Following the arrival of new Nivoda chief product officer James Morgan, who joined the company from Amazon Prime Europe in October 2022, Nivoda has outlined plans to expand its product range to include coloured gemstones. Additionally, the company will focus on introducing shorter delivery times and new payment and credit options to its platform.

Aiming To Make Global Trade Simple

Since launching in 2019, Nivoda’s marketplace has experienced substantial growth, now boasting over 1.6 million natural, laboratory-grown, and melee stones worth approximately USD $4.1 billion.

According to Nivoda’s co-founder and chief executive, David Sutton, the funding round was more than just an infusion of capital. “Within the first couple of calls with Taylor and Mathias from Headline, I could tell they shared our vision for Nivoda,” Sutton said. “They have already helped us unblock parts of our go-to-market and accelerate us in areas across the company. We are proud to have Headline as our lead investor in our Series A.”

Nivoda’s vision is clear: to build a trusted global marketplace for the jewellery industry by focusing on improving the customer experience and making global trade simple. This mission aligns closely with the needs of the UK jewellery industry, which continually strives for improved supply chain efficiency and better service for both retailers and customers.

Aiming To Improve the Diamond Supply Chain

One of the key points of interest for the UK jewellery industry is Nivoda’s potential to improve the diamond supply chain for more retailers – providing a marketplace that quickly sources, checks, and delivers diamonds in a matter of a few days.

Furthermore, Nivoda has demonstrated its commitment to assisting retailers in launching e-commerce presences through API feeds and e-commerce tools, including a Shopify plugin. This e-commerce support is invaluable in today’s digital-first retail environment, and UK jewellers can leverage these tools to enhance their online presence and sales.

The investment underscores the ongoing transformation of the diamond industry towards a more digital, efficient, and customer-focused model – something that both online and traditional bricks and mortar jewellers need to continue to monitor.

This marks the twelfth consecutive increase in UK interest rates, driven by persistent inflation that has consistently surpassed the central bank’s expectations. Headline Consumer Price Index (CPI) inflation remained above 10% in March, significantly higher than in mainland Europe or the US.

Inflation Forecast Revised Upwards

The Monetary Policy Report (MPR) was published alongside the latest decision, detailing the BoE’s current assessment of inflation and the economic outlook.

Notably, the BoE has revised its growth and inflation forecasts upwards. The GDP forecast for Q2 2024 has been revised from -0.3% to +0.9%, marking the largest upward revision in the history of the independent central bank. CPI inflation for the same period has been revised up from 1% to 3.4%.

High Fixed-Rate Mortgages and Rising Inflation

The BoE highlighted the high proportion of households on fixed-rate mortgages as an important factor in the current interest rate cycle.

This factor has reduced the impact of rising interest rates on the household sector compared to historical levels of interest rates. Additionally, food inflation and higher than expected manufacturing and supply costs are key contributors to the inflation rise.

What Does this Mean for UK Jewellers?

Rising interest rates can have both positive and negative implications for the UK jewellery industry.

Impact on Consumer Spending

As interest rates increase, the cost of borrowing rises. This can lead to a reduction in discretionary spending as consumers may have less disposable income.

This could potentially result in decreased demand for luxury goods, including jewellery. Consequently, jewellers might need to consider innovative marketing strategies to maintain sales, such as promoting affordable luxury items or offering interest-free finance options.

Effect on Gold Prices

Interest rate rises often result in higher gold prices, as we have seen over the last 18 months.

Increased costs for can have an immediate and obvious impact profitability if we try as an industry to not pass these higher costson to the consumer. On the other hand, higher gold prices can also increase the perceived value of gold jewellery, potentially making such items more appealing to customers.

Currency Fluctuations

Higher interest rates can strengthen the value of the pound, making imports cheaper.

As many UK jewellers rely on imported gems and precious metals, this could potentially offset some of the increased costs associated with higher gold prices.

Planning for the Future

Given the BoE’s forecast, the jewellery industry should prepare for potentially more interest rate hikes. Monitoring inflation and labour market data will be key, as these factors will influence the BoE’s future decisions.

Everledger, founded in 2015 by Leanne Kemp, has been an industry pioneer in utilising blockchain technology to ensure transparency in the supply chains of diamonds, art, high-end fashion, wine, and even luxury automobile manufacturing. Among its high-profile partnerships were luxury fashion brand Alexander McQueen and automaker Ford, with whom it collaborated to track electric vehicle (EV) batteries throughout their lifecycle.

Despite such promising collaborations and solid backing from investors, the company’s latest funding round with an unnamed investor fell through. In a statement, Kemp explained that the company found itself in a “difficult and unexpected position” when the second tranche of funding failed to appear.

Everledger was not short of prestigious backers, with the likes of Chinese internet giant Tencent, GMP Securities, Rakuten, and Fenbushi among its investors. Tencent, the owner of the popular social media platform WeChat, led Everledger’s Series A funding round with a $20 million investment and matched a further $3.5 million secured through the UK Government’s Future Fund in 2021.

Everledger’s collapse comes as a shock given its impressive fundraising history. Over the past eight years, the company raised over $51.7 million in external investment and secured $3 million from the Australian government’s blockchain pilot grant in 2021. Notwithstanding these substantial investments, the company was unable to continue operations and declared insolvency in April 2023.

Implications for the Jewellery Industry

Everledger’s administration is indeed a significant development in the jewellery industry. Its innovative use of blockchain technology offered a unique solution to the industry’s ongoing challenges of transparency and provenance, particularly in the diamond trade. Its fall might cause some disruptions in the short term, especially for those who have integrated Everledger’s solutions into their operations.

However, the void left by Everledger’s departure from the market also presents new opportunities. Other blockchain-based solutions providers may step in to fill the gap, possibly sparking innovations and improvements to the technology and its application in jewellery supply chain tracking.

Nevertheless, this development serves as a sobering reminder of the volatility and unpredictability of tech investments and the critical importance of sustained funding for the survival of start-ups. For jewellers and other industry stakeholders, this may prompt a more cautious approach when considering partnerships with tech-based solution providers.

The industry will undoubtedly be watching keenly to see how Everledger’s administration unfolds and the long-term impact this will have on the use of blockchain technology in the jewellery supply chain.

However, it wasn’t all gloomy news for retailers. Despite the overall downturn, some key shopping hotspots witnessed a surge in footfall, according to data from MRI Springboard. London’s Knightsbridge, for instance, bucked the trend with a hefty 57.7% increase in footfall between 10 am and 3 pm compared to the previous week.

This unexpected spike in certain locations is largely credited to public screens set up in towns and cities, allowing people to watch the Coronation. Notably, King Edward Street in Hull experienced a 3.9% rise in footfall, while New George Street in Plymouth saw a 7.8% uptick compared to the previous week. Sunderland’s Market Square, however, experienced a 20.5% dip in footfall during the event itself (from 10 am to 3 pm), but a noteworthy 11.9% rise over the 24-hour period.

The day after the Coronation, May 7, saw footfall data up to 12 pm suggesting a 6.4% decrease in footfall across all UK retail destinations compared to the Early May Bank Holiday weekend.

In conclusion, the Coronation of King Charles III brought about mixed outcomes for UK retailers, with the overall impact seemingly dependent on the local arrangements for public viewings of the historic event.

The Argyle Rose is priced at A$2 million and will be exclusively available for purchase through the designers Solid Gold Diamonds, located in Perth. The piece showcases the last diamonds mined from the Argyle mine, including rare pink and blue diamonds.

A Captivating Masterpiece

The centrepiece of the Argyle Rose is a 1.36 carat fancy deep pink radiant-cut diamond. This is one of only twelve diamonds with a colour grading of 1P from the last 30 years of Argyle’s production.

Surrounding the centre stone are petal-shaped pink and blue Argyle diamonds, totalling 1.89 carats, accompanied by 2.80 carats of brilliant white diamonds. This rose motif is set in a combination of platinum and 18k white gold.

The Argyle Rose can be worn as either a ring or a statement pendant.

A Lasting Legacy

Sinead Kaufman, Chief Executive of Rio Tinto Minerals, expressed her delight in introducing the Argyle Rose to the world. She emphasised the rich history and provenance of this jewellery piece.

“These rare and precious diamonds are one and a half billion years old, from one of the most beautiful places on earth, and the world is simply not producing them anymore.” said Kaufman.

Argyle Pink Diamonds Icon Partner program

The Argyle Rose is an integral part of the Argyle Pink Diamonds Icon Partner program, initiated by Rio Tinto in 2022, to ensure the preservation of the origin and value of Argyle pink diamonds.

With the closure of the Argyle mine in November 2020 after 37 years of operation, the program aims to celebrate and protect the legacy of these exceptional gemstones.

The Argyle Pink Diamonds Icon Partner program collaborates with renowned international jewellers, known for their meticulous craftsmanship and innovative designs. Solid Gold Diamonds, located in Perth, Western Australia, has been involved with Argyle diamonds for three decades.

Peter Greene, Executive Chairman of Solid Gold Diamonds, said that “As a pioneer custodian of Argyle pink diamonds, it was incredibly humbling to be asked to design a true generational heirloom for the Argyle Pink Diamonds Icon program.”

This decrease has brought the index down to 7,159 as of May 1st, compared to its 7,543 standing at the start of the year.

Diamond prices across other sizes also exhibited weakness, with only 0.30-carat diamonds showing some stability.

Dampened Demand in Major Markets

This downturn in diamond prices is primarily due to sluggish demand in the US and China, the world’s leading markets for diamond jewellery.

Avi Krawitz, Senior Analyst at Rapaport, explains, “Polished trading was quieter than usual in April. Economic uncertainty stemming from the rise in consumer prices over the past year has impacted discretionary spending and discouraged retailers from buying inventory.”

Retailer Strategies Amid Uncertainty

In response to this uncertain market, US jewellers have cut back on bulk purchases, opting instead to focus on memo to avoid accumulating excess goods. Simultaneously, Chinese buyers are proceeding with caution due to economic prudence on the mainland. While retail in Hong Kong is seeing improvement, bolstered by a revival in tourism, a slowdown in trading indicates restraint among Chinese dealers.

Rising Inventory and Limited Supply

Interestingly, the level of midstream polished inventory continues to rise, even as manufacturing levels have fallen.

Polished production is considerably below capacity, with restrictions on Russian supply limiting the availability of rough diamonds. In India, the largest diamond manufacturing hub, rough imports for the first quarter were down 22% year on year to $4.26 billion.

The Market Outlook

Despite these challenges, dealers remain hopeful for a lift in sentiment and boost in demand in the second half of the year, with the upcoming Las Vegas shows expected to play a crucial role.

However, the diamond trade has had a rough start to 2023, and the Las Vegas shows will serve as a litmus test for the state of the crucial US market.

Implications for UK Jewellers

For UK jewellers, these global trends could have several implications. The reduction in diamond prices might present an opportunity for jewellers to stock up on diamonds at a lower cost. However, this must be balanced with the risk of owning excess inventory in a potentially uncertain market.

Furthermore, the caution exercised by US and Chinese buyers could also be a prudent strategy for UK jewellers. Shifting focus to more flexible models like memo could offer a more adaptable approach in the current environment.

Finally, the challenges faced in the global diamond market underscore the importance of staying informed and prepared. UK jewellers should keep a close eye on upcoming events like the Las Vegas shows for any indications of a shift in market sentiment and demand trends.