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HOW THE LUXURY SEGMENT IS DEFYING PRICE VOLATILITY
Diamond World|November - December 2024
De Beers's and Alrosa's recent price cuts reflect market pressures, but for those willing to adapt, they open the door for innovation and strategic recalibration. Luxury houses such as Cartier and Van Cleef & Arpels exemplify how maintaining pricing integrity and creative expansion can transform challenges into long-term success, finds out Anjana Vaswani
- Anjana Vaswani
HOW THE LUXURY SEGMENT IS DEFYING PRICE VOLATILITY

In late 2024, as global diamond markets grappled with mounting inventory pressures, industry giants De Beers and Alrosa announced rough diamond price cuts, with De Beers reducing prices by approximately 10% to 15%, and Alrosa implementing cuts ranging from 5% to 15%. The adjustment reflects deep market dynamics --inventory challenges and softening demand, particularly in key markets such as the US and China, have pushed the sector towards what could be its most significant recalibration in recent years.

Yet, amid this apparent turbulence, luxury houses demonstrate remarkable resilience. In the quarter ending September 30, 2024, Richemont's jewellery brands, including Cartier, achieved a 4% sales increase, despite a 1% overall sales decline attributed to challenges in the Asia-Pacific region.

According to market research firm Statista, Richemont's jewellery maisons -- Cartier, Buccellati, and Van Cleef & Arpels generated a sales revenue of over €14 billion in 2024. Even LVMH, which faced an overall 4.4% revenue decline to €19.08 billion ($21 billion) in Q3 2024 across its luxury offerings, saw stability in its jewellery and high-watchmaking division, which includes Bulgari, Chaumet, and Fred.

This stability, particularly evident across key markets in Asia and America, is driven by strategic investments in new collections, and targeted marketing efforts. LVMH's performance reinforces

a core industry principle: by maintaining controlled pricing, introducing thoughtful design innovation, and executing strategic messaging, luxury brands can sustain desirability without diluting exclusivity a crucial strategy in today's uncertain economic climate.

CONTEXTUALIZING THE PRICE CUTS

De Beers's price adjustments signalled a necessary correction amid mounting inventory challenges, shifting consumer preferences, and economic headwinds.

This story is from the November - December 2024 edition of Diamond World.

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This story is from the November - December 2024 edition of Diamond World.

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