De Beers launches secondhand diamond program in US
August 20, 2014
New York--For the next six months, De Beers will evaluate and buy secondhand diamonds from a select group of retailers in the United States, giving it a foothold in the sizable market for “recycled” diamonds and the chance to evaluate the diamond reselling experience from the consumers’ perspective.
In what it is terming an “insight program” De Beers has opened the International Institute of Diamond Valuation, or IIDV, in New York’s Diamond District.
The office, headed locally by Mitchell Marder, formerly of S. Bichachi Blumenfeld Diamond Company, will work with an already selected, but not yet named, group of four retailers representing a total of 15 doors. All four of these retailers already are known to De Beers, as they carry its Forevermark diamond brand.
When consumers bring diamonds into these stores to sell, the retailers have one of two options under the IIDV program.
According to the IIDV website, they can evaluate the stone in-store and tap the IIDV lab for a “market price quote” or send the diamond to the IIDV facility in New York.
At the facility, De Beers will remove it from its mounting, if necessary, and put it through an evaluation process that includes screening to ensure it is not a lab-grown diamond.
De Beers then will return the stone to the retailer with the market price quote, what the diamond is worth on the re-sale market based on De Beers’ database of more than 100,000 diamond prices.
The jeweler will offer that amount to the consumer and, if they accept, the diamond either becomes property of De Beers, which reimburses the jeweler the sale price plus a small markup, or is retained by the retailer.
According to the IIDV website, De Beers expects to buy “many” of the diamonds it evaluates. The company said it likely will re-sell the stones its buys on the wholesale market.
There is no fee to be part of the program for retailers.
De Beers re-selling program is set to launch next month and will continue through the beginning of 2015. The company said it doesn’t have plans at this time to expand it beyond the four retailers already involved.
The diamond miner and marketer said it is launching the program because its research indicates that the consumer experience when it comes to reselling diamonds is “weak.”
De Beers Group CEO Philippe Mellier mentioned as much in his presentation at the JCK Las Vegas show this past June and, in a release issued Tuesday announcing the program, De Beers’ executive Tom Montgomery, who will be the official CEO of IIDV but won’t be based in New York, said “Some retailers have expressed reservations … about how the current reselling experience could impact consumers’ views on diamond equity in the long term. We believe that the only way to gain a true understanding of diamond reselling activity by consumers is to run this small-scale program to assess how reselling has developed, how it might evolve and how it impacts consumer perception of diamonds.”