The De Beers Group spent more on marketing than it received back in profits last year.
In 2019, the diamond giant invested $178 million (£138m) in marketing – the highest it has been in a decade – to help drive consumer demand.
During the year, however, De Beers posted its worst set of earnings since miner, Anglo American, bought it in 2012.
The issue doesn’t so much seem to be global consumer demand, which measured in US dollars was broadly flat during the period, but rather a set of other ongoing challenges.
Underlying earnings fell by over 80% last year to $47m (£36m) as the average price for its diamonds dropped by a fifth.
Revenue declined by 24% to $4.6bn (£3.5bn), with rough diamond sales falling by 26% to $4.0 billion (£3bn).
The company has been hit by protests in Hong Kong as well as an oversupply in the pipeline. In addition it is grappling with the rise of lab-grown diamonds.
De Beers also said demand for rough diamonds from polishers and cutters was weak last year due to the impact of US-China trade tension and the closure of US retail outlets. Tighter financing also affected the midstream’s ability to hold stock, all of which resulted in lower demand for rough diamonds, it said.
“I’m actually very proud about what De Beers did in 2019,” says De Beers chief executive officer, Bruce Cleaver. “It was not an easy year. We led an industry. We spent a lot of time speaking to customers, to bankers and to retailers to give them confidence that De Beers thinks there’s a great future here.”
During the year De Beers Jewellers continued to upgrade and expand its retail network, as well as integrating its online and store presence into an improved combined offering.
Forevermark continued to grow its presence and sales worldwide. It is now available in around 2,500 retail outlets globally, with the brand being launched in Italy, Austria and Belgium during 2019. Dedicated Forevermark-only stores are now operating in China, the US and India.