De Beers seeks to spark diamond demand in holiday season

Diamond producer looking to bounce back.

De Beers, the world’s biggest diamond producer, is betting on a $100 million marketing blitz during the holiday season to spur a rebound in sales of the precious stones.

Diamond jewelry sales typically peak between Thanksgiving in the US and the Chinese New Year in January or February each year, and the season that’s about to start could spark a revival in consumer demand, De Beers chief financial officer Gareth Mostyn said in an interview Monday.

De Beers has cut its 2015 production target three times to try and support prices as demand wanes. The Anglo American unit will mine 29 million carats after it initially sought to produce as many as 34 million carats this year. Sales in the coming weeks will be “very important” to the gem company, Mostyn said.

“With a successful peak-selling season and with strong demand from consumers, this will be a platform to bounce back,” Mostyn said at a conference in the Botswana capital, Gaborone. “We are hopeful, but it’s too early to say when that will happen.”

 
The US is De Beers’ key market for polished jewelry, accounting for more than 40% of demand, with sales typically peaking between now and Christmas, he said. A record marketing campaign is underway in the US. “While it’s still early to say, there has been some good feedback,” he said. “Campaigns are also due to start in China.”

De Beers expects high stockpiles of diamonds to ease following the production cuts, helping prices for rough diamonds to recover. “But stimulating demand through our marketing is critical,” Mostyn said. Global diamond jewelry sales exceeded $80 billion last year and De Beers projects a similar level for 2016, he said.

©2015 Bloomberg News

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