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Digital Report - immediate delivery to your email.

Date of Publishing: February, 2022.
No. of Pages: 29.

Following rocky conditions in 2020, the diamond industry proved to be brilliant and resilient, and delivered a spectacular showing in 2021. Every sector of the diamond industry performed very well in 2021 and emerged from the Covid-19-induced crisis well-positioned for future growth. In 2020–21, the diamond industry invested heavily in technology to gain operational efficiency, create marketing and consumer experiences that attracted buyers, and accelerate e-commerce schemes. Even smaller mom-and-pop retailers added online sales platforms to reach consumers who couldn’t shop in person or travel due to government-instituted health measures.

And consumers were ready to spend. They were flush with cash from buoyant capital markets and economic stimulus programs, and eager to spend it on meaningful gifts for their loved ones (or rewards for themselves). Diamonds hit an emotional chord, which had been carefully cultivated by years of targeted marketing campaigns and storytelling. Diamond jewelry was also easier to access than other luxury and experience-based spending options.

Strong retail demand for diamond jewelry drove up prices and profit margins along the value chain. As rough diamond sales increased, miners increased production volumes and pulled from inventories to keep cutters and polishers busy. Healthy demand and price recovery for polished diamonds helped the midstream achieve decade-high margins.

In 2021, the industry had a renewed sense of value, which it answered through partnerships, consolidation, and technology. Now, every player along the value chain must add value—or remove hardship—on the path from mine to market.

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Contents:

1. Foreword.
2. Recent developments in the diamond industry.
3. Rough diamond production.
4. Cutting and polishing. 
5. Diamond jewelry retail. 
6. Midterm forecast.

Figure 1: Across the value chain, revenues recovered in 2021 and exceeded pre-pandemic levels.

Figure 2: Profit margins recovered in every segment. Combined, the mining and retail segments generated $7 billion more in profit compared to 2020.

Figure 3: Rough diamond sales rebounded more than 60% in 2021, surpassing pre-pandemic levels.

Figure 4: Rough and polished prices reached the historic average in 2021 but lagged behind industry peaks.

Figure 5: Prices for higher-quality polished diamonds continue to outperform lower-quality diamonds.

Figure 6: Production increased 5% in 2021 but is below pre-pandemic levels, limiting rough diamond supply.

Figure 7: Australia was the only major diamond-producing country with a production decline in 2021, driven by the permanent closure of its only mine.

Figure 8: Russia, Canada, and Botswana had the biggest production growth in 2021.

Figure 9: Upstream inventories declined ~40%, driven by high demand and slow production recovery, and are near the minimal technical level.

Figure 10: Major players almost fully recovered profitability in 2021.

Figure 11: As Covid-19 restrictions eased, cutting and polishing activities surged 84% globally; India grew fastest at 94%.

Figure 12: In India, net imports of rough diamonds increased 49% and net exports of polished diamonds rose 15% compared to 2019 pre-pandemic levels.

Figure 13: In 2021, consumer discretionary spending increased, boosting personal luxury and diamond jewelry sales.

Figure 14: The global diamond market was materially impacted by the pandemic and economic downturn in 2020 but recovered at double-digit rates in 2021.

Figure 15: Online searches of diamond jewelry were higher than pre-pandemic levels throughout the first nine months of the year.

Figure 16: Despite the downturn in 2020, key markets grew dramatically in 2021 and exceeded 2019 results.

Figure 18: In 2021, diamond jewelry outpaced most other jewelry segments, thanks to strong performances in Asia and the US.

Figure 19: In 2021, the share of e-commerce sales continued to grow in the US and China.

Figure 20: Large retailers experienced multiyear-high EBIT margins in H1 2021.

Figure 21: Several new drivers will influence the diamond market in the short- to midterm.

Figure 22: H1 2022 is expected to be strong; then two recovery scenarios are possible.

Figure 24: Players across the value chain should be prepared for short- and midterm market readjustments.

Figure 25: To sustain demand, diamond jewelry marketing must capture more Elements of Value.

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Digital Report - immediate delivery to your email.

Date of Publishing: 2023.
No. of Pages: 18.

Natural Fancy white and Fancy black diamonds are not routinely submitted to GIA for grading (fewer than 2,000 since 2008). These fancy-color diamonds are distinctive since the causes of color generally are not atomic-scale defects, but nanometer- to micrometer-sized inclusions that reduce the diamond’s transparency by scattering or absorbing light (some exceptions exist among Fancy black diamonds). To clarify, Fancy white diamonds are those rare stones colored by inclusions that give a “whitish” appearance, and are distinct from “colorless” diamonds on the D-to-Z scale. These two colors, often thought of as opposites in the color world, are grouped here as outliers within the colored diamond world. Both can be colored by inclusions so numerous the stone would fall below the I3 grade on the clarity scale, demonstrating that inclusions, often perceived as a negative quality factor, can create a distinctive appearance. Among the Fancy white diamonds examined for this study, the vast majority (82%) were type IaB, making them a rare subset of a rare diamond type. Based on prior geological research, these are surmised to be mostly sublithospheric in origin (i.e., forming more than 250 km below the earth’s surface). The Fancy white diamonds generally have a different chemistry from D-to-Z type IaB diamonds, with greater quantities of several hydrogen- and nickel-related defects. Among Fancy black diamonds, the major causes of color are either micrometer-sized dark crystal inclusions, nanometer-sized inclusions clustered into clouds, or a combination of the two. For these two colors of diamond, we summarize their gemological properties along with the absorption and luminescence spectra of a representative subset of diamonds from each color, examining how they deviate from the standard grading methodology. Because of their rarity, there has been very little systematic study of either of these color categories, and never a sample set of this quantity, which includes data for ~500 Fancy white and ~1,200 Fancy black diamonds.

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Contents:

1. Causes of Color.

2. Spectroscopy.

3. Gemological Observations.

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Digital Report - immediate delivery to your email.

Date of Publishing: 2023.
No. of Pages: 127.

Fashion companies will need to rethink their operations. Many will update their organizational structures, introducing new roles or elevating existing ones to target key growth opportunities and respond more effectively to risk. Brands may also choose to see the next year as a time to team up with manufacturing partners to sharpen their supply chain strategies. This may involve nearshoring to better respond to fast-shifting consumer demand or leaning more heavily on data analytics and technology to manage inventory efficiently.

Distribution channel mixes are also ripe for reassessment. As e-commerce growth normalises after its pandemic boom, the sheen has started to wear off the direct-to-consumer digital model that propelled many brands over the past decade. As lockdown restrictions lifted, shoppers have made it clear that although they still value online channels — particularly within luxury, where online DTC and third-party platforms will continue to drive growth — shoppers also want brick-and-mortar experiences. Brands will also need to factor in the continued return of international travel to pre-pandemic rates, which will be buoyed by a strong US dollar. Wholesale and physical retail have a new role in revamping customer journeys, requiring brands to look beyond tier-one cities to be physically closer to consumers.

Brands will have to work hard to remain attractive to consumers, given the tough economic environment. Consumer behaviours in 2023 will depend greatly on household incomes. While higher-income households will be less affected by economic pressures and look likely to continue shopping for luxury goods, as in previous downturns, lower-income households will likely cut back or even eliminate discretionary spending, including apparel.

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Contents:

1. EXECUTIVE SUMMARY.

2. INDUSTRY OUTLOOK.

3. GLOBAL ECONOMY.

3.1. Global Fragility Managing Inflation for Growth.

3.2. Regional Realities Chalhoub Group: Capturing Fashion’s Growth Potential in the Middle East.

4. CONSUMER SHIFTS. 

4.1. Two-Track Spending Tapestry: Connecting With Customers ‘Is Not Just About Price’.

4.2. Fluid Fashion How Gen-Z is Propelling Gender-Fluid Fashion.

4.3. Formalwear Reinvented Hugo Boss: Reclaiming the Formalwear Space.

5. FASHION SYSTEM.

5.1. DTC Reckoning Allbirds: Conquering the New Multi-Channel Landscape.

5.2. Tackling Greenwashing A New Approach to Scaling Innovative Materials Puma: Moving Sustainability Beyond Marketing.

5.3. Future-Proofing Manufacturing MAS Holdings: Deconstructing Supply Chain Risks, and Rewards.

5.4. Digital Marketing Reloaded How Web3 Is Shaking Up Digital Marketing.

5.5. Organization Overhaul.

6. MCKINSEY GLOBAL FASHION INDEX.

7. THE STATE OF LUXURY 2023.

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