advertising budget will support De Beers’ proprietary brands, Forevermark and De Beers Diamond Jewellers. However, the diamond mining and marketing giant said it also will increase its spend on partnership marketing, including with the Diamond Producers Association and India’s Gem and Jewellery Export Promotion Council.

“Total consumer expenditure on diamond jewelry for the last five years collectively has been the highest on record—and the outlook is positive,” said Stephen Lussier, De Beers Group’s executive VP of Marketing and CEO of Forevermark. “However, we cannot take future growth for granted.”

Lussier added, “Increasing our spend from a strong position will help support continued demand in both mature and developing markets, particularly among millennials, who are already the largest group of diamond consumers despite this generation not having yet reached its maximum earning potential.” 

The De Beers statement was short on details, such as when the ad and marketing push will begin and what media is being targeted.

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De Beers Has A New CEO, Bruce Cleaver

Bruce Cleaver

Bruce Cleaver has been appointed the next CEO of De Beers. The announcement was made Friday morning by Anglo American and De Beers and the appointment will take effect on July 1. 

Anglo American, one of the world’s largest mining companies, owns an 85 percent share of De Beers.

Cleaver, 51, will replace Philippe Mellier, who announced his resignation Friday after serving in the top position at De Beers for approximately five years. 

Cleaver served as De Beers’ executive director responsible for strategy and commercial relationships until 2015, also serving as co-acting CEO for a year prior to Philippe Mellier’s appointment in 2011. He was appointed group director of Strategy and Business Development for Anglo American in 2015. 

“Bruce's leadership of De Beers' strategy and its commercial and government relationships working alongside Philippe and over much of the last decade, combined with his time working with us to shape the new Anglo American strategy, provide strong continuity at an important stage in the diamond market's recovery,” said Mark Cutifani, chief executive of Anglo American and Chairman of De Beers. 

Philippe Mellier

Cleaver takes over for the diamond mining and marketing giant at a difficult time, as 2015 was diamond industry’s worst year since the global recession. A decline in consumer demand led by China caused excess inventory of the precious gem and led to an oversupply of diamonds. 

This year marked a mild recovery in diamond demand led by an increase in demand in the United States, which accounts for 45 percent of global diamond demand. 

“The structural dynamics of the diamond market continue to improve, led by the strength of consumer demand for diamond jewelry,” Cutifani said. “With the proven management team in place, De Beers is well positioned to maximize value for all its stakeholders across the diamond value chain.”

Cleaver added: “I am honored to be asked to lead one of the world’s great companies. Diamonds are as relevant to today’s consumers, all over the world, as they were to their parents and their parents before them. Diamonds have also made positive contributions to a host of countries that have used their revenues wisely, to communities and to all who have been touched by their mystique and the practical benefits of responsible mining and ethical sourcing. As the world continues to evolve ever more rapidly, it is our task to ensure that we remain as relevant as we are today and to grow our position in the luxury world.”

Mellier—who previously served as president as Alstom Transport, a French multinational conglomerate—was an industry outsider when he was appointed to lead De Beers in 2015. He said he had always planned to hold the top job at De Beers for five years. 

“Having steered through some of the diamond industry’s toughest times and with the market showing signs of recovery, now is the right time for me to pass the baton to the next generation. I have worked closely with Bruce Cleaver throughout and I have no doubt about his abilities and experience to lead De Beers on the next stage of its journey as the world’s leading diamond company.”

Cutifani noted that Mellier “has led De Beers with great agility, transforming the company’s strategic and operational mindset with a strong customer focus to ensure that consumer desire for diamond jewelry is at the very heart of decision making across the diamond pipeline. He has navigated through structural change and considerable market volatility over the last five years, while cementing De Beers’ unquestioned leadership position.”  

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$35 Million Estimate For 10-Carat De Beers Millennium Blue Diamond

A second statement blue diamond has appeared on the auction market a few months after a similar gem set an all-time auction record.

The “De Beers Millennium Jewel 4,” the largest oval-shaped Fancy Vivid Blue Diamond ever to appear at auction, will be the lead item at Sotheby’s Magnificent Jewels & Jadeite sale on April 5 at the Hong Kong Convention and Exhibition Centre. 

The rare 10.10-carat oval-shaped Internally Flawless Fancy Vivid Blue diamond has an estimate of $30 - $35 million.

The blue diamond, with the utilitarian name of “De Beers Millennium Jewel 4,” is offered for sale from an Asian private collection, Sotheby’s said.

While the estimate for this blue diamond is quite hefty, if achieved it will fall well short of the most expensive gem ever sold at auction. That honor goes to the “Blue Moon of Josephine,” a 12.03-carat cushion-shaped Fancy Internally Flawless Vivid blue diamond that set a world auction record of $48.4 million and a world record price-per-carat for any diamond or gemstone at just over $4 million. It was purchased November, 2015 at Sotheby’s Geneva sale by billionaire Hong Kong real estate investor Joseph Lau, the same person who paid a record $28.5 million for a 16.08-carat cushion shaped fancy vivid pink diamond at Christie’s Geneva sale a day earlier.

The De Beers Millennium Jewel 4 is the only oval-shaped stone among the 12 rare diamonds—eleven blue and one colorless—that form the De Beers Millennium Jewels collection, unveiled by the diamond mining giant in 2000 in celebration of the millennium. All of the gems were unearthed at the historic Cullinan Mine in South Africa, once owned by De Beers. Since their initial appearance at the Millennium Exhibition in 2000, only one of these diamonds has appeared on the open market.

Blue diamonds make up less than 0.1 percent of all diamonds recovered at the Cullinan mine (now owned by Petra Diamonds and renamed the Premiere Mine). These diamonds owe their color to impurities of boron during the stone’s formation, and many are naturally modified with a grey secondary tone, or an uneven saturation with areas of colorless windowing. 

“Blue diamonds of any intensity of color are amongst the rarest of all gems. Highly saturated blue diamonds over ten carats combined with an Internally Flawless clarity grade are extremely rare,” said Tom Moses, executive VP and chief research and laboratory officer of the Gemological Institute of America, which issued the grading report on the gem. “There have been fewer and fewer new rough diamonds discovered over the last decade that produce this color. Most of the recent diamonds offered for sale in this category are coming from private collections—not diamond mines.” 

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Uma Thurman, Gloria Steinem Support Forevermark’s Rhino Rescue Efforts

Uma Thurman attends the Forevermark and Explore Inc. dinner benefiting Rhino Rescue Botswana held at Le Bernardin Prive in New York, New York, Thursday, February 11. Photo by Jennifer Graylock-Graylock.com

Forevermark, the De Beers diamond brand, and custom safari specialist Explore, Inc. joined together Thursday to support rhinoceros rescue efforts in Botswana. More than 100 guests attended a private dinner hosted by Chef Eric Ripert at Le Bernardin Privé to launch Botswana’s Tlhokomela Trust.

“Tlhokomela” means “to protect” in Setswana (the main language of Botswana), reflecting the trust’s mission to perpetuate and expand Botswana’s vast and pristine wilderness areas and protect critically endangered rhinos and other species. Balisi Bonyongo, managing director of Debswana, a mining operation jointly owned by De Beers and Botswana, is chairman of the Tlhokomela Trust.

Gloria Steinem attends the Forevermark and Explore Inc. dinner benefiting Rhino Rescue Botswana held at Le Bernardin Prive in New York, New York, Thursday, February 11. Photo by Jennifer Graylock-Graylock.com

Once widespread in Southern Africa, the white rhino is now listed as ‘near-threatened’ and black rhino ‘critically endangered’ according to the International Union for Conservation of Nature Red List of Threatened Species. A rhino is killed every seven minutes in Southern Africa due to the skyrocketing value of rhino horn in Asia.

Special guests at the dinner included the Tshekedi Khama, minister of Botswana Environment, Wildlife and Tourism, activist Gloria Steinem, actress Uma Thurman, model Coco Rocho and husband James Conran.

Coco Rocha attends the Forevermark and Explore Inc. dinner benefiting Rhino Rescue Botswana held at Le Bernardin Prive in New York, New York, Thursday, February 11. Photo by Jennifer Graylock-Graylock.com

Cherri Briggs, safari specialist and conservation-activist of Explore, Inc., conceived the event after taking Eric Ripert and Uma Thurman to Botswana in an effort to raise awareness of the plight of the rhino.

Forevermark’s support of the Tlhokomela Trust is part of the ongoing commitment by De Beers since the 1970s to protect the diversity of the natural world in which it operates, said Stephen Lussier, CEO of Forevermark and executive VP of Marketing for De Beers. For every acre of land used for mining by De Beers, five acres are dedicated to the conservation of nature.

From left: Cherri Briggs of Explore Inc., Chongu Newman, Gloria Steinem, David Newman, Botswana Ambassador to the U.S. Photo by Jennifer Graylock-Graylock.com

“Our passion for diamonds is matched by our deep sense of connection with the natural world, which we are dedicated to protecting for future generations,” Lussier said.

Both the Orapa Game Park and Jwana Game Park, which surround Debswana’s Orapa and Jwaneng Mines, are home to several thousand animals, including, rhino, giraffe, zebra, baboon, cheetah, leopard and many other animal species. The Jwana Game park spans more than 40,000 acres of protected land, while the Orapa Game park currently consists of 30,000 acres with plans to expand to more than 100,000 acres.

From left: Charles Stanley, president Forevermark, US; Tshekedi Khama, minister of the Botswana Ministry of Environment, Wildlife and Tourism, Gloria Steinem, Stephen Lussier, Forevermark CEO, EVP of De Beers Group. Photo by Jennifer Graylock-Graylock.com

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De Beers CEO Talks Up Forevermark

Diamond drop earrings by Slane with 9.24 round brilliant "exceptional" diamond and 8.14 round brilliant "exceptional" diamond set in platinum.

Diamond brands are not new and in the past decade the number of brands has grown substantially. The effectiveness of diamond branding has been debated in the jewelry industry for just as long. As opposed to an LVMH handbag or Gucci shoes where the workmanship and logos are easy to see; a diamond’s attributes are extremely difficult to see with the naked eye.

The recent announcement that the Hearts on Fire diamond brand is being acquired by the Hong Kong-based retail giant, Chow Tai Fook, for $150 million, shows that at least some brands have real value. The “world’s largest pure-play jeweler” said it will sell the diamond brand through its retail network of more than 2,000 points-of-sale in the Hong Kong, Macau and Mainland China markets.

"Center of My Universe" fancy yellow diamond earrings by Premier Gem set in 18k white gold, 10.05 ctw.

Needless to say Philippe Mellier, De Beers Group CEO, is a believer in brands. Of course part of his job is to promote De Beers diamond brand, Forevermark. To do this he made a rare appearance in the US during Las Vegas jewelry week to help promote a new Forevermark marketing and advertising campaign for the US market.

“There is a demand for branded diamonds and discerning customers are looking for the very best with the name of De Beers behind it to certify that they are the shiniest, the best and what is very, very important is that they are responsibly sourced,” he said.

"PURE Collection" by Precision Set six prong solitaire ring set in platinum, 1.50 ctw.

Each Forevermark diamond has a unique identification number and the Forevermark icon inscribed on the diamond. The inscription is 1/5000th the depth of a human hair. Obviously it cannot be seen by the naked eye. All diamonds over a half-carat also comes with a Forevermark grading report.

“A discerning customer knows that the diamond he or she bought has been inscribed with the Forevermark and logo and the number that makes that diamond very unique and traceable,” he said.

All of the diamonds comes from nine De Beers mines (seven in southern Africa and two in Canada). De Beers’ hold over the diamond industry from mining to market isn’t what it used to be, but it still sells its diamonds through what are known as sights. Sightholders (diamond manufacturers and dealers) are approved by De Beers and are invited to buy diamond rough from its mines. The sightholders have the option of purchasing a box of rough without knowing what is inside based on a price set by De Beers.

"Center of My Universe" double cushion halo fancy yellow diamond ring by H.J. Namdar set in 18k white gold 4.27 ctw.

Among the sightholders are diamond companies that are approved to receive boxes with what Mellier described as containing the top five percent of rough diamonds from De Beers in terms of quality. The 30 diamond companies can do what they want with the rough, including the 5 percent gems. However, if they wish to sell them as Forevermark diamonds, either lose or in jewelry, they will need to return them to De Beers to have them inscribed.

“They are buying these boxes because they are suitable for Forevermark but they don’t always cut and polish them for Forevermark. They can do it for all of their applications,” he said. When they are cut and polished they send them to us for engraving and inscription and they all come with a Forevermark certificate.”

Diamond riviera necklace by Rahaminov set in platinum, 55.26 ctw.

The Forevermark brand was first launched in Hong Kong, China and Japan in 2008. It is now in 1,350 retail doors in 29 countries. Forevermark came to the US in 2011 and now is available at 400 doors. Mellier speaks with pride of the brand’s market reach and its recent milestone of inscribing its one millionth diamond. But sales are something that he didn’t discuss.

Mellier’s rare presence in the US was part of a big push by Forevermark during the annual tradeshows in Las Vegas. It included the first look of its latest US multi-media advertising campaign (“Promise”) that will launch in September and bringing in Waris Ahluwalia, a successful jewelry designer who is perhaps better known as an actor in Wes Anderson films. He designed a jewelry collection with Forevermark diamonds. In addition, throughout the Las Vegas jewelry trade fairs there were displays of Forevermark diamond jewelry created by the brand’s 30 or so diamond manufacturing partners. Mellier said Forevermark is looking for more partners.

Bridal jewelry will account for a little more than half of all Forevermark product, which I found surprising because De Beers pretty much invented the modern bridal jewelry industry in the US. Mellier said romance and emotion will continue to be the focus of the campaign and the jewelry but it will include milepost events throughout one’s life.

“We have all sorts of other jewelry because a lot of customers are repeats,” he said. “You only have one bridal but there are birthdays, wedding anniversaries and for this repeat purchase it’s obviously not bridal.”

The marketing and advertising campaign is designed to hit the target customer seven times, Mellier said. However, he admits that it will never be as prolific as its “A Diamond is Forever” campaign.

“We are unfortunately smaller than before,” he said. “At one time we had 80 percent of the world market. We are still by value the biggest company in the world with slightly more than a third of the world market so we spend according to our need and our volume. Forevermark is what we really want to focus on.”

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Anglo American Receives Regulatory Approval for De Beers Acquisition

London-based mining giant Anglo American said Friday that it has received final regulatory approval to acquire the Oppenheimer family’s 40 percent stake in the De Beers Group.

“Now that all the conditions to the transaction have been satisfied, a formal pre-emption offer will be served by CHL Holdings Limited (representing the Oppenheimer family interests) on Anglo American and the Government of the Republic of Botswana under the terms of the De Beers Shareholders' Agreement,” Anglo-American said in a statement Friday.

The Oppenheimer family, which has owned the De Beers Group for more than 80 years, announced in November that it will sell its remaining 40 percent stake in the diversified diamond company to Anglo American plc for $5.1 billion in cash. Consent under Section 11 of the South African Mineral and Petroleum Resources Development Act 2002 was the final approval required for this transaction to proceed.

The pending acquisition means that Anglo American will increase its current 45 percent shareholding in the world's largest diamond company to up to 85 percent, subject to adjustment as provided for in the agreement. In January 2012, the transaction was approved by Anglo American shareholders, with 99.94 percent voting in favor.

The Government of the Republic of Botswana, which currently owns a 15 percent stake in De Beers has the opportunity to participate in the transaction and increase its interest in De Beers, on a pro rata basis, to up to 25 percent.

In the event that the GRB exercises its pre-emption rights in full, Anglo American will acquire an incremental 30 percent interest in De Beers, taking its total interest to 75 percent, and the consideration payable by Anglo American would be reduced proportionately.

Anglo American expects the transaction to close in the second half of 2012, in line with its previously stated timeline.

De Beers is a family of companies that dominate the diamond, diamond mining, diamond trading and industrial diamond manufacturing sectors. De Beers is active in every category of industrial diamond mining: open-pit, underground, large-scale alluvial, coastal and deep sea. Mining takes place in Botswana, Namibia, South Africa and Canada. The company’s subsidiaries also include the Diamond Trading Company, the rough diamond sales and distribution arm of the company, the Forevermark diamond brand and De Beers Diamond Jewellers, a luxury joint-retail operation with LVMH-Moët Hennessy Louis Vuitton.

Anglo-American is one of the world’s largest mining companies with a portfolio that includes iron ore and manganese, metallurgical coal and thermal coal; base metals – copper and nickel; and precious metals and minerals – in which it is a global leader in both platinum and diamonds. The company operates in Africa, Europe, South and North America, Australia and Asia.

De Beers Uses Augmented Reality to Promote Forevermark

De Beers is allowing people all over the world to “virtually try on” a new jewelry collection that features its Forevermark diamond brand.

The mining giant has turned to augmented reality (AR) to make this possible. AR is a live direct or indirect view of a physical, real-world environment whose elements are augmented by computer-generated sensory input. In this case people using their computers are able to see rings, earrings and pendants from the new Forevermark Millemoi collection sparkle in the light and to see how the jewelry will move as they virtually wear it in a seemingly live 3D environment. Those who wish to experience this can go to the “My Forevermark Fitting” website, see a demonstration of how it works and then download the software. Below is a video of the demonstration.

With a Webcam and a printer, users go to the website, print a page that has seemingly generic images (“symbols”) and cut the images as directed. On the computer screen the paper is transformed into a piece of jewelry. It’s as if the person is looking at a mirror and wearing the product.

“Not only does the experience reflect all the beauty of a Forevermark diamond; it is also a remarkable digital achievement to have jewelry moving with the wearer in real time.” says Stephen Lussier, Forevermark CEO.

My Forevermark Fitting is the first deployment of a 3D virtual try-on for Forevermark diamonds, the branded diamond in which De Beers say is the product of beauty, rarity and responsibly sourcing. The company says only one percent of its diamonds earn the Forevermark brand. Each diamond receives a microscopic inscription of the Forevermark icon and an individual number.

Forevermark worked with creative agency AKQA and 3D augmented reality company, Holition, to create the experience.

Jonathan Chippindale, Holition CEO, says this particular application of its AI technology is the first time the jewelry actually moves when worn.

“Not only is the user able to see real time light move throughout the Forevermark diamond, they are additionally able to imagine the way in which the unique articulated design will flow with their movement; a true reflection of the actual item of jewelry which comes to life when worn,” he said.

Of course, regular readers of this website will be familiar with Holition through its work with jewelry and watch companies Tacori, Boucheron, Tissot and, yes, De Beers.

The Forevermark Millemoi collection is currently available in China, Hong Kong, Japan, India, Singapore and Malaysia.

D.E.F. to Host Fundraiser in London

The Diamond Empowerment Fund is hosting its first international fundraising event, DEF London: Diamonds in the Sky, to be held November 8 at Altitude 360.

Russell Simmons

The benefit and auction is designed to raise awareness and funds for D.E.F.’s mission of empowering economically disadvantaged people in African nations where diamonds are a natural resource. The evening’s honorary chairman is entrepreneur and philanthropist Russell Simmons, co-founder of the D.E.F.

Nicky Oppenheimer, chairman of De Beers, and Peter Sands, group chief executive of Standard Chartered, will be honored for their business leadership, commitment to corporate social responsibility and their work towards health and educational empowerment for the benefit of Africa. The program will also includes remarks by alumni from D.E.F. beneficiary schools; African Leadership Academy and CIDA City Campus, both located in Johannesburg and both models for access to higher education for African youth.

The event at Altitude 360, with its panoramic views of London’s skyline, will bring together a mixture of international leaders in the world’s diamond market, London’s business, social and philanthropic communities, and current supporters of the D.E.F. mission. It will raise money through an exclusive live auction of lots consisting of diamond jewelry, travel packages and celebrity experiences. An online fundraising auction will coincide with the London event from November 2-30 on the Charitybuzz Web site.

The event’s co-chairs are Varda Shine, CEO of the Diamond Trading Company, Anna Martin, managing director, Diamonds & Jewellery Origination & Client Coverage, Standard Chartered Bank, and Justin Etzin, chairman of Altitude London and Seychelles Capital,

The non-profit Diamond Empowerment Fund's mission is to raise funds to go towards supporting education initiatives that will change the lives of African communities based around diamond mines alongside education for Africa.

$1M Rough Diamond Necklace Dazzles at Toronto Film Festival

Allie MacDonald, star of SCORE: A Hockey Musical, walked the red carpet Thursday night wearing a $1 million rough Ontario diamond necklace during opening night at the Toronto International Film Festival.

The 75-ct. rough diamond necklace, contained 27 uncut, unpolished Ontario diamonds valued at $1 million. It was created by Toronto-based jewelry designer Reena Ahluwalia. Its inspiration was the historic Mace of Ontario (Ontario Legislature), also designed by Ahluwalia.

“I wanted to design a statement necklace with an understated natural elegance. Rough diamonds were the perfect choice—understated, pure and just the way nature intended them to be,” Ahluwalia said. “The spiraling form secures the rough diamond gently and is intended to portray social responsibility, signifying the diamond mine and the natural riches of Ontario. The raw brilliance of these rough diamonds is unmatchable. They are organic, inherently one-of-a-kind and make a strong statement about one’s identity, desire to return to nature and of course, diamonds conflict-free origin.”

The event itself was the result of a partnership among luxury jewelry retailer, Birks, diamond company Crossworks Manufacturing and De Beers Canada to promote Ontario diamonds.

Crossworks produced the rough diamonds used for the necklace. It has an exclusive agreement to polish an allocation from the Victor Mine in Ontario and is the only company in the world to provide diamonds that are mined, cut and polished in Ontario. In April 2010, Birks unveiled the first 131 diamonds certified by the Government of Ontario and has been offering a selection of Canadian diamonds in Birks stores ever since. Following the celebrations at the Toronto International Film Festival, the necklace worn by MacDonald will be available for purchase at the Birks store on Bloor Street in Toronto.

Below is a video of MacDonald wearing and talking about the necklace:



 

De Beers CEO to Resign as Diamond Sales Rise 48%

De Beers said Friday that Chief Executive Officer Gareth Penny will step down later this year as the world’s largest diamond producer reported strong first-half sales results, according to news reports.

Penny, 48, headed De Beers for the past five years and will leave after leading the company through a global recession that slashed demand for diamonds, De Beers said Friday.

Chief Financial Officer Stuart Brown and Chief Commercial Officer Bruce Cleaver will act as joint-CEOs while De Beers finds a permanent successor, the company said.

Earlier, De Beers, which produces about 40 percent of the world’s diamonds, said first-half sales of unpolished and uncut stones climbed 84 percent to $2.6 billion, boosted by improved demand from Asia, the company said Friday. In addition, mining giant Anglo American plc, which owns 45 percent of De Beers, said net profits for the diamond company totaled $148 million.

Output more than doubled to 15.4 million carats as the company reopened mines in Botswana and Namibia that were shuttered as gem consumption slumped amid the recession. De Beers said sales were helped by improved retail demand, particularly in India and China, and also in the U.S., the largest market, which accounts for half of the world’s diamond demand.

While rough diamond prices have risen in the past year, returning to levels last seen in June 2008, the global economic climate remains fragile, especially in the U.S., Japan and Europe, De Beers said.

With demand recovering, De Beers expects to produce between 30 million carats and 32 million carats this year, rising to about 40 million carats next year, Penny reportedly said.

In addition to Anglo American Plc, 40 percent of the company is owned by the Oppenheimer family and Botswana controls the remaining 15 percent. Penny told Reuters on Friday that the privately owned De Beers has no intention of issuing an IPO.