The second-largest US producer of lab-grown diamonds has filed for bankruptcy amid a massive glut of fabricated gemstones and plunging prices.
Financial Times reports that Washington-based WD Lab Grown Diamonds filed for Chapter 7 in a Delaware bankruptcy court and had total liabilities of around $44 million and assets of $3 million. The company listed it had between 100 and 199 creditors.
In 2020, WD Lab Grown Diamonds became the first diamond company to be certified under the "Standard for Sustainable Diamonds" by third-party verifier SCS Global Services. Operations began in 2008 and have played a pivotal role in innovating the lab-grown diamond industry, generating roughly $33 million in revenue last year.
Paul Zimnisky, an independent diamond analyst, said the collapse of WD Lab Grown Diamonds is a sign it struggled to compete with Chinese and Indian producers.
In the last seven years, a single-carat lab-grown diamond has plunged more than threefold due to a flood of supply, a massive relief for mining companies who have seen natural diamond prices crash.
Real diamond prices
The slide in real diamond prices comes as consumers pivot to cheaper lab-grown stones. Also, there's an ongoing global luxury spending slowdown as recession risks rise.
As for the lab-grown diamond industry, it's a race to the bottom as more supply only pushes prices lower, slashes margins, and ultimately results in business failures.
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