A diamond is no longer forever. It’s until you get sick of it, list it for sale online, and buy another one.
Modern expectations for engagement rings have proven more fluid than the future heirlooms sought by earlier generations. Just like virtually every other purchase, diamond rings frequently change hands online, far from a loupe-holding jeweler. It’s still a shaky time for the diamond industry, but the ring market on EBay has grown 58 percent over the last five years, and digital jewelry consignment has become safer and more popular.
This moment of transition makes it particularly interesting to note what happened on Monday to the longtime pioneer in online diamond sales. Blue Nile Inc., which began selling diamonds online in 1999 and went public in 2004, canceled its third-quarter earnings call to announce instead an agreement to be acquired by Bain Capital Private Equity and Bow Street LLC. The all-cash deal values the diamond seller at about $500 million, about 34 percent over Blue Nile’s Friday afternoon closing price.
The deal announcement comes at an uncertain time for the future of engagement rings, a purchase that has come under pressure, in part, from the shift by millennial shoppers. The 18-to-35 demographic is marrying older than the Gen Xers and Baby Boomers who cemented the link between diamonds and matrimony.
Millennials, famously, have less to spend in their twenties than prior generations did, due to mounting student debt and having entered the job market in the wake of the financial crisis. The average cost of an engagement ring in the U.S. is close to $6,000.
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