Ramble On Ron

Diamonds, Music and other Facets of Life

The Diamond World is Changing

Posted on | October 27, 2009 | 3 Comments

I knew it! The brands are breaking down. I just ran across this article from The Wall Street Journal about Tiffany and Co and other big retailers cutting and polishing their own diamonds in Botswana. Graff has owned Safdico Diamonds for a while, but he doesn’t sell to the masses like Tiffany. What jumped out at me was the fact that Tiffany was lowering their diamond prices for the first time in recent memory:

Tiffany is also feeling the pressure. Its inventory has swelled to $1.54 billion this year, up from $1 billion in early 2005. For the first time in recent memory, Tiffany says, it has lowered its prices for diamonds. The engagement rings it sells in the U.S. are priced 10% lower than last year. In all, the company expects a “high teens” decline in sales this year at U.S. stores open at least a year.

Tiffany acknowledges its lack of mining expertise. Although it reaped a large financial gain from its 2004 sale of a minority stake in the 40%-owner of a Canadian mine, it recently disclosed that it wrote off a $12.4 million investment in a small mining project in Sierra Leone. It also has written off loans of about $44 million to a former supplier whose mine has ceased operations. “I think we want to let the miners do the mining,” said Chief Financial Officer James Fernandez.

Here’s an interesting video on diamond mining:

It’s a conflict to their brand but let me let you in on a little secret…I found the biggest diamond mine in the world and it’s people just like you who want to sell their diamonds!!