America at work
A Thriving Diamond Industry, Hiding in Plain Sight in Midtown Manhattan
Free Enterprise Staff | September 17, 2014

The story of Ritani is, in many ways, the story of American manufacturing—just not the kind you’re probably thinking of. The company, which is revolutionizing the e-commerce space, particularly for the millennial buyer, has pioneered the “clicks and bricks” model of retail that merges the online and brick and mortar worlds to drive growth.

Yet the story of Ritani can’t be told without first telling the story of the Julius Klein Group.

With its crowded sidewalks, halal food carts, maze of skyscrapers, and sea of yellow taxicabs, Midtown, Manhattan is a dream setting for anyone looking to be, well, overlooked. But if you look a little closer, you’d be surprised what’s hiding in plain sight.

Take, for instance, the neighborhood’s bustling diamond manufacturing sector.

Yes, that Manhattan—the hub of fashion, the arts, and finance—also happens to be a diamond production hub. Comprised of a full block between two prominent avenues, the borough’s Diamond District might be smaller than it was a century ago, but it still churns out a steady stream of some of the world’s most valuable and rare precious stones.

Among the biggest players in the city’s diamond trade is the Julius Klein Group. Founded midway through the 20th century, the company, whose factory and offices are located in an inauspicious pre-war building at the corner of a busy intersection, is well known within the diamond industry thanks to its staff of world-class diamond makers.

Situated behind multiple bolted doors and intimidating security guards, Julius Klein’s factory is divided into a number of discrete spaces, each of which plays a particular role in the diamond making process. Glistening, vibrant diamonds, it turns out, are not found naturally in that state in mines; rather, they’re made from rough, murky stones that can take on any matter of shapes, depending on how they’re dissected.

The Julius Klein Group excels at turning those milky globs of stone into the shimmering diamonds we instantly recognize adorning engagement rings, earrings, necklaces, and bracelets across the globe.

Like all diamond manufacturers, Julius Klein receives regular shipments of raw diamonds that are subsequently scanned and laser-cut into smaller, specialty stones during the cleaving process. The technology the company utilizes analyzes a raw diamond’s makeup—when we toured the factory, we were shown a rough, oval-shaped, 53-carat diamond—to find the optimal configuration to break it down into the familiar oval-, pear, and halo-shaped diamonds so common in jewelry store display windows and on celebrities’ fingers.

Once the smaller diamonds have been formed—either by a laser or a specialty saw— they are then put through the bruting process. Diamonds are placed on opposite-spinning axles during this stage, which gives them their round edges.

Because of its intrinsic value, the resulting diamond dust is collected and reused in the next phase of development.

The rounded diamonds then make their way to the polishing stage, when they’re placed on a machine that spins at an exceedingly high velocity, giving them their glowing, luminous form. To achieve that enviable appearance, the polishing instrument is coated in the diamond debris.

At Julius Klein, a team of diamond polishers—including one employee who has specially made diamonds worth upward of $20 million for mega-celebrities and is known in the industry as the “Michael Jordan” of diamond makers—is tasked with overseeing this final segment of the diamond making process. Though each phase of development is undeniably important, an expert polisher can take an otherwise mundane, lackluster piece of carbon and transform it into a sparkling, arresting diamond.

Yet Julius Klein does more than just create intricate diamonds; it also sells them through Ritani, a wholesale jewelry maker and designer that it owned outright until 2012, when Cantor Ventures led an investment round that raised $15 million. Still a part owner, Julius Klein supplies Ritani with the diamonds that it sells through its revamped website, which mixes the e-commerce and brick and mortar worlds to create an altogether new kind of shopping experience.

Be sure to check out our follow-up piece, which centers on how Ritani is revolutionizing the way people shop both online and in person.