WD Lab Grown Diamonds Files for Bankruptcy

WD Lab Grown Diamonds, one of the US manufacturers of lab-grown diamonds, has filed for Chapter 7 protection. On Wednesday, October 23rd, the second-largest producer of lab diamonds filed for bankruptcy in a Delaware court. 

According to court records, WD Lab Grown Diamonds has total liabilities of 44 million dollars and assets amounting to 3 million dollars, with roughly between 100 to 199 creditors. The filing for bankruptcy comes at a time when industry players are warning that the overflow of lab-grown diamonds into the market makes the business unsustainable. The natural diamond industry has faced serious competition from the man-made option that is of exact composition but far cheaper and readily available, especially in India and China.

The American manufacturer of CVD diamonds was the pioneer manufacturer to get certification under the “Standard for Sustainable Diamonds” by SCS Global Services. All looked rosy for the American Manufacturer when it posted revenue of 33 million dollars in 2022. However, the LGD industry is now shocked as the company is filing for protection being unable to pay its debts.

De Beers, one of the most respected miners of natural diamonds, recently entered the man-made diamond industry under the company Lightbox. However, company executives had warned that the industry will self-impose. Lightbox last month announced it will not continue with an earlier decision to expand its lab-grown diamond engagement ring production.

WD Lab Grown Diamonds was founded in 2008 and has been a key player in the global lab-grown diamond industry. Their main production technique is CVD, which is a process that involves using carbon vapor to grow a seed diamond into a bigger diamond with an exact composition as natural diamonds.

Indian and Chinese manufacturers have become the new market leaders in the production of lab-grown diamonds, with hundreds of labs opening up and supplying the rest of the world with cheaper and ethical diamonds. The LGD industry is now facing a tough time due to the oversupply of lab-grown diamonds in the market, leading to unsustainable business models.