LVMH invests in lab-grown diamond company Lusix

Dive Brief:

Showing confidence in the disruption of the fine jewelry industry, LVMH Luxury Ventures, along with Ragnar Crossover Fund, More Investments and others, invested $90 million in Lusix, a lab-grown diamond company, according to a Friday press release shared with Retail Dive.
Lusix said it will use the funds to build a second solar-powered production facility, which will start production this summer, per the press release.
Opening its second facility will allow the company to meet the demand for lab-grown diamonds from its current clients and the overall industry, according to the announcement.

Dive Insight:

Spun off from Landa Labs and founded in 2016, Lusix has since grown to roughly 150 employees, including chemists, physicists, materials scientists and other staffers. The company now manufactures between 1- and 5-carat diamonds, according to the company’s website.

“We are thrilled and proud to welcome such high-profile investors, most notably LVMH Luxury Ventures, bringing their financial support and valuable industry insights,” Benny Landa, Lusix founder and chairman, said in a statement. “Their help will contribute greatly to our company’s success while the implications of this investment, both for Lusix and for the lab-grown diamond segment, are profound – and so exciting!”

Over the past year, the diamond industry has seen an unprecedented increase in consumer lab-grown diamond interest. Diamond industry analyst Edahn Golan told CNN that March 2022 data showed a 63% increase compared to last year for the number of engagement rings sold featuring a lab-grown diamond. The Russian invasion of Ukraine has had a large impact on diamond sourcing and pricing due to sanctions on Russia – one of the industry’s largest suppliers of natural diamonds – according to news reports from Bloomberg and Vogue.

During an analyst call in April, LVMH CFO Jean-Jacques Guiony said “(w)e are currently working on replacing sourcing from Russia, from other locations, and it's perfectly doable in a reasonably short time frame,” according to a Seeking Alpha transcript.

In addition to Lusix, another significant investment LVMH has made within the category was in the iconic jewelry brand Tiffany & Co. The luxury fashion conglomerate bought the jewelry company in 2020 for about $15.8 billion. The final purchase price was $400 million less than the previously agreed-upon price of $16.2 billion.

Besides jewelry companies, LVMH also has infused its capital into emerging fashion, tech and skincare companies. In July 2021, LVMH announced plans to acquire a majority stake in Off-White, the brand founded by the late designer Virgil Abloh. Earlier this year, the company bought a minority stake in streetwear brand Aimé Leon Dore for approximately $2.3 million. LVMH Luxury Ventures also has the watch platform Hodinkee, the social selling platform Replika and the skincare brand Versed in its portfolio, according to its website.