Online retail giant doesn't normally call out the competition by name. In the online jewelry category, though, its actions speak...

Share story

Online retail giant doesn’t normally call out the competition by name.

In the online jewelry category, though, its actions speak for it.

Amazon yesterday said it added loose diamonds to its nascent jewelry store and introduced technology that allows customers to search for diamonds based on various traits, including shape, carat, color and price.

Most Read Stories

Unlimited Digital Access. $1 for 4 weeks.

Although loose diamonds have been available on Amazon’s site since late January, it announced the addition on the same day Seattle-based online jeweler Blue Nile reported first-quarter financial results.

The last time Amazon highlighted its jewelry category with a news release was Feb. 8 — the same day Blue Nile reported its quarterly results.

“Amazon wants to be a very direct competitor to Blue Nile — that much is clear,” said American Technology Research analyst Mark Mahaney. “How successful they’re going to be, I don’t know.”

Amazon’s announcement didn’t move its competitor’s stock. Blue Nile shares rose 45 cents yesterday to close at $25.49, and dipped 49 cents in after-hours trading.

The company announced its quarterly earnings after the markets closed.

Blue Nile, which built its business marketing high-end engagement rings to men, said its first-quarter profit rose 36.7 percent to $2.6 million, or 14 cents per share, slightly beating Wall Street estimates.

Sales were up 23.3 percent to $44.1 million.

Both Amazon and Blue Nile offer diamond jewelry at prices far below the industry average due to lower overhead expenses (neither pays for retail space) and less inventory. (Neither has to carry multiple copies of the same item, like multistore chains.)

While Blue Nile sells items priced as low as $35, its average order size is $1,415. Amazon doesn’t give details on its jewelry sales, though it said its online jewelry store saw triple-digit sales growth during the first quarter.

While Amazon sells high-end diamonds on its site, it features a range of other jewelry products as well. The company, in its February announcement, highlighted the best-selling Paris Hilton-branded crystal heart belly bar, which sells for $15. Its best-selling jewelry item yesterday was a $2.99 amethyst peridot citrine crystal-chip bracelet.

Blue Nile Chief Executive Mark Vadon said Amazon has been selling loose diamonds since earlier this year, but his company hasn’t felt much of an impact from it. He said more competition means more consumer awareness about buying jewelry online.

“We’ve obviously created a good business with attractive economics,” Vadon said. “We’re going to have competition.”

Monica Soto Ouchi: 206-515-5632

Blue Nile’s results
Dollar figures in millions.
March 31 %
1st QTR 2005 2004 CHG
Profit $2,602 $1,904 36.7
Per share 0.14 0.12 16.7
Sales 44,116 35,784 23.3