In the diamond industry, even the crooks are old-fashioned.
The ringleaders jailed for a $20 million jewelry heist in London last year were in their 60s and 70s, so it's no surprise they would go after the gems: They are old enough to remember when advertisers said diamonds were forever and Marilyn Monroe sang that they were a girl's best friend.
Not anymore. Diamonds are losing their allure for many consumers more interested in spending money on vacations, fancy handbags and high-tech gadgets. Mine owners like De Beers — who helped dream up those successful marketing campaigns in years past — have been unable to prevent prices from dropping below where they were a decade ago, a sign the industry is failing to maintain the cachet of its brand.
Over the same period, the price of luxury items like cars, shoes and fine foods have risen at above-inflation rates, according to a Forbes index. Demand for luxury jewelry rose just 1.9 percent a year from 2004 to 2013, trailing high-end beauty products, tobacco and watches, according to De Beers's 2014 Insight Report on industry trends.
Efforts by producers including De Beers and Alrosa PJSC to push prices higher in the past five years unraveled in 2015.
"Consumer demand cannot be taken for granted, even in mature markets and especially with millennials," said Anish Aggarwal, a partner at industry consultant Gemdax in Antwerp.
"The industry is a victim of its own history," said Charles Wyndham, a former sales director at De Beers and founder of WWW International Diamond Consultants Ltd. "Everyone had a pretty easy ride when De Beers had its monopoly. Everybody has got to think how they can turn it around. It requires a huge cultural change."
