Charles & Colvard Files for Bankruptcy Amidst Market Pressures

Charles & Colvard, a pioneering maker of moissanite and lab-grown diamonds, has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Eastern District of North Carolina. The Morrisville, North Carolina-based company, founded 31 years ago, cited intense competition, declining prices for lab-grown gems, and rising precious metal costs as primary factors contributing to its financial difficulties.

Financial Struggles and Market Shifts

The company reported that its annual revenues have seen a significant downturn. In 2025, revenues totaled approximately $16 million, a 27 percent decrease from $22 million in 2024 and half of the $30 million generated in 2023. Charles & Colvard has operated at a loss for the past three fiscal years and continues to do so. Executive Chairman of the Board Michael Levin stated in an affidavit that the increased saturation of companies producing lab-grown diamonds and gemstones has driven down their value. This trend, coupled with rising inflation impacting consumer spending power, has severely affected the business.

Levin also highlighted the impact of increased competition from major online retailers such as Brilliant Earth and Blue Nile, and the escalating costs of precious metals. The company has also faced other challenges, including being delisted from Nasdaq and an arbitration dispute with semiconductor manufacturer Wolfspeed Inc.

Restructuring and Future Outlook

In an effort to mitigate losses, Charles & Colvard implemented cost-cutting measures in 2025, including layoffs, renegotiating vendor contracts, consolidating its supply chain, and switching to a more cost-effective freight partner. The company also sought alternative financing in the months leading up to its bankruptcy filing but was unsuccessful.

Charles & Colvard, which began as C3 Diamante Inc. in 1995 and became Charles & Colvard Ltd. in 2000, currently employs 26 people. The company is seeking to use the Chapter 11 process to restructure its operations and position itself for long-term success. In a press release, the company assured that its business operations would continue without interruption during the restructuring period.

“Charles & Colvard has a unique brand and product line, supported by superb employees and suppliers,” Levin stated. “After thoroughly evaluating our alternatives and considering recent events and the market pressures facing our industry, the company’s board of directors decided that a court-supervised process is the best path forward to make the changes needed to ensure Charles & Colvard’s long-term success.”

According to its bankruptcy petition, Charles & Colvard has total assets of $19.2 million and $10.5 million in debt, with creditors numbering between 100 and 199.

Industry Context

The bankruptcy of Charles & Colvard occurs against a backdrop of a shifting jewelry market. While the global jewelry market is projected to grow, reaching an estimated $381 billion by 2034, individual companies are facing varied fortunes. Other businesses in the jewelry sector, including Claire's and Lugano Diamonds & Jewelry, have also filed for Chapter 11 bankruptcy in recent months. This trend underscores the challenges faced by jewelry retailers in navigating changing consumer preferences and economic conditions.