The End of an Era

De Beers' decision to close its generic marketing offices in the U.S. came as no surprise. Before the 2008 meltdown, De Beers disclosed plans to stop its generic marketing in the U.S., making Forevermark its main marketing driver. The economic fallout did not force a change in the strategy, only in its timing.

Last June, during the JCK Las Vegas show, it became clear that the stay of execution will last until the end of the year, no more. As Rob Bates reported last week, the Diamond Promotion Service (DPS) and Diamond Information Center (DIC) will close in the coming days. De Beers' Lynnette Gould confirmed this to IDEX Online, sadness clearly heard in her voice. This is very understood, as the shift clearly marks the end of an era.

The JWT team may join the Forevermark crew headed by Charles Stanley, but on Wednesday the last details were not yet finalized.

This is a great blow to generic advertising. What will become of it now? Will Alrosa finally rise to the occasion and take the lead it claimed at the St. Petersburg meeting that gave birth to an industry marketing body? Alorsa's current president is not interested in this, and his colleagues at Rio Tinto and BHP Billiton, while interested in such a body, are not moving forward. The agreement collapsed after Alrosa folded.

The slogan A Diamond is Forever is a brilliant one and was part of the strategy first set by Cecil Rhodes to consolidate the market and drive demand. De Beers spent an estimated $200 million annually on generic marketing in the U.S. A Billion dollars every five years. Tens of billions of dollars since the 1930s.

But with a shrinking market share and heavy owner debts, De Beers lost its zest to charge the market and lead it. The problem, it seems, emanates from the top. Six whole months since CEO Penny was hastily sent home, and the company's board of directors did not pick a new CEO yet. How is this multi-billion dollar company managing it self? Who is steering it through the high seas? How does this impact the very important negotiations with Botswana? Are the three shareholders even discussing this? A top De Beers person told me of a meeting with Chairman Nicky Oppenheimer. Oppenheimer said at the meeting that the CEO search is going well, that there are a number of candidates, and that he expects to make a final decision in a few months (!).

De Beers is a large company with a very long history. Changing course for such a large ship is not quick or "on the dime." Whatever issues may prevent making important decisions now, I can't help but try to be optimistic as we are about to enter the New Year.

My hope is that De Beers, still the leading diamond company, together with the large stakeholders, form an industry wide body similar to the Gold Council that will initiate, devise and implement the marketing efforts of the entire industry. Wishing you happy holidays and a prosperous New Year.