October 15, 2004
Leviev Says Diamond Promotion Costs Should Be Shared
Speaking at the Couture Diamond Leadership Conference in New York City on Oct. 14, Israeli diamantaire Lev Leviev said all major producers or miners of diamonds should share the cost of generically promoting the diamond category to consumers. Leviev, himself a diamond miner, praised De Beers and its Diamond Trading Co. for bearing these costs for years on its own.
Leviev's speech was generally critical of DTC's Supplier of Choice initiative, however. "I don't believe hundreds of brands will work. Only a dozen or so will survive in the long term," he said. "Too many brands cause confusion with consumers and they will fail."
Leviev told the audience of high-end retailers and suppliers he didn't think many of the partnerships and alliances being put in place due to the initiative were smart either especially for the weaker partners. Leviev is also worried about the effects of Supplier of Choice on diamond manufacturers, wholesalers and many retailers as the industry consolidates.
At the same time, Leviev endorsed the central goal of Supplier of Choice: Growing demand for diamonds. He cited research showing other luxury categories have grown much faster than diamond jewelry and thinks this fact must be addressed. He also said he is not against the industry becoming more efficient, but said wholesale traders in the middle of the diamond pipeline are still needed and their trading is necessary for efficient markets.
He summed up his advice to the audience with these points:
Never let your supplier run your business.
Never do business with suppliers who have formed partnerships too quickly.
If you are offered terms and memo arrangements that appear too good to be true, they probably are.
Never put all your eggs in one basket. Maintain independent and different sources of diamond supply.
by Peggy Jo Donahue