Mixed Diamonds, Mixed Opinions

By Sayre Priddy, Diamonds.net
Posted: 6/29/2005 1:12 PM

The crux of the issue has been identified as the proper disclosure of which stones are lab-created and which are not. Gemesis President David Hellier says that his company — one of only a few producing lab-created stones — does its part. “Every Gemesis-created diamond is laser inscribed with the Gemesis name and a serial number and every diamond over 1 carat comes with a full grading report from the European Gemological Laboratory (EGL) USA,” he says. In terms of marketing, the company is just beginning to build a program, but it does currently provide simple, point-of-sale educational material to retailers.

Lab Reports Assume More Importance
For consumers, the document that holds the most authority in terms of disclosure is probably the grading report, once again putting the industry’s laboratories front and center. “Providing that the lab report that’s given is documenting everything 100 percent perfectly — the International Gemological Institute (IGI) believes that it should have either ‘lab created’ or ‘synthetic’ in bold — the consumer is receiving viable information and can make an educated decision,” says Jerry Ehrenwald of IGI. “As long as it’s all clear to the consumer and expressed in a manner that is in no way deceiving, it’s acceptable.”

Sharrie Woodring, a senior gemologist at EGL USA, the issuing lab for the Gemesis certs, understands the concern over confusion. “This type of jewelry has a legitimate place in the industry but proper disclosure is crucial to maintain consumer confidence. EGL USA has decided to issue reports on lab-created diamonds for this reason; our reports explain to the end consumer exactly what they are buying. In addition, we require laser inscription on all lab-created diamonds, which is another way EGL USA is helping to ensure proper disclosure.”

Laser inscription is good, but not good enough, says Ehrenwald. “Laser inscription is good but it can be removed. The potential for abuse still exists. As long as it’s possible to polish the inscription off, it is not foolproof.”

Precedent in Retail
Matching natural, mined stones with either lab-altered or lab-created stones in jewelry is not a new phenomenon, many sources point out. And, according to Gemesis research, says Hellier, “Consumers really liked the idea of putting our cultured diamonds and natural diamonds side by side. Its the same as putting a cultured pearl with diamonds in a piece of jewelry.”

Woodring agrees. “The combination of lab-created gemstones and natural gemstones in jewelry is not a new development. For instance, since lab-created rubies were first grown over a hundred years ago, they have been set in jewelry accented with natural diamonds and accepted by the consumer. To set lab-created diamonds together with natural diamonds is a continuation of the same.”

Daniel Gordon, president of Samuel Gordon Jewelers, is a bit more skeptical. “I guess it would be somewhat similar to putting lab-created rubies with natural rubies. But people hold diamonds in higher regard and to higher expectations than just rubies, emeralds and the like.”

This fact is precisely why this will work, believes Philip Press, chief designer, Renaissance Platinum, who also has a retail store on Sunset Boulevard in the heart of Hollywood. “In my opinion, there’s no way this can’t work. Say whatever you want; bottom line, the product is actually a diamond, unlike created sapphire and emeralds. These stones have a completely different market and a different consumer. They just have to be identified and targeted correctly.”

Consumers: Sharp or Slow?
The big question for jewelry designers and retailers is whether or not customers will get it. For Doris Panos, a designer who has used the stones in some of her mountings, consumer confusion is not a worry. “I don’t think so, because it’s all disclosed. The buyer gets an information packet with the stone, which explains that it’s not a synthetic, it’s just produced in a lab. If you are dealing with an educated consumer, there should be no problem there.”

Not so, says Press, who actually has contact with consumers at his store in Los Angeles and has been using Gemesis stones in his creations for about a year. “Clearly, the Gemesis stones are not for everybody. It’s appropriate for the buyers who are technically oriented. The typical consumer has a tough time grasping the concept of a man-made diamond. The stones are for the more sophisticated clients who are not enamored with the fact that stones must come out of the ground.”

Press, who nevertheless believes that lab-created diamonds are “without question, one of the most important developments in the diamond industry ever,” goes on to say that not only are the lab-created stones suitable only for a specific type of the buying public, they will only work for a certain segment of retailers. “It’s quite simple. I don’t believe that everyone will be able to sell such a product. You have to be someone with a very good reputation. Essentially, I am acting as the consumer’s adviser. When I offer the stones as a colored diamond option, they think, “‘Well, you are who you are. You have an impeccable reputation and you obviously will not lead me the wrong way.’ Not every jeweler enjoys the same level of confidence and trust from their clients.”

Even to some who do enjoy the same trust from customers, the risk is not worth it. “Why chance it?” asks Gordon. “At the high-end retail level, our consumer is so sensitive to that sort of thing, I don’t think that it would be wise to get into that and risk tainting your company’s image or reputation based on a miscommunication. Sometimes it’s hard to just explain to a client the basics — the 4C’s — so it might be overly ambitious to expect to be able to get past that to lab-created stones.”

Price Points, Availability are Biggest Advantages
Confusion notwithstanding, so far the most attractive features of these stones overall seems to be price points and their superiority — in most cases — in terms of availability and matchability when compared with mined fancy colored diamonds. “For a lower price point, it definitely is an interesting concept,” comments Panos.

Gemesis currently offers diamonds primarily in yellows and oranges — “Our sweet spot is the lemon yellow diamond. That’s where the consumer demand is,” says Chuck Meyer, vice president, Gemesis — but is launching pink and lavender cultured diamonds in July. These colors are expected to do very well. “Once they are perfected, pinks will boom,” predicts Press, who believes that the current drawback of Gemesis stones is the limited variety of colors available.

Cutter and designer Simon Atlas goes even further. “This really opens the market up to those who want to buy a fancy colored diamond but may not be able to afford the premium price of a natural diamond,” he says. “And it does the same for those who appreciate the uniqueness and beauty of the colored diamond; those who can afford a natural, but may also want the matching capability in intense and vivid colors that is such a strong benefit of the Gemesis diamonds.”

Gordon feels that consumers actually prefer the thrill of the chase. “Does easier mean better? It’s a quick, easy, drive-through type of mentality. Do you want to go for that hunt and search for the stone or do you want a made-to-order diamond? People want authenticity, and to them, that is a natural diamond. I don’t think that mentality will change overnight.”

What drew Glen Engelbrecht, designer, GJ Designs, to the stones, however, was not the available, egalitarian quality of the stones, but their color. “I love color and I love gemstones,” he says. “I think what intrigued me the most was the quality and the beauty of the Gemesis stones.”

The Future
Ultimately, lab-created stones will have a place in the market, believes Ehrenwald. “It is too new to recognize how big or small they could be. But, they are real, are here, are being manufactured and, most importantly, are available. They are and will be sold. But they need to be sold in a way that will protect the consuming public.”