Tobias Kormind, cofounder and managing director of 77 Diamonds, explained how the UK-based company had taken hybrid retail to Europe and the Middle East and why its business model was more sustainable than Blue Nile’s.
The online jeweler offers consumers customized engagement rings and other pieces, which it sells on its website and at showrooms in markets including the UK, Germany, Switzerland and Dubai.
Kormind and cofounder Vadim Weinig saw an “immediate demand” for made-to-order jewelry when they launched the business in 2005, Kormind said on episode 128 of the Rapaport Diamond Podcast.
In the company’s early days, consumers were just cottoning on to the fact that there were ways of buying jewelry other than off the shelves at traditional stores. “It was a lot of early technology adopters that became our customers, but eventually, as the internet has grown and become part of our every day, people realize that choice is almost a consumer right these days.”
In contrast to Blue Nile, however, 77 Diamonds does not put price as its key selling point. Blue Nile, he argued, “created” the jewelry e-commerce market but also “destroyed” it by prioritizing volume over service. This, he claimed, led to Blue Nile’s share price plummeting and its eventual sale to Signet Jewelers in 2022.
“They put a huge [number] of companies out of business, mom-and-pop shops all across the US, mainly,” he said on the episode, recorded in early November.
Kormind also outlined the respective advantages of online and physical retail, why he’s planning to launch a showroom in Scotland but not in the US, and why he’s been selling diamonds with European Gemological Laboratory (EGL) reports.
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