Leibish Polnauer, President & Founder of Leibish Jewelry said, LGD’s Magnificent Downfall! Lusix, a pioneer in the rough lab-grown diamond (LGD) manufacturing sector, was founded in 2016 by Israeli entrepreneur Benny Landa, who had previously sold his digital printing company for $830 million.

Today, Lusix and its so-called Sun Grown Diamond brand are facing a severe financial crisis. Lusix’s downfall is largely due to the plummeting prices of raw lab-grown diamonds, which have dropped from their previous high of $300 to a recent low of $30 per carat.

Without a substantial cash injection, Lusix has stated it will become insolvent. The company has cut a significant portion of its workforce, implementing unpaid layoffs while temporarily shuttering its production plant.

Hoping Against Hope! Once a leader in the field, Lusix promoted itself as the producer of Sun Grown Diamonds. Now, with its insolvency, Lusix’s downfall highlights the magnitude of its miscalculation about the LGD industry.

Big Players. In 2020, Lusix raised nearly $100 million. A key investor, LVMH (Moët Hennessy Louis Vuitton), is said to have contributed only $1 million. However, the association with LVMH gave other potential investors the false impression that LGDs were being embraced by all luxury brands. That investment was spearheaded by Frédéric Arnault, the son of Bernard Arnault, Chairman of LVMH.

Frédéric became CEO of Tag Heuer at age 27 in 2020 but has since been succeeded by Julien Tornare. LVMH did not introduce LGDs to the conglomerate’s other brands, and the once-promising story of LGDs has now been unceremoniously buried, resulting in a $100 million loss for Lusix investors.

Then the Truth Came Out! Initially, the music hadn’t yet stopped. Jewelers made astronomical profits selling LGDs while simultaneously undermining their bread-and-butter item — the natural diamond. But the reality of LGDs’ worth, or lack thereof, caught up quickly within the luxury sector. In just two short years, LGD prices deflated by a staggering 90%.

The watch industry did not embrace the LGD trend once consumers realized these man-made stones were simply worthless imitations. Luxury goods consumers only want the real deal. Now, you tell me, what happened next?