Tenoris CEO Edahn Golan’s review of the US jewelry market’s performance in 2023: a mixed bag of results.
2023 ended with disappointing US results. The figures were impacted by various factors, with the lab-grown diamond market nibbling away at market share as an unprecedented number of jewelry stores closed amid a slowdown in sales (after the exceptional resurgence seen during the post-Covid years).
Tenoris provides an analysis of the realities underlying these figures, while offering some indicators for 2024.
2023: a bad year for the US jewelry industry
Figures for 2023 were down 5.3% on 2022, ending with a disappointing holiday season. However, in December, the average value of sales increased, meaning customers bought less but better.
Sales of natural diamond jewelry fell by 5.9% in units and by 4.8% in value, while the volume and value of lab-grown diamond sales rose by 56.2% and 40.6%, respectively.
We will need to keep an eye on several areas in 2024.
- How will the jewelry market perform? While the high-end and low-end extremes of the market recorded a decline in 2023, the mid-market segment (sales worth between $1,500 and $5,000, i.e., 36% of the market in 2023) remained incredibly stable compared to 2022. This will be a useful indicator for 2024.
- Will natural diamonds regain ground? Unit sales of engagement rings set with lab-grown diamonds rose by 33% in December compared with the previous year. Most of the growth was in prices under $5,000 – especially rings between $500 and $750 (+118% in volume) – while the $5,000 to $7,500 price bracket saw a 26% decline. Have lab-grown diamonds reached the “too big to be true” stage? Could natural diamonds win back this segment? In the $12,500 to $15,000 price bracket, they already have, recording a 12.5% increase in sales in December compared with December 2022.
- The importance of the holiday season for natural diamond jewelry
Sales of natural diamond jewelry rose by 2.8% in units and 6.5% in value during the festive season compared with last year. For the first ten months of the year, sales were down 10% in terms of revenue and units. According to Tenoris, natural diamonds regularly perform well in December, but are then outperformed again by lab-grown diamonds. This trend was clearly confirmed last December. Could natural diamonds become jewelry for the big occasion only?
- Unset diamonds: two distinct paths for natural and lab-grown
Throughout 2023, demand for unset natural diamonds declined significantly compared with 2022. But volume saw a steeper drop than value, reflecting consumer demand for more expensive natural diamonds.
Consumers invested more in unset lab-grown diamonds, but the average spend per stone fell (-24% in December). Compared with the spectacular growth of 2021 and 2022, the results for 2023 show a marked slowdown. But retailers are significantly increasing their gross margins as the production costs of lab-grown diamonds continue to fall. Around a third of purchases are in the $2,500 to $5,000 price bracket.
