Fine Jeweler Takes Stand on Lab Growns

Nobody in the diamond industry, it seems, has been untouched by the rise and rise of lab growns.

Even high end jewelers, with inventory way beyond the price range of typical lab grown buyers, are feeling the effects.

One example is fine jewelry brand, New York-based Arazi, which only sells goods with a retail value over $10,000.

It describes itself as "a family-run jewelry brand creating the finest pieces for the contemporary and sophisticated woman.

The company has seen a drop in sales at the US retailers it supplies that also stock lab growns. So it's told them in no uncertain terms that it's not prepared to continue supplying them via its asset/memo program.

"I want to place our chips in the right place," Josh Arazi, the company's vice president and creative director tells IDEX Online.

"It's not that I'm not going to sell to them. I will continue to sell to those jewelers, but I will not offer any asset/memo program.

"Take for example a jeweler that has $150,000 of jewelry, with $75,000 committed. My $75,000 is better parked elsewhere, maybe even nearby, in a store with good customer confidence."

He says there's a marked trend among the retailers he supplies. Those who also sell lab growns are selling less in the way of Arazi goods.

And it's not as simple as them switching from natural to lab grown. In some cases they're not buying at all.

He describes how a customer at one of his retailers was interested in buying a natural diamond bracelet, but changed his mind after seeing a showcase of lab grown goods.

"The higher end you go, the less of a chance that consumer is buying into the lab grown, but it's still there," he says.

"My theory is that maybe their clientele see they're carrying lab grown and think instead of spending $30,000 here, I'll spend $3,000 or $4,000. The credibility in the eyes of the true high-end consumer has drastically lowered, and they will take their big dollars elsewhere."

Arazi wrote to all his clients last month warning them that he'd terminate their asset/memo support program if they carried or promoted lab growns, with 30 days' notice.

"With the prices of lab-grown diamonds drastically comparable to CZs, Arazi does not wish to wait until jewelers are competing with gas stations to distance ourselves from such stores," he told them.

How did they respond? "The general reaction is that it's out of left field and they don't see why another product should affect them," says Arazi.

"Some are asking for some more time, and some will want to renegotiate with us, but we have pulled some merchandise back as a result."

Have a fabulous weekend.