LVMH Declares: Lab-Created Diamonds Attain Luxury Status

In 2018, the Federal Trade Commission (FTC) granted permission for the term “diamond” to be applied to “a mineral consisting essentially of pure carbon crystallised in the isometric system,” whether it occurs naturally or is man-made. Since then, the jewellery industry has actively set up obstacles to impede the entry of lab-grown diamonds into their lucrative $84 billion global market.

The Natural Diamond Council has staunchly advocated the official stance that “Crafted by nature over millions of years, natural diamonds are inherently valuable, rare, and precious.” Conversely, lab-grown diamonds are considered inexpensive manufactured alternatives with their value “tied strictly to the cost of production,” lacking enduring value.

Luxury brands such as Bulgari, Cartier, and Tiffany (now part of LVMH) have vigorously supported this stance, asserting that only natural diamonds epitomise luxury. However, recent developments challenge this narrative as LVMH Luxury Ventures, alongside other investors, has successfully concluded a $90 million investment round in Lusix, an Israel-based pioneer in the lab-grown diamond (LGD) industry.

Lusix, recognised as the first 100% solar-powered diamond producer in the LGD industry, sells its stones under the “Sun Grown Diamond” brand. With the capability to cultivate both clear and custom-coloured rough stones in large-scale reactors, Lusix is a leading producer of premium-quality diamonds. This strategic investment by LVMH signals a significant shift, indicating that lab-grown diamonds are entering the luxury market on a large scale. Marty Hurwitz, founder of The MVEye, a jewellery market research firm, emphasises that the demand for lab-grown diamonds is soaring, and LVMH’s investment in Lusix ensures secure access to premium-quality supply. Lusix’s technological advantage, coupled with its commitment to sustainability, made it an attractive choice for LVMH. Benny Landa, Lusix’s founder, previously made strides in digital printing technology through his Indigo Printing Company.

The $90 million investment will be utilised to launch a second 100% solar-powered facility this summer. Landa expresses enthusiasm for the support from high-profile investors, especially LVMH Luxury Ventures, emphasizing the profound implications of this investment for Lusix and the lab-grown diamond segment.

This development marks a turning point for the lab-grown diamond industry, currently valued at just under $6 billion and anticipated to double in size by 2025. With LVMH endorsing lab-grown diamonds officially, the market is likely to grow even faster.

Frédéric Arnault, head of LVMH’s Tag Heuer brand, played a pivotal role in steering the company’s attention toward lab-grown diamonds. Tag Heuer recently introduced its first watch featuring lab-grown diamonds, priced at $360,000. Arnault asserts that it’s not about replacing traditional diamonds but utilising the unique attributes of lab-grown diamonds to offer consumers new shapes and textures. Recognising the preferences of the next-generation luxury consumers, he highlights the choice between natural diamonds with environmental challenges and lab-grown diamonds that are renewable and produced without a high environmental price tag. Moreover, consumers can obtain larger and often superior quality stones at a more affordable price, appealing to a broad audience.

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