De Beers in Expansion Mode

The brand is rapidly advancing on China: Later this week, it will open a second unit in Hong Kong.

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LONDON — De Beers Jewellery is rapidly advancing on China: Later this week, it will open a second unit in Hong Kong and, over the past month, it has also cut the ribbon on stores in the northern city of Tianjin and in Dalian, a seaport in the northeast.

This story first appeared in the December 15, 2011 issue of WWD.  Subscribe Today.

The jewelry brand, a venture between De Beers, the diamond miner and marketer, and LVMH Moët Hennessy Louis Vuitton, planted its first flag in Mainland China in May, with a 734-square-foot shop at Shin Kong Place in Beijing.

The man behind the rapid-fire retail expansion is François Delage, an Asia-Pacific expert who has been chief executive officer since 2009. Before taking up his current role, he was in charge of the De Beers wholesale diamond brand Forevermark, and had previously been president of Louis Vuitton Asia-Pacific.

During an interview at his Bond Street office next door to the De Beers Jewellery flagship, Delage said the openings in China would continue at the pace of three to five a year.

“We have about 30 cities on our radar for the long term,” said Delage, a Frenchman with an infectious enthusiasm for his work. “I don’t know of any ‘secondary’ cities in China. When people refer to secondary cities, they are talking about the population of London and Paris combined — more than 10 million people.”

Although the first Mainland store opened just seven months ago, the Chinese already know the De Beers name: “The first thing a Chinese consumer says when they hear it is, ‘A Diamond Is Forever,’” said Delage, referring to the longtime advertising slogan used by the Diamond Trading Co., an arm of the De Beers group.

As for the Chinese fine jewelry customers, Delage said they are tough: “They are very discerning, knowledgeable and aware. You cannot impress them — you have to earn their respect.” He added that the Chinese — generally speaking — have laser vision when it comes to evaluating the quality of a stone.

“They are used to using their eyes. Take jade for instance. You can buy a piece of jade for 5 [yuan] or for $5 million. The Chinese look closely at the translucidity, the color gradation. That is also a reason why fancy colored diamonds and white solitaires are such a success in China,” he said.

Delage said women as well as men are buying diamonds. Traditionally, the Chinese luxury customer is the male, the one who controls the family purse strings.

“In addition to the young couples looking for an engagement ring, there are women who are buying for others and for themselves. My very first client in Tianjin was a woman in her mid-20s who came in with her mother. She was wearing a chain around her neck and wanted something to hang on it,” he said.

She walked out with a pendant from De Beers’ Talisman collection, which features colored rough diamonds arranged in concentric circles.

Delage has more than China on his radar: There are some 41 De Beers Jewellery stores worldwide, 10 of which are franchises. In the first quarter of 2012, he plans to open a flagship in Moscow, and units in Kuala Lumpur, Malaysia, and Baku, Azerbaijan. The brand has recently refurbished its Dubai unit and opened a store in Almaty, Kazakhstan.

Retail rollout is only part of the story. Since arriving in 2009, Delage has kept a low profile as he set about tweaking the brand image and perception and the products.

“I really set out to capitalize on the magic of the brand, to become the diamond jeweler of choice, of reference. After all, we are the sole, worldwide diamond jewelry brand. We’re a specialist, and we don’t do other gemstones. And we have 120 years of expertise in diamonds from De Beers.”

(Asked about Anglo American becoming De Beers’ majority shareholder last month, Delage said it has had no impact on his company’s strategies going forward. Anglo American bought out the Oppenheimer family’s stake in the miner for $5.1 billion, boosting its shareholding to 85 percent.)

Delage said his aim has also been to give the brand a gentler, lighter, more feminine feel in everything from the stores to the products to the press materials. “We want customers to feel an emotional bond with the brand,” he said.

The brand’s catalogues now have white or pastel backgrounds rather than dark ones with the logo in a delicate black typeface. It’s a stark contrast to the dark, very corporate look of the former branding.

Delage has built on the best-selling collections, adding even more flowers to the pieces in the Wildflowers collection or tweaking the Talisman line by using diamonds with softer, rounded edges rather than angular ones. He has added new collections at both ends of the price spectrum.

At the very high end, there is Swan Lake, a collection of pastel diamond jewelry inspired by the rhythm of breaths and precise movements of a prima ballerina. The collection is meant to be a showcase for the company’s diamond expertise and for the variety of cuts and gradients it uses. Prices start at 40,000 pounds, or $62,000 at current exchange, for a pair of earrings. A second high-jewelry launch is set for 2012, although Delage declined to reveal any details.

At the entry level, there is the Azulea collection of stackable diamond solitaire rings with textured gold bands. They cost 700 euros, or $930.

Earlier this year, the jeweler revamped its Web site, which now operates in five languages worldwide, and launched a book to mark its 10-year anniversary. “De Beers Jewellery” (Assouline, 2011) is a coffee-table book that celebrates diamonds, their cultural history and their manufacture.

Delage said he believes it’s an ideal time to be in the diamond jewelry business: “Times of crisis are opportunities. People are cutting out the superfluous and editing their purchases so that they can pamper themselves. Consumption is more self-conscious today. Consumers are going for the right stuff.”

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