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Meet the new boss. Same as the old boss.

It looks like former De Beers CEO Gareth Penny will prevail in his bid to take over his company—according to Bloomberg and the Financial Times, which report he’s the force behind the Global Diamond Consortium, Anglo’s choice to take its 85% stake in De Beers.

Some quick thoughts:

• Globaldiamondconsortium.com was registered less than a month ago. Let’s keep an eye on it.

• Penny was always considered the leading contender to take over De Beers. He has spent the last year traveling to the major diamond hotspots, including Botswana and JCK Las Vegas. He even visited Dubai after Iran began lobbing missiles at it.

• For many, Penny will forever be linked to De Beers’ Supplier of Choice (SoC) strategy, which he helped devise and implement. I still agree with SoC’s central insight—that diamond marketing shouldn’t just be left to De Beers or an industry-wide entity. Look at lab-grown: it’s achieved phenomenal success with a decentralized model where most companies promoted themselves (and by extension, the category). Notably, in a recent interview, Penny seemed to backtrack on the philosophy he once espoused, arguing that De Beers should resume its traditional “leadership” role.

• Many thought the problem with SoC was not necessarily the idea behind it, but the way it was implemented. I recently ran across an old comment from Mark Boston, the late De Beers broker, who complained that, under SoC, “the bond between sightholder and management became fraught and difficult.” Under SoC, De Beers professionalized—and set criteria for—a relationship that had long run informally. At least at first, those criteria called for sightholders to develop their own marketing projects. Many longtime clients resented having to jump through hoops—as well as change their business models—to stay members of the “club.” The SoC era led to a long list of diamond “brands,” most of which disappeared when De Beers no longer required them. As journalist Chaim Even-Zohar put it, Supplier of Choice became about companies trying to please De Beers, rather than doing what was right for their business.

• Of course, Penny was a lot younger when he ran De Beers. In a recent interview, he laid out his strategy for holding board meetings. My takeaway from that interview was that this guy’s been to a lot of board meetings and knows how to handle them better than most.

• The industry has changed a lot since Penny left. No doubt, so has he. He still has a first-rate mind and is one of the few people who knows what it’s like to run De Beers, though he may now do so under uniquely challenging circumstances. (To be fair, he’s faced tough times before, including in 2008, when he guided De Beers through the global financial crisis.) Assuming Penny takes over the company—whether as chair or CEO—I wish him the best of luck. He will need it.

  • For more background on Penny, check out the profile I wrote after JCK selected him as 2003’s “person of the year.” His selection rankled some readers.

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Bezos’ bozos at Washington Post write bad piece about diamonds

About a decade or so ago, I was interviewed by _Washington Pos_t writer Sarah Kaplan for piece about lab-grown diamonds. Afterward, we talked, and she said that she was enthusiastic about Jeff Bezos taking over, noting he was re-investing in the paper. I was skeptical that a tech bro not known for his ethics would do anything with a great newspaper but use it for his own benefit. But I figured she knew better than me.

Of course, it’s now clear that Bezos has all but destroyed the Washington Post. Once known for offering a wide range of views, the paper is now mandating its editorial board only run articles that support “personal liberties and free markets,” whatever that means. Articles “opposing those views will not be published,” according to the BBC.

This weekend, the Post’s new editorial board—which hasn’t exactly been winning rave reviews—wrote an amateurish piece about diamonds, which, bizarrely, claims that the “real hero of the De Beers story is capitalism.”

It’s hard to imagine a more misguided take. As even the piece acknowledges, it was the European Union’s antitrust division (i.e. a government) that truly ended De Beers’ dominance of the market, and even that took 100 years. We can only hope it won’t take that long for governments to curtail the anti-competitive actions of Jeff Bezos’ company, Amazon.

But what about lab-grown? Isn’t that a great capitalist innovation? If the EU hadn’t broken up the cartel in the 2000s, and De Beers was still the force it was in the 90s, you can be sure that lab-grown would not have gained the foothold it has now. The cartel was over long before lab-grown came on the scene.

As is customary, the Post mindlessly parrots the idea that lab-grown diamonds (which it calls “vat-grown”) are inherently “ethical,” never bothering to research the considerable evidence to the contrary. (And yes, the natural diamond business still has plenty of issues.) The piece also calls Anglo American De Beers’ owner, when it’s actually its co-owner. (I’ve requested a correction but haven’t received a response.) But informing readers that the government of Botswana owns 15% of the company might cloud the “ethical” message.

Last year, around 60,000 people cancelled their Post subscriptions after the publication laid off nearly half of its staff. Recently, I resubscribed: I figured it was only $40 a year (cheaper than this Substack!), and it still had reporters doing good work. But after this piece, I cancelled again, though it hasn’t given me my 40 bucks back.

It may need it. In 2022, cable channel Showtime aired a film called “Nothing Last Forever,” which predicted the end of the natural diamond business. Ironically, that title proved all too true, as Showtime folded shortly after that film aired. I don’t believe in karma, but there’s something unseemly about cheering the death of industries when so many people depend on them.

We’re living in a scary time, when nearly every industry and profession faces “disruption,” financed by a handful of oligarchs who have developed technology that can reproduce almost anything, including diamonds, flowers, vegetables, journalism, and almost every form of creative expression. Perhaps it’s time to have compassion for people who are suffering the effects of this disruption, rather than cheering it on.

It is true that De Beers faces a shaky future. And yet, the way things are going, it may last longer than the Washington Post.

Qatar accepted in World Federation of Diamond Bourses

Qatar was accepted as a member of the World Federation of Diamond Bourses (WFDB) at the recent World Diamond Congress in Singapore, though not without controversy, given the country’s support of Hamas.

Yet, WFDB officials say they couldn’t think of many arguments to exclude the country: Qatar is a member of the Kimberley Process. Unlike Russia, which left the WFDB following its invasion of Ukraine, Qatar is not currently subject to any sanctions. (In fact, it’s famously given the United States a $400 million plane.) It was also a reported backer of at least one of the bids for De Beers, so it didn’t make sense for the WFDB to get on the oil-rich country’s bad side. (Qatar was also a longtime shareholder in Tiffany before it was acquired by LVMH.)

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Jewelry ad of the week: Graff

Luxury jewelry house Graff has unveiled its first spot with Jung Kook of BTS:

Last week’s most-clicked links

Here are the links Jewelry Wire readers clicked the most last week:

1. Zoë Kravitz’s giant bezel diamond engagement ring could be the next big bridal trend (Elle)

2. Jewelry ad of the week: Tiffany & Co. (Instagram)

3. Princess Kate is in the “early stages” of building a Diana-style gemstone legacy, says Jewelry Expert (Marie Claire)

4. Zendaya and the earrings with a 3,000-year history (Lost in Jewels)

5. “The Diamond King”: podcast about Nirav Modi (YouTube)

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Today’s daily jewelry links cover Lucara, Rio Tinto, Martha Stewart, Jeffrey Mann Jewelers, Fabergé, Rami Baron, and more!

Company news

• Amazon and TikTok selling jewelry with dangerous levels of cadmium (The Sun)

Diamond news

• Rio Tinto still processing diamonds from shuttered Diavik (Rapaport)

• Rami Baron: “Lessons from my father” (YouTube)

• Can Lucara’s rock revive diamond industry’s woes? (The Times; subscription)

• Where do the biggest diamonds come from? (The Conversation)

Fashion and design news

• The jewelry rules to follow and break (The Adventurine; subscription)

• Martha Stewart is now in the ring business (JCK)

• My obsession with Fabergé (The Jaded Curator)

Gold news

• India’s gem and jewelry exports climb 26% in June, with gold leading growth (Business Standard)

People news

• Walmart names Kyle Kinnard to replace departing U.S. chief operating officer Kieran Shanahan (Reuters)

Retail news

• Retail sales soar over 11% in June (Retail Dive)

• Brooke Avidor-Reiss joins Jeffrey Mann Fine Jewelers (LinkedIn)

Watch news

• Secondary market flat in June after April gold rush (WatchPro)

• Switzerland’s state aid of watchmaking sector shows structural problem (Business of Fashion; subscription)

Miscellaneous

• Sonia Esther Soltani’s pearl syllabus (The Portrait Cut)

• Is anti-anxiety jewelry becoming Gen Z’s discreet stress buster? (India Today)

• Vanessa Friedman ponders if jewelry goes with jeans and a t-shirt (The New York Times)

Have a comment or news tip? (We love news tips!) Leave it below or email rob@thejewelrywire.com

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