The Diamond Disconnect

The contrast between the performance of the retail jewelry sector and diamond mining revealed in the recent round of earnings is striking.

At retail, Watches of Switzerland said its Roberto Coin business delivered an excellent US holiday season. Swatch Group noted that Harry Winston had a record month in December, while Birks Group reported comparable-store sales grew 2.5% over the November–December period.

The momentum carried into January. The Edge Retail Academy estimated jewelry sales among independent jewelers rose 16%, while Tenoris reported a 9% increase.

Among the miners, however, the picture is very different. Gem Diamonds said sales fell 15% in the fourth quarter and 36% for the year, while Burgundy Diamond Mines saw sales volumes decline 16%.

De Beers was the exception, with sales rising an estimated 5% in the fourth quarter and 10% for the full year, compared to the extreme lows of the second half of 2024. Even so, Anglo American said it is considering another write-down of De Beers’ valuation, citing persistent weakness in the diamond market.

So why are positive retail trends not filtering through to the mining segment, or the rest of the pipeline for that matter?

Two factors stand out: market segmentation and product mix.

The retailers cited above tend to sit at the higher end of the spectrum, including the top-tier independents tracked by The Edge and Tenoris. Meanwhile, a large swath of jewelers in the middle and lower tiers continues to be squeezed. Those emphasizing value, backed by strong branding, are the ones performing best.

Both The Edge and Tenoris also pointed to higher transaction values offsetting lower unit volumes. That signals a shift in product mix, resulting in retailers stocking fewer, more selective ranges of natural diamonds than before.

Diamonds continue to support higher average transaction values alongside gold and silver products and watches. In addition, at this stage, lab-grown diamonds are positioned not as a cheaper substitute for natural, but as a way for consumers to buy a larger diamond at the same price. In that sense, they are not materially depressing transaction values, even as they continue to take market share.

At the same time, consumer budgets are tighter amid ongoing economic uncertainty, and shoppers are purchasing fewer jewelry pieces as rising gold and silver prices push up costs. Consumer confidence fell to an 11-year low in January, according to the Conference Board.

Miners, meanwhile, cannot pick and choose what they extract. Their rough inventory is building in categories that are proving harder to sell, or where rough prices are under sustained pressure.

The bottom line is that while retail jewelers are still posting solid results, that growth increasingly reflects the sale of fewer natural diamonds. And that shift is quietly reshaping the industry’s traditional supply dynamics.