Rise of Synthetic Diamonds Not a Worry to Local Jewelers

Every Christmas, Jeff Hurwitz surprises his wife with a different piece of jewelry from his store, Colonial Jewelers. His favorite gift to her was a natural diamond necklace he gave her on New Year’s Eve 1999, when everyone was talking about Y2K.

“There’s history and romance connected to [diamonds],” he said. “Diamonds are like snowflakes — each one is completely different.”

That particular necklace’s history had two lives, he said. A woman bought it from Colonial Jewelers in the 1970s and later gave it to her daughter, who brought it in and sold it back to the store as an estate piece.

An increase in the producers, quality and variety of manmade diamonds, created in labs instead of mined, could change the industry that markets itself on the scarcity of the product. But jewelers don’t seem worried.

Hurwitz said it’s difficult for even experts to tell the difference between the manmade and naturally created diamonds, but he views the created ones as “glorified cubic zirconias.” Cubic zirconias are manmade to look similar to diamonds but are easy to tell apart.

What makes a mined diamond special, he said, is its rarity.

“It’s a lot of work to find a diamond,” he said.

He said he’s seen manmade diamond producers at trade shows more the past few years and has been offered the stones, but the store prides itself on selling only natural diamonds. He sees the interest in the manmade diamonds as a fad that will fade.

Yaneth Reyes, of Yaneth Reyes Jewelry in downtown Frederick, said her store also doesn’t sell manmade diamonds. She said the design and settings are what make the jewelry special. Synthetic diamonds that have become more widely available aren’t seen as competition.

“Everybody has different service to offer to the customers,” Reyes said. “That’s what we have to offer our customer — unique pieces.”

Signet Jewelers has a policy for all of its brands to sell only natural diamonds. Signet Jewelers owns Kay Jewelers, Zales, Jared the Galleria of Jewelry, Shaw’s Jewelers, Piercing Pagoda and more.

Jewelers of America spokeswoman Amanda Gizzi said that as retailers put manmade diamonds in stores, sales will increase, but those stones will not replace mined diamonds. There wouldn’t be competitive pricing because they are two separate products.

“It’s definitely something that is a nice alternative for different price points,” she said.

She said the association sees any new product as an opportunity to introduce new customers to jewelry.

Gizzi said one of the biggest things the association is monitoring is the value of the lab-created stones and how they can retain their value as more come to market. With mined diamonds, experts are able to value the stones because of the quantity being mined.

A 1-carat synthetic diamond might cost $500 to $1,000, Hurwitz estimated. A natural diamond of the same size could start anywhere from $3,000 to $5,000.

He believes that in a few years, manmade diamonds will be a tenth of the price they are now. He said that’s what happened when rubies and sapphires first were created in a lab. The price started high, but once more producers made them, they were more common and cheaper.

Morgan Stanley predicted that lab-grown diamonds could take a 15 percent market share in gem-quality melee, or small, diamonds and a 7.5 percent share in sales of larger diamonds by 2020.

Gizzi said lab-created diamonds have been around for a few decades. Over the past few years, they have been better in quality and colorless and have had more varieties in sizes. She said jewelers will start selling them if their customer base starts asking for them.

Hurwitz said he hasn’t heard any interest from customers at Colonial Jewelers.

“Diamonds are just going to get rarer and rarer, and synthetics are just going to get more popular,” he said.