LVMH makes it official: lab-grown diamonds are luxury

Since then, the jewelry community has been erecting barriers to lab-grown diamonds entering its lucrative $84 billion global market.

The Diamond Council set the official party line by declaring: "Diamonds, created by nature over millions of years, are inherently valuable, rare and priceless." “Lab-grown diamonds, in contrast, are cheap artificial substitutes whose value is strictly tied to the cost of production and therefore has no long-term value.”

The biggest losers were luxury brands, including Bulgari, Cartier and Tiffany (now a brand of LVMH), which adhered to this view and considered only natural diamonds luxury.

But now the walls are broken! LVMH Luxury Ventures, along with other investors, has completed a $90 million investment round in Israeli company Lusix, a leading company in the lab-grown diamond (LGD) industry.

Lusix joins MadHappy, Gabriella Hearst, Versed and Stadium Goods in the LVMH Luxury Venture portfolio. Her investment priorities are clear: look for brands that ride the wave of innovation and new trends in the luxury market.

Specifically, the company invests in “Iconic luxury brands, recognized for their distinctiveness and the quality of their products and services, with significant growth potential.”

Lusix fits the bill. It is the LGD industrys first 100% solar powered diamond manufacturer, and its stones are sold under the Sun Grown Diamond brand. The company can grow both clear and rough fancy colored stones in its large scale reactors and is one of the industrys leading producers of premium quality diamonds.

This is exciting news for the entire lab-grown diamond industry, which is currently worth just under $6 billion and, prior to this announcement, was projected to double by 2025.

Now that LVMH is officially allowing lab-grown luxury diamonds, its a safe bet that they will grow even faster.

“Lusix aims to double production by 2023, which will accelerate market development even faster,” shared Hurwitz.

Frédéric Arnault, the 27-year-old son of LVMH CEO Bernard Arnault and head of the Tag Heuer brand, likely played an important role in bringing his father closer to LGDs. This year, Tag Heuer introduced its first watch with lab-grown diamonds, with a super-luxury price tag of $360,000.

“This is not about replacing traditional diamonds with lab-grown ones,” he shared with Vogue Business. “We e using something thats different from whats inherent in this technology, allowing us to create new shapes and textures.”

Frederic understands what the new generation of luxury consumers want, and they are given the choice between natural diamonds with existing environmental and ethical concerns, and lab-grown diamonds, which are renewable and can be produced without the high environmental cost.

In addition, consumers can purchase larger, and often better quality, stones at a lower price. This is the choice that everyone dreams of!

Forbes magazine publication
Lead Writer Pamela N. Danziger
/Speaker, author and market researcher Pamela N. Danziger is internationally recognized for her expertise with the worlds most powerful consumers: wealthy Americans./