A new short report from The Bear Cave, published around January 30, 2025, targeted Signet Jewelers, asserting that lab-grown diamonds will increasingly erode the company's market share. The report posits that younger generations will favor lab-grown diamond engagement rings, leading to a substantial devaluation in both mined and lab-grown diamond prices.
The report highlights that this shift could significantly impact Signet's business, particularly given its approximately $2 billion in inventory on its balance sheet. A decline in diamond prices would directly affect the value of this inventory, posing a financial risk to the company.
Furthermore, the short report suggests that the growth of lab-grown diamonds could lead to less frequent purchases of Signet’s extended service agreements. These agreements are described as high-margin revenue drivers, and their decline would negatively affect Signet's profitability.
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