By CultureBanx Team
- Louis Vuitton is stepping into the luxury jewelry market by scooping up the world’s second largest diamond
- A big change in the culture surrounding hip hop jewelry are the stones being flaunted
Louis Vuitton is stepping into the luxury jewelry market by scooping up the world’s second largest diamond, Sewelô, giving the hip hop community another reason to spend money with the brand. Jewelry has primarily symbolized one thing since the very beginning of time and that’s clout or status. Since the luxury jewelry market is estimated to reach $30 billion in 2020, there’s a lot of money for Louis Vuitton’s parent company LVMH Moet Hennessy (LVMUY -1.17%) to tap into.
Why This Matters: Jewelry has been a sign of opulence and importance for thousands of years, outlasting empires and helping to define new ones. Then hip hop came along and took it to a whole other level. When you combine luxury bling with a top brand and mix in hip hop culture, this is most likely going to become extremely successful for LVMH that brought in €38.4 billion ($41.8 billion) in revenues during the first nine months of 2019.
Entertainers have put a big emphasis on the quality of the stones being set in rings, pendants and chains, which can now be set in with an LV logo
A big change in the culture surrounding hip hop jewelry are the stones being flaunted. This is where Louis Vuitton can have a huge impact with its 1,758-carat rough diamond, which was recovered by Lucara Diamond Corp in Botswana last April. Entertainers have put a big emphasis on the quality of the stones being set in rings, pendants and chains, which can now also be set with an LV logo.
A recent McKinsey Report found that in the past, most of the growth in branded jewelry came from the expansion of established jewelry brands, such as Cartier and Tiffany & Co (TIF +0.06%). They also noted that “future growth in branded jewelry is likely to come from non-jewelry players in adjacent categories such as high-end apparel or leather goods—companies like Dior, Hermès, and Louis Vuitton—introducing jewelry collections or expanding their assortment.”
What’s Next: Lucara has now “entered into a collaboration” with Louis Vuitton to polish and manufacture a number of smaller jewels from the Sewelô diamond. Even though the two companies didn’t disclose the value of the agreement, Lucara is going to receive an up-front payment, and keep a 50% stake in the diamonds produced from the uncut stone. They will also be investing 5% of their sales back into Lucara’s community initiatives in Botswana.
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