The Valentine's Day Opportunity

Feb 115 min read

Oh boy, Valentine’s Day, and my fragile childhood memories resurface... Working in the diamond industry, and the role that I have taken on, I’m somewhat forced to recognize this holiday. I’d otherwise conveniently let it pass by or drown my lonely little liver in a bottle of cheap wine and a non-romcom Netflix binge.

But here we are, and I must ask: Is Valentine’s Day a feature for jewelers? Or more particularly does it give sellers of natural diamonds a boost? I’ve never been convinced it does. My impression was always that those who did mark the holiday tended toward cheaper jewelry.

Then, the National Retail Federation’s (NRF) published its annual Valentine’s Day survey, saying it expects US consumers to spend a total of $6.5 billion on jewelry for the day – by far the leading category by total spend. Some 22% of those questioned said they intend to buy jewelry, behind candy with 56%, flowers (40%), greeting cards (40%), and an evening out (35%).

Furthermore, the Natural Diamond Council’s (NDC) Diamond Trends report released last week showed the average retail price of natural diamond jewelry for Valentine’s Day in 2024 grew 2.7% year on year to $2,066. That’s a notch above the cheap, tacky beaded bracelet I sent my 12-year-old crush along with an anonymous roses are red card that I never owned up to.

So, I’m reconsidering my attitude. The diamond industry is cyclical, and Valentine’s Day does present an opportunity for jewelers to engage with their customers… and for nerdy diamond dudes to salvage their long-lost mojo. So, watch-out world, I may yet whip out my best rhymes, while hunting for the most appropriate candy, flowers, greeting card, evening out, umm, jewelry, to spend on my something-something-year-old love.

And if the NRF is correct, we may see strong sales again in February, building on the upward momentum independent jewelers enjoyed during the holiday season, and at the beginning of 2025. See the reports about positive January sales by The Edge Retail Academy and Tenoris.

Speaking of the NDC report, I’m so grateful to have had the opportunity to work with the NDC and Tenoris on this project. I learned so much along the way, and the final product contains so much valuable data and insight. I’m super proud of this work and highly recommend keeping it on hand for a quick reference and for educational purposes.

Download the report here: Natural Diamond Trends: A 2024 Overview.

And now, here are a few more Pressing Matters from the news pages this week:

>>> There was a lot to digest in the Anglo American / De Beers annual production report published on Thursday.

I deal with the what, why and how in my latest video analysis: De Beers Losing Value.

There, I touch on Anglo’s valuation of De Beers, its intention to divest from the diamond company, I give some startling context to De Beers sales in 2024, assess its inventory levels, production plan, and I suggest what it all means for the diamond industry.

Here, I want to explore one or two things I didn’t address in the reel.

The first is that De Beers is giving more information than it used to in these quarterly and annual production updates. Most notably, it presents sales by value. It used to publish sales on a sight-by-sight basis but discontinued that and began disclosing rough sales by quarter mid-last year. The truth is, this is much more valuable information and gives a better context to the market.

Among the most telling pieces of data in the report was the De Beers rough price index, which is measured relative to the base of 100 recorded in December 2006. The index fell 20% in 2024 and once again stood at 100 in the fourth quarter. That means that De Beers’ average price index, tracking the value of the company’s rough on a like-for-like basis, is back to its starting point. There’s effectively been no growth in 18 years.

That should sound alarm bells for the industry, along with many other metrics that I speak about the reel. Let me know if you agree with the conclusion I reach for the industry.

>>> From April, the US will require importers to disclose the mining source of diamonds they bring into the country. See Rapaport’s excellent coverage of this story here and here, along with Joshua Freedman’s commentary: ‘Unclear’ US Diamond Rules Signal Move to Traceability.

The rules don’t seem to stipulate traceability, but one would expect that to eventually be included in the methods of proof. It still appears that the EU is moving in that direction with its verification nodes.

The industry is at a bit of a crossroads in its traceability journey. There are two things pushing the adoption of these blockchain-based tracking programs. The first are the brands and retailers which require source verification for their risk management and storytelling. And the second are those regulatory stipulations.

The more prominent driver is the regulators. However, the healthier means of adoption would come from within the trade – i.e., the push from retailers. Diamond and jewelry companies need to consider how to take on traceability before its forced upon them – and that moment of regulatory coercion is fast approaching.

>>> Pandora reported revenue from lab-grown diamonds jumped 43% on a like-for-like basis to DKK 315 million ($44 million) in 2024. However, the company said the rollout of its lab-grown product line hasn’t lived up to expectations, as reported by JCK Online. While Pandora previously said it expects to generate DKK 1 billion ($140 million) from the category by 2026, that now seems unlikely.

What does that tell us about lab-grown?

Well, not much. It probably tells us more about unrealistic expectations the company set itself. Pandora is still posting admirable growth with the product, that is stronger than the industry average.

That’s testament to the company’s great marketing (see It’s Never Enough), but more importantly because it is exactly positioned in the space where many (including I) believe the lab-grown market will gravitate – to low-priced, fashion jewelry.

I maintain my prediction that Pandora will be a leading brand for lab-grown diamonds, if it isn’t already.

From the blog