“A diamond is forever” is a phrase James Bond and brides all over the world know all too well.
But a shiny diamond ring only became a virtual necessity during marriage proposals in the past few decades thanks to aggressive marketing by the company that at one point controlled nearly 90% of the entire diamond market — De Beers.
“In 1938, when the Depression had really cut into the American economy, the company De Beers hired an advertising firm [N. W. Ayer & Son] to help reinvigorate the social custom of giving an engagement ring,” said Rachelle Bergstein, author of “Brilliance and Fire: A Biography of Diamonds.” “They hired an advertiser who created a set of print ads that made the diamond ring feel really timeless. They wanted the product to feel classic and almost as if something that the knights were giving their ladies back in the medieval times. And they accomplished it.”
Bergstein’s book traces the history of diamonds in popular culture. It also looks at how many of today’s esteemed jewelry houses were founded by salesmen whose tactics today would shock many of their tony customers.
Pierre Cartier’s aggressive sale of the storied Hope Diamond was, to be polite, flabbergasting.
“The Hope Diamond is probably the most famous gemstone in America,” Bergstein said. “It has a fascinating history because many people believe it is cursed. Whether or not that is true, Pierre Cartier, who got his hands on it at the turn of the century, used that story to his advantage to sell it to a young capricious socialite with a lot of money on her hands called Evalyn Walsh McLean.”
Cartier, according to Bergstein, embellished the tale of the Hope Diamond, spinning a yarn of how in the 17th century merchant Jean Baptiste Tavernier supposedly plucked the jewel from the statue of a Hindu god. It then found its way in the hands of French, British, and Ottoman royalty, causing a string of bad luck wherever it went, according to the tale. Cartier likely played up the rock’s dark past to help convince the American heiress to acquire the gem.
“He leaked stories about the Hope to the press,” Bergstein noted. “The American public loves hearing about a stone that was so evil that it cursed the wealthy people who bought it. There’s something fantastic about the idea of a product that is attracting wealthy people and then ruining their lives.”
Of course, Cartier wasn’t alone in aggressively selling diamonds to the world. “Charles Lewis Tiffany, Harry Winston — these men really understood the power of the press,” Bergstein said. “Tiffany, when he was starting Tiffany & Co. (TIF), was one of the first American jewelers to compete on a global stage. The heritage jewelers were all in England, they were in France; they had access to royalty and so they had access to really wonderful, grand stones. Charles Tiffany was a bit of an upstart so he was able to make sure that the press knew when he was buying big diamonds. And at the time of Tiffany & Co.’s popularity, he was considered the King of Diamonds.”
Famed jeweler Harry Winston also made his relationship with the press a key part of his sales technique. “He would get his hands on a very big diamond and he would make sure the press knew about it,” Bergstein said. “When a big diamond was being cut, for instance, he would invite the press to come to his offices and watch.”
“They both really understood the media and I think were maybe ahead of their time in that way.”
Today, roughly $80 billion in finished diamonds are sold annually. And the industry is pinning a lot of its hopes on the rise of middle class diamond buyers in China and India.
But the days of a few big players controlling the supply — and demand — for diamonds have come to an end. At one point, De Beers had immense power in southern Africa (Zambia and Zimbabwe were known as Northern and Southern Rhodesia, respectively, named for De Beers founder, Cecil Rhodes).
The tarnish of “conflict” or “blood” diamonds tainted the industry and eroded the public’s perception of diamonds, Bergstein notes in her book. And then there’s the rise of “lab grown” diamonds that, unlike cubic zirconia, are chemically indistinguishable from natural diamonds. These factors took a toll on the once-dominant De Beers.
“There’s Rio Tinto (RIO) in Australia, there’s Alrosa (ALRS.ME) in Russia, and so De Beers now probably controls about 30% of the world’s diamonds,” Bergstein notes. “After the conflict diamond crisis, they changed the direction of the their business so that they were no longer marketing stones that they hadn’t mined themselves.”