The US luxury jewelry market is experiencing a seismic shift, driven by the adoption of lab-grown diamonds and evolving consumer preferences. Despite mass-market retailers like Signet Jewelers struggling with declining sales, high-end luxury brands are thriving. Investors must navigate this complexity carefully, focusing on companies that prioritize sustainability and adapt to shifting demand.
The divergence in luxury jewelry is evident, with the US market growing 5% in 2024 to $85.4 billion. However, mass-market retailers face a slowdown in 2025, with sales projected to decline by 13-16% over three years. In contrast, luxury brands are booming, with Richemont’s Americas division seeing a 15% sales surge in 2024.
Lab-grown diamonds (LGDs) are now dominating the engagement ring market, with 51% of couples choosing them in 2024. This trend has democratized access to luxury, creating a new market tier. Luxury brands are responding by integrating LGDs into high-end collections, such as De Beers’ Lightbox Jewelry division.
Affluent consumers are still valuing jewelry, but their priorities have shifted. They now prioritize ethical sourcing, craftsmanship, and uniqueness over carat weight. This bodes well for luxury brands like Cartier and Tiffany, which emphasize heritage and sustainability.
However, investors must be aware of the risks. The jewelry market’s resilience hinges on macroeconomic stability, and a recession could hit engagement ring purchases hardest. Investors should focus on adaptation and sustainability, avoiding mass-market retailers and instead backing luxury brands with strong sustainability credentials.
Recommendations include investing in lab-grown diamond pure-plays like Diamond Foundry and Aether Diamonds, as well as luxury resale platforms like Vente-privee and Vestiaire Collective. By prioritizing companies that align with evolving consumer values, investors can tap into the growing demand for sustainable and unique luxury jewelry experiences.
Source: https://www.ainvest.com/news/jewelry-market-resilience-luxury-decline-navigating-divergence-disruption-2507