De Beers sits on $2 billion diamond pile as demand collapses: ‘It has been a nasty yr’

• Diamond large De Beers noticed its inventory attain $2 billionthe biggest because the 2008 monetary disaster, in accordance with the Monetary Occasions. “It’s been a nasty yr for tough diamond gross sales.”

Falling demand for pure diamonds helped push De Beers’ inventories to $2 billion, the best because the 2008 monetary crash, in accordance with the Financial Times.

In actual fact, the diamond large’s stock worth has remained caught round $2 billion for a lot of 2024, in accordance with the report.

“It has been a nasty yr for tough diamond gross sales,” CEO Al Cook dinner advised the FT.

De Beers didn’t instantly reply to a request for added particulars about its shares, together with their amount in earlier years.

The corporate has confronted many headwinds in recent times. China’s declining financial system has been a significant drag on the posh sector, together with diamonds. Technology Z’s desire for cheaper artificial diamonds has affected the demand for pure stones. And the impacts of COVID-19 are nonetheless being felt as weddings solely returned to pre-pandemic ranges earlier this yr.

For the primary half of 2024, De Beers’ gross sales declined by round 20% in comparison with the identical interval final yr, to $2.2 billion.

In the meantime, the father or mother firm Anglo-American introduced plans earlier this yr to spin off the corporate by a sale or IPO.

The rise in shares comes as De Beers doubled its retail segmentdeserted his own foray into synthetic diamondsdiminished manufacturing at diamond mines, launched a advertising marketing campaign this fall and slashed prices.

CEO Cook dinner is optimistic a few turnaround.

“As we grow to be unbiased, now we have the liberty to concentrate on advertising as arduous as we targeted on mining,” he advised the newspaper. FT. “It looks as if the best time to drive advertising and assist our manufacturers and retail, whilst we cut back capital and bills on the mining facet.”

However one recent report Since McKinsey gave a extra gloomy evaluation and raised the likelihood that artificial diamonds might take over, relegating the remainder of the market to area of interest segments.

Alternatively, the costs of artificial diamonds might fall a lot that they grow to be vogue equipment and not compete with their pure rivals.

“On this level, assuming customers can not inform the distinction between pure stones and LGDs, all diamonds might merely exit of fashion, lose their enchantment and not be thought of vital for engagement rings” , warns the report.

This story was initially featured on Fortune.com