Missing Diamonds, Inventory Woes, and Glimmers of Hope
- Avi Krawitz
- Apr 29
- 4 min read
This week’s headline story is, ironically, about what won’t happen: Christie’s has pulled the Golconda Blue diamond from its Geneva auction after the owners “decided to pursue a sale of the diamond to a family member” instead.
That leaves the rest of us wondering what commission, if any, the auction house collects after all the work researching and promoting the stone. It suggests that some members of the family didn’t realize what a treasure they had — until Christie’s put a spotlight on it.
The juicier question, of course, is what price gets agreed behind closed doors. The diamond was estimated at $35 million to $50 million, but some speculated it could have fetched as much as $100 million. We’ll probably never know, but I’d love to be a fly on the wall for that little family function.
Hot Off The Diamond Press
On the topic of spectacular diamonds, I have to say I found the Netflix miniseries The Diamond Heist about the attempted theft of the Millennium Star a bit underwhelming. Still, here’s my take: The Real Star of The Diamond Heist
In this week’s video, I dig into what the Trump tariffs could mean for the diamond and jewelry trade — and why the bigger story might be the industry’s distraction with tariffs themselves: The Great Big Tariff Distraction
This Week in Diamonds (News Roundup)
Pressing Matters
>>> Anglo American’s first-quarter update highlighted continued challenges at De Beers and reiterated its intention to divest from the diamond business. The prospective divestment has moved to the shadows of industry news, but Anglo reminded us it is exploring a “dual track process” — either a sale or a potential public listing of De Beers — “when market conditions allow.”
De Beers continues to struggle to prove its value as diamond market headwinds persist. Its rough diamond sales tumbled 44% year on year to $520 million in the quarter. Sales volume dipped 3% to 4.7 million carats, while the average price achieved plunged 38% to $124 per carat.
De Beers attributed the sharp drop in average price to three factors:
A shift in the sales mix (toward lower-value goods),
Stock rebalancing — to me that suggests selling at discounted prices,
And a broader market decline, with De Beers’ average price index down 15% year on year and 6% just in the quarter.
Perhaps most concerning for De Beers (and Anglo) is its ballooning unsold inventory — production has outpaced sales by roughly 12 million carats since the beginning of 2022.
One possible solution: De Beers has revived its polished diamond unit, partnering with sightholders on special stones and curated collections. In today’s market, selling polished might prove easier than rough and could help ease De Beers’ inventory burden. Still, this overhang is a significant challenge for De Beers’ value proposition.
For more on De Beers’ first quarter results, check out my LinkedIn post — there’s still plenty more to unpack...
>>> The luxury segment continues to face headwinds, particularly from its exposure to China, where rapid expansion in the years before Covid has now become a liability.
That said, Kering Group reported broad-based weakness across all regions: Asia Pacific (-25%), Western Europe (-13%), North America (-13%), and Japan (-11%). First-quarter revenue dropped 14% year on year to EUR 3.9 billion ($4.42 billion).
Much of Kering’s downturn was weighed by Gucci, which makes up about 60% of the group’s operating profit. Gucci’s sales plunged 24% to EUR 1.6 billion ($1.8 billion), setting the fashion brand up for a third consecutive year of declines.
Jewelry provided a rare bright spot for Kering, even though it falls within “other houses,” where overall revenue slipped 11% to EUR 733 million ($834 million). Boucheron posted solid growth in the US, Pomellato had a strong quarter, and Qeelin sales also rose.
Meanwhile, watches and jewelry was also a standout performer for LVMH, as we discussed in last week’s Pressing Matters memo. All eyes now turn to Richemont’s annual report on May 16. Historically, Richemont’s jewelry maisons have outperformed both LVMH and Kering, arguably because it caters to an even higher tier of clientele. Perhaps in this market, the higher up you go, the stronger your position.
Chart Check
Chow Tai Fook gave a glimmer of hope to those of us skeptical about China’s jewelry market (myself included). While its update for the fiscal fourth-quarter ending March 31 showed negative numbers as expected, the group reported a 2.4% rise in same-store sales of gem-set, platinum, and K-gold jewelry in mainland China and a slight 2.2% decline in Hong Kong-Macau. The lift in China was driven by strong demand for diamond and gemstone-inlaid gold pieces. That said, it’s important to keep the improvement in perspective — it’s coming off a very low base after four straight quarters of declines. Still, it’s a small but welcome sign that some life remains in the Chinese market, even as broader weakness persists.
What I’m Listening To
Podcast: The Diary of A CEO with Steven Barlett. So many insights from this interview with former FBI agent Jore Navaro, emphasizing the powerful secrets of non-verbal communications.
Coming Up
Conference Board April Consumer Confidence Index: April 29
Gem Diamonds 1Q Trading Update: April 30
US GDP and Personal Income Data: April 30
Petra Diamonds trading update
I’m excited to explore the tension between value and volume selling alongside Elle Hill, founder and CEO of Hill & Co., and Stanley Zale, principal consultant at Hill & Co. at AGS Confluence this week. Register for the online session here: Confluence 2025.
Pic of the Week: Pears of Pink
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