STORY BY CATHLEEN McCARTHY | Published in the August 2014 issue

Location: Oak Park, IL
URL: gemjewelryboutique.com
Founded: 2004
Opened Featured Location: 2010
Full-time employees: 1
Part-time employees: 4
Area: 1,400 square feet
Buildout Cost: $10,000
Top Brands: Laura Kitsos, Becky Kelso, Jeanine Payer, Swallow, Suzan Rezac, Ruth Tomlinson, Ila & I, Megan Thorne, Kothari.
Online presence: 4.5 Stars on Yelp; 745 Facebook Likes; Alexa global rank: 3.97 million

Laura Kitsos was born in Germany and spent a lot of time exploring the studio-shops of goldsmiths in that part of Europe. When she decided to open her own shop 10 years ago in Oak Park, a suburb outside Chicago, she used those European artisan shops as a model.

The first Gem Jewelry Boutique was an intimate, sky-blue jewel box where you could find Kitsos hammering away at her bench in the back. She made 90 percent of her merchandise in those days — and there wasn't much on display.

After early mentions in Daily Candy and Crain's, business picked up and she began supplementing her delicate designs with bolder pieces by emerging designers and artisan jewelers. While her own jewelry still makes up 10 to 30 percent of her merchandise, buying has proven to be her strong suit.

Still, Kitsos struggles to find the balance between prudence and necessary risk. "Over-extending is scary," she says, "but being overly cautious can hurt you even more." Overspending at her first tradeshow, for example, led to unexpected successes, like introducing British designer Ruth Tomlinson before anyone in the area had heard of her. "Buying is an art," she says.

ROLLER-COASTER RIDE

Just a year after opening, retail space became available in the Chicago neighborhood known as Bucktown, and she took on a second store. Bucktown offered a cluster of woman-owned boutiques well off the beaten path, and rent was cheap. But a few months later, Marc Jacobs leased the shop next door. Suddenly, Kitsos found herself at the heart of the city's hottest new shopping destination. She closed the original shop to focus on meeting the demands of a younger, hipper, big-spending customer base.

TRY THIS

"My top salesgirl is very creative, but sometimes I sense she wants to do more, so I asked her to take over our blog and infuse it with her personality. She's really excited about it.".

STRONG PROMO

Rewarding loyalty is a big part of the store's marketing as it matures.

TRY THIS

Hire customers. "Several of our employees are former customers. They love the jewelry and know how to wear it, which is key to selling."

PLAYLIST

Jazz, blues, contemporary but no pop. "We go from style to style, Tom Waits to John Coltrane to Wilco." Typical lineup: Rhye, The Fall; Billie Holiday, Strange Fruit; Howlin' Wolf, Spoonful; Lorde, Tennis Court; Bon Iver, Stacks; Bill Withers, Use Me

HEARSAY

"I love to come here. I get inspired looking at your displays. They are so creative!"

In 2007, Vogue magazine named Gem "the No. 1 place to buy unusual engagement rings in Chicago" and the shop began selling rings hand over fist. In October 2010, while finalizing a new lease — rents in the neighborhood had tripled since she moved in — she saw a press release announcing a national jeweler was moving into Bucktown. The address listed was hers.

Kitsos found herself without a shop, just as she was gearing up for holiday season. Heartbroken and terrified of bankruptcy, she returned to Oak Park, leased a 1,400-square-foot space and renovated it in three weeks. She opened her new shop the day before Thanksgiving.

Her current shop is nearly twice the size of the original and a far cry from its innocent "girl's bedroom" look. Today's Gem sports exposed brick walls and pipes, funky mismatched cases, more along the lines of Anthropologie than a Tiffany window. Two of her freestanding steel cases were trash-picked from an alley, others include Boy Scout and deco-era cases, all of which she left rough. The shop's "edgy sophistication," as one customer described it, reflects the owner's own journey from innocence. "The store is always clean but there is grit to it that offsets the jewelry," she says. "My first shop was very sweet but it was not sophisticated."

MIDWEST CUSTOMERS

Gem Jewelry Boutique specializes in unique jewelry that dresses up or down, versatility that appeals to its customers. "I'd say 90 percent of the jewelry we sell you could wear night or day and every day," Kitsos says. "This is the Midwest. People are frugal here. They want to make sure they're spending on something they'll get some use out of. A lot of people will want to put in a new kitchen rather than buy a piece of jewelry."

In Bucktown, the shop attracted tourists on a shopping binge. In suburban Oak Park, however, they are usually not in a New York state of mind. "A lot of designers will say, 'Oh, you have to tell them this is what Jennifer Aniston wears.' Y'know, in Chicago, it doesn't matter what Jennifer Aniston wears," Kitsos says. "We're not New York, we're not LA. We don't sell jewelry based on star power. That doesn't fly here."

What does fly? "People have to fall in love with a piece and not be able to get it out of their heads. That may take a couple rounds," Kitsos says. "But we sell one-of-a-kind here. What happens a lot is they come back, it's not here, and they get upset. So we have to warn customers that may happen in a way that doesn't sound pushy. We'll hold things for a couple hours, but when people put things on hold, it usually means they're not ready."

MOVING ON

Worst fallout from the unexpected relocation was losing her engagement-ring customer. In Bucktown, weekends brought a lot of people from out of town, but Oak Park is a more established area. "People here are already married, own homes, have kids," Kitsos says. "They have more money but they don't need engagement rings. So I pulled back a little on that, added other kinds of jewelry like necklaces and bracelets, and expanded to add home furnishings because my space is so big. Everybody always asked me to sell them my displays, I thought this was an opportunity to do that."

Her current location is more along the lines of ABC Carpet in New York City, she says. "There's great handmade artisan jewelry on the first floor of that store — we carry a lot of the same designers — but you can buy other things as well and everything fits together," Kitsos says. "Gem is still 85 percent jewelry, but we now have clothing, handbags, cards and gift items — fun, funky things. It's becoming more of a lifestyle boutique."

She hasn't signed off on engagement rings, however. At the recent Vegas shows, she found herself picking up some ring designers she used to carry. "I know from experience that if you have it, you can get people to come to you," Kitsos says. "I just need to not be afraid of it."



WHAT THE JUDGES SAY

Danielle Miele: My favorite aspect about this store is that I would most definitely wear everything in it! It is hip and trendy, and several featured designers are incredibly unique. I think when customers purchase something from Gem, they really feel like they own something special.

Leslie McGwire: The emotions when entering Gem are an eclectic boutique feeling. The multicolored brown wood floor is beautiful with the large brick wall. The iron cases complement the other display racks in the store. The placement of the artistic iron cases makes them the focal point of the jewelry displays.

T Lee: I love the eclectic mix of vintage displays and edgy modern and quirky/odd combos, it feels like a curated curio shop with an industrial groove that is translated through the jewelry Laura chooses. I'm not usually a fan of mixing accessories and home goods with fine jewelry but she does so with such a discerning eye that it feels like she is the personal shopper for a specific client ... her client, which she knows well.

Andrew McQuilken: The space feels feminine, eclectic and very personal, much like Anthropologie. Everywhere you turn is a different vista unique to itself but complementary to the other elements around it. Understated and sublime, if it was a restaurant I could eat here every day.

Cindy Edelstein: I love the eclectic merchandise mix that gives the customer a full lifestyle approach, and the jewelry becomes part of the whole.

1. LOYALTY CARDS. To celebrate the store's 10th anniversary, Kitsos threw a party in the store and invited her most loyal customers, promising an incentive to anyone who purchased something. It turned out to be a loyalty card good for 10 percent off any purchase, first notice when new product comes in, and extra discounts during sales.

The cards were not designed to create new customers, but to reward existing ones. "It's a way of thanking the people who have kept us alive," she says. "I always gave them a discount anyway, but now it's guaranteed." Sales have noticeably increased among those customers.

2. PARTNERING LOCALLY.Gem recently teamed up with one of those loyal customers, a yoga instructor, to host a small candlelight yoga class in the boutique followed by a shopping event. "The shop is the perfect space for that because it's so large and we can push cases aside," Kitsos says. She's considering events with other local businesses.

3. CHALKBORAD QUOTES. Every day, a new quote goes up on a chalkboard out front, sometimes announcing a new shipment but usually something inspirational. "Customers sometimes tell us, 'I saw that quote and it made me feel so good, I had to come in,'" Kitsos says. The chalkboard was such a hit, nearby shops have started putting up their own.

4. OFF-THE-BODY SALES. Kitsos lets sales staff dress however they want, as long as they wear the shop's jewelry. Her own engagement ring by Satomi Kawakita has led to significant ring sales. "When people identify with someone, they want what they're wearing," she says. "One girl who works here has an amazing sense of style, she sells pieces off her neck all day long. She only wears pieces she loves, so she's passionate about them."

5. VISUAL SOCIAL MEDIA. Chalkboard quotes originated with inspirational quotes Kitsos was pinning on her personal Pinterest account. Now she has a Pinboard titled "For the Board," viewable by her staff. Most fruitful social media for the shop, however, is Facebook, followed by Instagram. Pinterest comes in at No. 3.