Articles about De Beers' possible branding partnership with or even an outright sale of its name to a luxury goods powerhouse such as LVMH (See related story - De Beers to Choose Retail Partner) are proliferating in the international financial press, with financial analysts and brand experts in South Africa and London weighing in.
The Financial Times of London published a story today quoting brand consultants who question whether De Beers can brand what's essentially a commodity. The brand consultants interviewed suggested instead that De Beers should make its name a trust mark or a guarantee of quality strategies the company considered in the past. Due to conflict diamonds and the proliferation of better synthetics, De Beers could easily position its diamonds as guaranteed to be conflict-free and natural.
The analysts also suggested De Beers work with a company like LVMH on brand extensions into jewelry lines, watches, purses and other products. LVMH is particularly experienced in this area, with its ownership of brands such as Christian Dior, Givenchy, Louis Vuitton and TAG Heuer.
Financial analysts interviewed by Forbes.com, however, say De Beers needs to hold onto its name through a partnership in order to see the financial benefit of a luxury branding campaign. With diamond demand possibly dipping this year and De Beers' new policy of no longer buying excess diamond supply worldwide, it needs other strategies to do what it has promised shareholders: beef up stock value.
- by Peggy Jo Donahue