‘I see us very much as building the modern version of Tiffany’s,’ Tobias Kormind tells MT when we meet at his company’s Mayfair showroom. ‘I want 77 Diamonds to be a luxury brand that people aspire to and that is known all over the world.’
It’s a bold aim, to say the least, but Kormind has certainly set off on the right foot. His business, which sells jewellery primarily over the internet, was launched just 10 years ago but turned over £18m in 2015, a figure he expects to reach £25m (including VAT) this year. And unlike many fast-growing ecommerce companies, it’s turning a profit too.
‘If someone asked me if I would end up in diamonds I would have laughed loud, I never would have imagined it,’ he says. The Danish law grad spent some time working in banking before leaving to help restructure the online trading platform Interactive Investor. Then he launched his first business, a digital marketing agency, before founding 77 Diamonds (named after 1477, the year Holy Roman Emperor Archduke Maximilian purportedly gave the first ever diamond engagement ring).
Kormind’s sister had married into a family of diamond traders. ‘Since I was in my late teens I’d be going to their offices and be tested on grading diamonds and so on - it was a hobby,’ he says. People told him it was crazy to try to sell diamond jewellery online – it’s hard to convey a sparkle with a JPEG, after all.
But in 2009, after linking up with his business partner Vadim Weinig (a fourth generation diamond dealer), he decided to focus on the business full-time. Projected turnover for that year was £1m. ‘We did £2.4m ex-VAT. We literally couldn’t handle the volume. Part of the reason is we were very price-led and there was clearly a huge demand for that because the market has been very opaque.’
Kormind says there are several factors to getting customers to trust you online. ‘We get lots of referrals, that helps tremendously. We’ve got a few people out there banging the drum and they keep sending people in. Then to have good press and industry awards that brings a whole different level of trust.’
There are clear advantages to buying online. The company’s website lets customers choose a style and type of metal for the ring itself and select a stone based on several criteria from colour and clarity to shape. Prices range from a few hundred pounds to more than £3m.
77 Diamonds sources its stones directly from the diamond cutters - ‘that allows us to bypass the markets in Antwerp, New York and Hong Kong,’ says Kormind. Combined with lower marketing and retail costs that allows it to undercut the competition by ‘up to 71%.’
But there’s still value in bricks and mortar. ‘We realised that the biggest opportunity isn’t to pile them high and sell them cheap and commoditise diamonds, but actually the whole experience. It’s an emotional purchase. With engagement rings, our core product, people put their heart and soul into the purchase itself because they are expressing emotions through a diamond.’
So the company opened the plush showroom in which we’re sitting, where visitors (by appointment only) can see and touch the rocks they’re planning to shell out on. It’s a short walk yet a world away from where the jewellery is made. Down the road in a shabby room behind a discrete door (with a nudey calendar on it) above a chain restaurant, the company’s craftsmen toil away, refining the metal bands and setting stones in them. ‘We poached people from Boodles, people who worked on the Cartier brand and de Beers,’ says Kormind. ‘We’re very proud to be manufacturing here and helping to keep the trade alive.’
The company already sells online to more than 70 countries and the plan now is to roll out more physical showrooms across Europe. Sales have ballooned since the opening of the first showroom but the entrepreneur says his attitude to expansion has actually been pretty conservative. ‘I think we’ve grown slower than we could have,’ he says. ‘A lot of entrepreneurs go in there, raise a lot of money and then just blow it all. We’re much more financially disciplined and that should stand us in good stead.’