Celebrity Sagas Keep Colored Diamonds In The Spotlight

US basketball superstar Kobe Bryant splashed out $4 million on an 8 carat fancy-purple diamond ring for his wife after he cheated on her, and English soccer captain and style icon David Beckham reportedly gave his wife a $1.8 million 10-carat pink diamond ring for similar reasons. Just imagine what the annual sales of colored diamonds would be if every cheating husband would buy his wife a colored diamond as a way of saying sorry darling.

 

In the above two cases it apparently did the trick, but is the enormous media coverage of these gestures of rediscovered love enough to boost the colored diamond sector? If a survey by the recently formed Natural Color Diamond Association (NCDIA) is anything to go by, there’s still a long way to go before colored diamonds really take off.

The NCDIA, the brainchild of founding members DTC Sightholders Rosy Blue and Michael Werdiger Inc, counts rough producers, diamond jewelry manufacturers and retailers among its members. The organization aims to change consumers’ perceptions about colored diamonds and make them a much-desired commodity. But statistics show the association has a long way to go. Although a large percentage of consumers are receptive to colored diamonds, they aren’t being exposed to them very much. An enormous 84 percent of consumers say their local jeweler has never spoken to them about colored diamonds. Of those who have spoken to their jeweler about them, 59 percent say the jeweler has not explained the unique pricing, grading and physical characteristics of colored diamonds.

Consumers have become sufficiently familiar with natural color diamonds, however, to justify the need for the NCDIA. “This is an encouraging trend,” says Nigel Jones, general manager of marketing at Rio Tinto Diamonds. “The North American consumer is becoming increasingly familiar with pink, champagne and other naturally colored diamonds, the majority of which come from Rio Tinto’s Argyle mine in Australia. A possible reason for the increased awareness and familiarity with Champagne diamonds is that a great many respondents are active TV shoppers and these TV outlets frequently discuss diamonds in detail,” said Jones. “In fact, 21 percent of respondents said they purchased their champagne diamond jewelry from a TV shopping channel.”

While privately admitting that colored diamond jewelry may be beyond the budgets of most diamond buyers, jewelers say the jewelry serves an important role in setting an aspirational benchmark and adds variety to the traditional diamond engagement ring inventory. Colored diamonds also work miracles in easing the headaches suffered by many jewelers from the increasingly commodity-type nature of colorless stones.

While shoppers have become used to going online and easily obtaining information on jewelry featuring colorless diamonds, fancy colors retain their uniqueness and allure. And with no shortage of celebrities ready to splash out their hard-earned millions on cementing their love (or making amends for their well-documented philandering), colored diamonds look destined to remain in the media spotlight.

Not everyone believes that colored diamond jewelry is, or should be, beyond the price-range of the general jewelry buyer however. Ben Burne, Marketing Director for diamond and jewelry manufacturer Michael Werdiger Inc, is adamant that a broad assortment of such jewelry means it is widely accessible. “There is a huge range of prices depending on the color, the intensity, hue and so on,” he noted. “The rarest colors such as red, blue and pink would be more expensive than colorless, but there is value to be found in the champagnes and the cognac colors where they would be priced more favorably than an equivalent quality white [colorless] diamond. Although colored stones have always been popular among the wealthy, there is now more of an awareness about them among the general public, since the publicity surrounding the J Lo pink diamond engagement ring and the formation of the NCDIA.”

Burne said colored stones are used in a range of styles and with different metals to provide as extensive a range of choice as possible and make them accessible to a wide range of buyers. “They tend to be used in more fashion type pieces, as well as classic styles, such as three stone rings. At Michael Werdiger, we mainly use 1/5's up to 5 carats, but colored stone pave is popular and bigger stones are always desirable. We use different kinds of metals: platinum, gold, white gold, green gold and pink gold. We combine the stones with the metal to create a piece of beauty.” And on the thorny issue of the impact of synthetic colored diamonds, Burne is totally convinced that they have little impact. Natural is obviously more desirable than synthetic, whether it is colorless or colored. Assuming that full disclosure is made, natural will always have a premium value over a synthetic.”

His views were largely echoed by Zahava Zuber, from the marketing department of US jewelry manufacturer Louis Glick. “I do not believe synthetic diamonds have much of an impact because people want natural diamonds. There have been a lot of imitations over the years but they have not hurt the natural market. When people get engaged or married or celebrate other important events, they do not want stones that are not authentic - they want the real thing.”

Zuber said colored diamond jewelry had become popular in the past 10 years. Pink and blue stones are in demand but yellow stones are by far the most popular color and browns were also making a comeback, particularly deep browns. “Jewelry featuring colored diamonds will remain an elite market to some degree because of the price, but it’s accessible. People will buy a smaller colored stone instead of a larger regular diamond because they want their jewelry to stand out and to be different. We only set the stones in the best metals - platinum or 18 karat gold - because the stones are so expensive that it does not make sense to put them in less prestigious metals.”

Israeli colored diamond dealer Israel Eliezri, president of Colgem, said colored stones became more popular five or six years ago due to the impact of the production of Australian miner Argyle. “When the wider public became aware that pink, red and brown stones were available, demand quickly rose,” Eliezri said. “People want to have color in their lives and that is what colored diamonds do. They add flavor.” The most in demand colors after yellow, which is always the most heavily sought, are pink, purple, blue, gray and a strong demand for brown from the Far Eastern markets, Eliezri said. These trends were confirmed at the BaselWorld show in mid-April. “It seems the global recession is over because buyers were looking for higher quality, larger stones rather than the lesser stones as in past years. It also looked as if companies were stocking up after letting their inventories run down.”

Eliezri, who buys his stones from local Israeli traders, said the cost of colored stones can be double the cost of colorless diamonds for medium quality goods while for higher quality gems “the sky is the limit”. He described normal orders from clients as being for 1-3 carat fancy diamonds which he normally does not have a problem supplying. “It is when you need to find a larger intense or vivid stone that you run into problems and they take more time to fill, especially when the order is for higher clarity.”