Brexit leaves luxury London diamond maker fearing the future

Tobias Kormind always had a keen eye for detail and loved art and architecture. Whilst hob-knobbing with the super rich in Cannes with his wife, the former banker-turned-online marketer says he fell in love with the idea of making hand-crafted diamonds.

Building on his experience of creating online stores for American beauty brand Estee Lauder, he blended both his passion and marketing career by co-founding an online-only diamond store in 2005.

He’s now spearheading 77Diamonds in the heart of Mayfair, employing British craftsmen and women who produce and sell more than 50 bespoke diamonds and pieces of jewellery a day in a workshop hidden away under London’s streets.

The company is named after the year 1477, when Archduke Maximilian I proposed to Mary of Burgundy with the first recorded diamond engagement ring. Turnover reached £18m in 2015.

But Brexit gloom is lingering on the horizon for Kormind’s diamond venture. Britain’s exit from the EU will drive profit margins down as the cost of manufacturing soars, he says. A hard-Brexit will almost certainly scupper the investment he’s made in using British-only craftsmen and apprentices to craft diamonds for the wealthy.

Kormind warns that Brexit, because of the associated fall in the pound, could make it more expensive to buy precious stones abroad with money generated in the UK. That, in turn, could force him to shift his central London workshops to the continent.

The Dane hopes for a “sensible” outcome to Brexit and says he would “hate to relocate”. But he does say that servicing an international community means he could “relocate with ease”.

With just a handful of employees and no traditional store, the founder and chief executive of 77Diamonds says he is expecting a turnover of £25m this year.

Unlike traditional jewellery stores in which customers can buy an already-made diamond rings or necklace, 77Diamonds’ customers place their order without seeing the finished product.

Customers request an ideal look, texture and weight for their bespoke purchase. Kormind says clients are free to be as detailed as possible when it ordering their bespoke diamond and jewellery requests – even choosing the diamond’s country of origin.

“If you choose a diamond sourced from Canada and want a maple leaf inscribed [on it], then sure, you can have it”, he says.

Making an order from 77Diamonds requires a lot of research into precise details and planning by the customers. “It’s a safe experience, with no pressured sales people, and you can do research all the while”, Kormind said. One buyer spent £120,000 on a ring without seeing it first.

All of the diamond cutting and jewellery production happens within the UK, either in London or Birmingham, using traditional techniques and tools in a workshop tightly packed and full of hammers, chisels and tongs.

Kormind takes pride in his all-British workshop. Staff range from grey-haired seniors to apprentices fresh out of college.

Clutching at a minuscule diamond, 64-year-old workshop leader Stephen Bernard recalls the time he was commissioned to make diamond earrings for the late Princess Diana. She had wanted them to match her necklace consisting of 178 diamonds and pearls, he says.

The necklace was worn on one of her final public engagements, watching a performance of Swan Lake, but the princess never got to see Stephen’s diamond earrings.

Just weeks later, in August 1997, she died.

Although he doesn’t want to reveal any specific names, Kormind says his venture is particularly attracting young and wealthy clients from across the world, all aspiring to buy into a “British brand”.

He says affluent customers in a globalised economy want hand-crafted jewellery more than ever before and love any products that are associated with a “London lifestyle”. But not everyone goes for the same type of diamonds.

“China has changed a lot – elite tastes have trickled through into the middle class”. Americans pay little attention to quality and want “diamonds as big as possible”, whilst Europeans make much more “quality-based decisions”.

Kormind likes to see himself as bucking a trend that’s seen other retailers produce cheaper, mass-marketed diamonds stamped with UK craftsmanship. He says that traditional techniques and expert craftsmanship are key to 77Diamonds and the industry as a whole if it is to survive – and that’s why diamonds work best as tailored, high-end products, he says.

Perhaps most strikingly, the 77Diamonds founder thinks that millennials are the type of consumers especially willing to pay more for hand-crafted diamonds made in UK workshops.

Diamonds are still associated with traditional engagement rings, at least partly thanks to De Beers’ campaign in the 1930s. And they can still hold their own as a prized gift, especially as young people are increasingly waiting longer to get married, when they’re likely to have more disposable income.

“Once we have food and shelter, jewellery and diamonds are the next couple of things that come on the must have list”, Kormind says. “There’s something mystical about diamonds, almost like putting on a good suit”.