Rapaport Magazine

Lab and Marriage: The Rise of Synthetics in Bridal

By Jennifer Heebner

Engagement-ring shoppers are increasingly courting grown diamonds so they can get more carats for their money. 

Like many merchants, Andrews Jewelers in Buffalo, New York, has been seeing an uptick in sales of lab-grown diamond engagement rings. In fact, this segment makes up some 65% of the store’s total engagement ring sales — much to owner Andy Moquin’s chagrin. “I don’t like selling them, but I can’t ignore what consumers want,” he says.

Other retailers find themselves in a similar situation. Gabe Arik, co-owner of Happy Jewelers in Fullerton, California, fields requests for lab-created diamonds in engagement rings daily. He, too, estimates that synthetic-diamond rings account for 65% of his bridal inventory sales. In Philadelphia, about half of the diamond engagement rings that jeweler Sydney Rosen sells feature synthetics, according to owner and president David Rosen.

And although lab-grown currently makes up just 2% of engagement ring sales for Wallach Jewelry in Larchmont, New York, owner Steven Wallach expects that number to increase. “As long as shoppers understand the differences, they know they can get more bang for their buck with lab-growns,” he says.

Gaining speed

Interest in synthetics has proliferated over the last several years, both within the industry and among consumers. The International Grown Diamond Association has more than doubled its membership, and the Lab-Grown Diamond Neighborhood at the JCK Las Vegas show has expanded nearly 300% since 2019. Meanwhile, in a survey this past spring, 72% of consumers said they’d heard of synthetic diamonds, versus just 10% a decade earlier, according to research firm The MVEye.

Two significant industry events have contributed to the segment’s rise. In 2018, De Beers debuted its Lightbox brand of lab-grown jewelry. Then, in 2019, the Gemological Institute of America (GIA) announced it would no longer use the term “synthetic” in its diamond reports, opting instead to list the growth process — chemical vapor deposition (CVD) or High Pressure-High Temperature (HPHT) — and any evidence of post-growth treatments alongside the standard cut, color, and clarity grades. Both moves paved the way for today’s robust synthetic landscape of climbing retail sales and burgeoning product supply.

Bigger, better and cheaper

The prime reason shoppers buy lab-grown diamonds is that they can get a bigger, better-quality diamond at a lower price than a mined one, retailers report. Although sustainability was an early reason for such purchases, it’s less of a factor now.

“You can spend the same amount and get a 1- to 1.50-carat in mined, or a 2- to 3-carat in lab-grown,” explains Urvashi Nighojkar, founder and CEO of Gemnomads in Austin, Texas. The gem and jewelry supplier added lab-grown diamonds to its inventory two years ago to meet demand. In the bridal category, Nighojkar now sells more lab than mined center stones.

In addition, most synthetic diamonds grow only in high color and clarity grades. The average lab-grown that Nighojkar sells has F to G color and VS1 clarity. “This is a much higher quality than people buy in mined diamonds,” she observes.

Price-wise, interviewees say the cost of lab-created goods is anywhere from 20% to 85% lower than that of natural diamonds in comparable sizes, colors and clarities. A case in point is on the website of Greensburg, Pennsylvania-based jeweler Beeghly & Co., which features a vast inventory of both man-made and mined diamonds. Shoppers searching for a round, 1-carat, H, VVS2 stone have two options: a synthetic one for $1,183, and a mined one for $4,605 — a 74% price difference.

Company president Brian Beeghly started selling lab-grown in May 2021 due to client requests. At that time, there weren’t nearly as many manufacturers, so the price gaps weren’t as dramatic. Since then, his diamond engagement ring sales have shifted from 95% mined and 5% lab-grown to 70% lab and 30% mined.

“There are so many new players in the market making lab-growns that the cost of the product is decreasing,” he elaborates.

Race to the bottom

Synthetics may be a great value at the time of purchase, but since the market is so new and prices are still fluctuating, resale value will be a problem down the road.

“If you keep it forever, it’s worth it,” states Nighojkar; if not, trade-in values will be nonexistent. No retailer can guarantee an upgrade value on a product with values that are still in flux.

Moquin is intimately familiar with this problem. He was an early adopter of lab-grown stones, having bought 15 loose ones seven years ago. They sat unsold for years.

“I was too soon in the market,” he says. “I eventually sold all those initial stones, but at a $20,000 loss.”

Wallach compares lab-created diamonds to flat-screen TVs. “You’re buying the technology,” he says. “You can get a bigger, better TV today for less [than you could] five years ago.”

Even though synthetics offer bigger margins than natural stones, adds Moquin, “the basement continues to drop on prices of lab-growns.”

Suppliers branch out

Retailers have a lot of sources for acquiring synthetic diamonds and finished jewelry. Smiling Rocks is one such supplier. The company opened its doors in 2018 and debuted at JCK Las Vegas in 2019. In that time, it has opened more than 600 wholesale accounts.

“In our fine-jewelry segment, 70% to 80% of our business is in engagement rings,” says cofounder Zulu Ghevriya.

There’s also a growing number of natural-diamond sellers that are getting into lab-grown. The nearly 40-year-old Ashi Diamonds started offering synthetic bridal mountings and finished jewelry this year, unveiling them at the JCK Luxury show in June.

“There were some supply chain issues with melee a year ago, but now it’s become more consistent,” says Vivek Pandya, who heads up the firm’s lab-grown division. At the fair, Pandya set up consignment programs for synthetic-diamond jewelry with 10 of Ashi’s good customers. “We can’t say these will be guaranteed sales, but we’ll see what the sell-through is like.”

Even Christopher Slowinski of Christopher Designs, renowned for his proprietary Crisscut and L’Amour Crisscut faceting styles, stepped into the synthetic sales ring at Luxury this year. He unveiled the Neon Crisscut collection, a jewelry line featuring lab-grown diamonds in his two patented cuts, including engagement rings.

“I invested $1 million in goods,” he recounts. “By the end of the show, I only had $160,000 of inventory remaining. I didn’t expect the sell-through to be so high in bridal.”

As with many others, demand is what drove the longtime purveyor of natural diamonds into the lab-grown space. But considering the recent supply issues that have made mined diamonds harder to obtain, not to mention more expensive — “They’re up 20% in the past year,” he reports — lab-created goods are that much more attractive.

“The beauty of lab-growns is that someone can order 100 pairs of earrings with [stones of] specific cut, color and clarity, and I can produce it,” he says. “I can’t do that with naturals.”

Not changing their mined

Of course, not everyone has embraced lab-grown. Benjamin Javaheri of fine-jewelry brand Uneek shuns synthetics over their worth. “Heirloom jewelry should hold its value as well as its memories,” asserts the designer, who produces pieces with retail prices ranging from $799 to $1 million.

Markham Fine Jewelers in Frisco, Texas, sells fewer synthetic-diamond pieces than most of the other stores that Rapaport Magazine polled. Requests for lab-grown make up only 20% of its monthly bridal-ring orders, according to chief operating officer Raja Muzaffar. The store — a member of the American Gem Society (AGS) — educates clients on the good that mined diamonds do for remote communities, such as providing jobs and schools, and reinvesting industry funds back into those communities.

One nagging concern he cites about synthetics is disclosure. “We’ve seen consumers who purchased lab-growns and were not told [they weren’t natural],” he reveals.

Still, the evidence shows that man-made diamonds are here to stay. Not even 15 years ago, Beeghly recalls, buying gold from customers was considered a controversial practice for fine jewelers. He was concerned that clients would liken his business to a pawn shop if he started doing it. But he eventually conceded, establishing what has since become a successful estate jewelry department.

“I’m applying that thinking to lab-growns,” he says. “I’m keeping an open mind.”

Image: Smiling Rocks

Article from the Rapaport Magazine - September 2022. To subscribe click here.

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