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Well, Don't You Know; Internet Diamond Retailer Diamond.com Goes Belly Up.
Diamond.com, one of the first and very heavily financed Internet Diamond and Jewelry websites today announced that they are officially out of business.
Diamond.com's parent company, Odimo Incorporated (Nasdaq: ODMO - News), an online retailer, today announced that Ice.com ("Ice"), an online retailer of diamonds and jewelry, has purchased from Odimo certain specified assets comprising Odimo's diamond and jewelry business, including all of Odimo's rights to the domain name www.diamond.com, and related trademarks, copyrights, product images and other intangibles in exchange for $7.5 million. Additionally, Ice purchased the Company's remaining diamond and jewelry inventory and corporate packaging for an additional $2.0 million.
Diamond.com's diamond database consisted of "Virtual Diamonds" (VD) which were not owned or housed by Diamond.com but were instead directly drop-shipped to the customer by the wholesaler-manufacturer. Little if any information regarding the diamond's Cut Quality, Light Performance, or Photos were provided. Consumers literally bought 'blind'. We've blogged on this topic several times, for example HERE: "Virtual Diamonds"
With the increasing growth of the Internet and the rapid dissemination of information, consumers are becoming more knowledgeable, savvy, and demanding of detailed information on the diamonds they are considering for purchase. The diamond websites that know their diamonds, have them in-house, and have the technology to showcase and display their attributes are garnering the confidence of consumers and making the sales.
It's interesting to note that Virtual Diamond Internet drop-ship retailer Bluenile(NASDAQ: NILE), currently the biggest diamond e-commerce website has reported lower profits over the past two quarters. First Quarter 2006 profits were down 9% even though they lowered their diamond prices.
Looks like the shakeout has begun. Good morning, Mr. Darwin.
