De Beers Group and LVMH Moet Hennessy Louis Vuitton announced this morning the establishment of a new company to develop the global consumer brand potential of the De Beers name. The new company will have the rights to use the De Beers brand for luxury goods in consumer markets, with a primary focus on premium diamond jewelry.
The companies will invest equal capital contributions and share equal ownership of the new company, though management is the responsibility of LVMH. Myron Ullman, managing director of LVMH, is chairman of the new company. De Beers will offer technical diamond expertise.
According to De Beers, the new company will work closely with leading polished diamond suppliers worldwide to supply diamonds to the high standards demanded by the brand. De Beers says its core business remains the mining and marketing of rough diamonds. The new company, it adds, is an extension of its supplier-of-choice strategy announced in July 2000. Under this strategy, De Beers champions a multibrand marketplace. Its clients are expected to participate in branding and marketing efforts with downstream partners, resulting in more competition and branding efforts to increase the demand for diamonds.
Now, the De Beers name enters the fray. "The expertise of LVMH will not only help realize the value inherent in the De Beers brand, but also create a more competitive market for diamond jewelry," says De Beers Chairman Nicky Oppenheimer. LVMH's Ullman adds, "We are delighted to include the world's premier diamond brand in our expanding portfolio. By contributing our established strengths in brand management and retail marketing, the De Beers brand has the means to achieve its very strong potential."
LVMH owns several high-end fashion and leather goods brands, including Louis Vuitton, Celine, Loewe, Kenzo, Givenchy, Christian Lacroix, Fendi and Pucci. In the cosmetics sector, it owns Christian Dior, Guerlain, Givenchy and Kenzo. Its jewelry and watch division includes TAG Heuer, Ebel, Chaumet, Zenith, Fred and Omas.
The announcement puts to rest speculation about a De Beers retail partnership, though LVMH was the odds-on favorite in recent weeks.
- by Robert Weldon, G.G.