De Beers And LVMH "Break Up"! De Beers Acquires All Shares Of The Joint Venture

　 About De Beers Diamond Jewellers

In 2001, De Beers Group, in order to strengthen the core business of the company - diamond raw stone mining, build a complete supply chain for high-end jewelry sales, expand retail business, and LVMH cooperated to establish a joint venture jewelry company De Beers Diamond Jewellers, which launched De Beers Brand diamond jewelry.

　　De Beers We want to use this joint venture to increase the demand for raw diamonds. In addition, as one of the largest diamond raw stone suppliers in the world, the company hopes to expand new business areas through retail cooperation in order to solve the problem of antitrust.

LVMH hopes to accelerate the growth of watch and jewelry categories and seize a larger market share of the jewelry industry with an output value of $60 billion at that time. Bernard Arnault, Chairman of the Board of LVMH At the opening press conference of De Beers Diamond Jewellers, he said that the company's goal was to build one of the largest jewelry companies in the world within 10 years.

LVMH's watch and jewelry brands at that time included Tag Heuer, Ebel, Chaumet, Zenith and Fred。 However, LVMH subsequently acquired a major jewelry brand - Italian luxury Jewelry brand Bulgari. Since then, De Beers Diamond Jewellers has become a sideline of LVMH.

De Beers Diamond Jewellers won De Beers and LVMH has a total investment of 400 million dollars, with 50% equity of both parties. The first step of the joint venture's strategy is to open an independent brand store and launch a series of high-end jewelry. LVMH also focuses on creating De Beers The brand image of Diamond Jewellers hopes to be deeply rooted in the hearts of the people.

The first endorsers of De Beers Diamond Jewellers include supermodels: Chanel Iman, Erin O'Connor and Amy Wesson, the first commercial film was shot by Nick Knight's hand lens in the summer of 2002.

In the early days, the brand constantly changed its design concept due to the constant adjustment of its strategy, constantly changing its designers: for a period of time, it emphasized the cutting-edge style, for a period of time, it pursued oversized diamonds, and then began to focus on engagement rings.

　　 Industry review

Although this investment is a drop in the bucket for LVMH, in fact, the cooperation between the two sides has not created any significant achievements.

According to insiders, De Beers and LVMH The board of directors has not reached a consensus for a long time, and the corporate cultures of both sides are very different: "One side is the industry leader who once had a strong voice in the extensive and turbulent diamond mining industry (De Beers), one party is used to doing things in a luxurious way Luxury Group (LVMH)。 De Beers doesn't know how to market a luxury jewelry brand. The strategy formulated by the company encountered many obstacles in implementation. It is also expected that such cooperation will fail. "

After the news was announced on Wednesday, analysts were very supportive of LVMH's decision to sell the equity of De Beers Diamond Jewellers.

Luca Solca, Managing Director of BNP Paribas, commented that LVMH chose to cooperate to establish De Beers Diamond Jewellers The main reason is that the Group has no well-known jewelry brands; After the acquisition of Bulgari, the situation has changed fundamentally. LVMH no longer needs this joint venture.

Julian Easthope, luxury goods analyst of Barclays Capital, believes that De Beers Diamond Jewellers As a joint venture established by both parties, it is not a brand of LVMH Group in the true sense, and it only belongs to a small part of the watch and jewelry category of the Group. Therefore, LVMH It is entirely appropriate to choose the right time to clean up the brand portfolio.

　　 Future development

Brian Cleaver, CEO of De Beers Group, said that he had full control of De Beers Diamond After Jewellers, the company's entire retail network will be further integrated, including 32 stores in London and Paris and 1 new store and increase the supply of goods. At the same time, the company has been accelerating its business into the Greater China market.

Since 2015, De Beers has been working with the French Fashion Union (F é d é ration Fran ? aise de la Couture du Prêt-à-Porter des Couturiers et des Créateurs de Mode) as an official member to participate in the Paris Gaudin Fashion Week to display its high-end jewelry series.

By fully integrating the brand and store network of De Beers Diamond Jewellers, De Beers The quality of brand premium jewelry will go up to a higher level and strengthen differentiation. In addition, the company's jewelry brand Forevermark is growing at full speed.

Forevermark brand is mainly sold through third-party retailers, with more than 2000 global sales outlets; and De Beers At present, the retail business of the brand is directly operated by the company.

In the 2016 annual report, Anglo American, the parent company of De Beers, said that De Beers As the world's leading diamond producer, it produces about one-third of the world's raw diamonds by value. De Beers hopes to rely on its jewelry brands Forevermark and De Beers Diamond Jewellers stimulate the demand for diamonds.

Anglo American's core mining businesses include diamonds, copper and platinum. After the serious downturn of bulk commodities in 2015, it has basically recovered its vitality like other mining companies.