NY-based diamond wholesaler ARAZI has announced a change in its distribution strategy. Effective immediately, the company will discontinue its asset/memo support program for retailers that carry or promote lab-grown diamonds. This decision aims to maintain consumer confidence in natural diamonds in light of falling lab-grown prices.
Concerns Over Market Trends
Josh Arazi, vice president and creative director of ARAZI, highlighted the company’s concerns regarding the market viability of lab-grown diamonds. Arazi remarked, “With the prices of lab-grown diamonds drastically comparable to CZ’s, ARAZI does not wish to wait until jewelers are competing with gas stations to distance ourselves from such stores. We have observed declining sales trends in monthly reports from these retailers, contrasting sharply with the continued growth of stores focused on today’s and tomorrow’s high-end consumers. This is compelling evidence supporting our strategic pivot.”
ARAZI’s also feel that this decision is important to maintain the brand’s integrity in fine jewelry. Arazi emphasized, “Representing the ARAZI Jewelry Collection alongside lab-grown diamonds does not align with our brand’s commitment to excellence in fine jewelry. We take pride in our association with the finest retailers and products in the luxury jewelry industry.”
Impact on Retailer Relationships
The company’s decision follows internal discussions and reflects its standards within the jewelry sector. ARAZI will honor existing orders and maintain its customer service commitments. Under current agreements, ARAZI has the right to terminate contracts under specified conditions. Retailers affected by this decision have been given a 30-day notice of termination. Arazi stated, “As per our agreement, we are providing a 30-day notice of termination to affected retailers. We are open to reconsidering our decision if retailers choose to discontinue their promotion of lab-grown diamonds.”
Future Outlook
ARAZI invites affected retailers to continue purchasing its products under revised terms, expressing gratitude for their partnership and support. The company remains focused on its association with quality products and retailers in the industry.
Implications for the Jewelry Industry
This strategic move by ARAZI could indicate a broader industry trend where luxury brands may increasingly distance themselves from lab-grown diamonds to preserve their premium market positioning. Jewelers should monitor these developments, as they could influence consumer perceptions and sales dynamics within the fine jewelry market.
