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America's Coolest Stores

ACS 2007: Seventh Place (Tie), Borsheims Fine Jewelry & Gifts

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Crystal Clear: Big money aside, borsheims stays cool by doing small things right.

Borsheims Fine Jewelry & Gifts

Location: Omaha, NE
URL: www.borsheims.com
Owner: Berkshire Hathaway Inc.
Year founded: 1870
Opened featured location: 1986 (Remodeled 2006)
Store area: 62,500 square feet
Employees: approximately 350 (240 full, part-time, about 100 seasonal/reserve)
Architect/design firm: HDR
Slogan: “If you don’t know jewelry, know your jeweler.” — Warren Buffett

STORE FACTS

At 62,500 square feet, it is one of the largest independent stores in the country — large enough in acreage to grow 250 bushels of corn. 6The 8-foot-by-20-foot artwork in the atrium is changed every few months.?It is currently showcasing microphotographs of gemstones taken by John Koivula.

Nearly a quarter of Borsheims’ 350 employees have been with the company for more than 10 years.

40 percent of Borsheims’ cusotmers live outside Nebraska.

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HOW THEY GOT THERE

It Isn’t Just the Money: Warren Buffett’s cash didn’t make Borsheims cool. This store was a winner long before that.

Asking the ceo of a jewelry store owned by Warren Buffett’s Berkshire Hathaway Inc. how it became so big and successful is akin to asking a wealthy man the secret to becoming rich and he tells you: “First, you make a million dollars.” Mom-and-pop store owners out there may be rolling their eyes when they see that Borsheims in Omaha, NE, the behemoth 62,500-square-foot store with an inventory of 100,000 items was named one of “America’s Coolest Stores”: well, of course it’s going to be a cool store. Most stores would kill for its client list of Berkshire Hathaway shareholders alone.

But, you know, if you were to think that way, you’d be wrong. Borsheims president and CEO Susan Jacques points out that Warren Buffett wouldn’t be Warren Buffett if he didn’t buy businesses that are already successful and sustainable.

Long before Berkshire Hathaway came into the picture, Borsheims began as a general store in 1870. Swedish immigrant Louis Borsheim and his descendents turned that little business into a chain of four Omaha jewelry stores by 1947, when it was bought up by Louis Friedman. It was Friedman and his son Ike — and his son, Alan, a designer now known as “The King of Pinks” with a store in Beverly Hills — who turned Borsheims into first an 8,000-square-foot single store and later a nearly 30,000-square-foot store that was attractive enough in 1989 for Berkshire Hathaway to purchase a majority stake.

Jacques says the store’s success to that point was due mainly to the management style of Ike Friedman: “He might not always remember a customer’s name, but, boy, he could remember the pieces of jewelry he sold them.”

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It’s that same attention to customers that has seen Borsheims continue to succeed.

“How we’ve managed to grow our business is managing and marketing to out current client base,” Jacques says. This intense focus on fostering long-term relationships keeps marketing costs low and contributes to a low operating-expense-to-sales ratio. (Jacques says it’s about 20 percent.)

Maintaining such a figure can mean putting money back into the store and planning for the next 20 years, as Borsheims did in its 2006 remodel.

“It was time for an update and a fresh, new look,” Jacques says, “but we honestly didn’t want to spend the money.”

It’s a dilemma that a store of any size faces, but Jacques says they determined they simply could not sustain long-term growth without making the investment. While it was a complete remodel, they targeted their watch, bridal and luxury departments as both areas of growth and sustainability.

“Engagement is the No. 1 replenishing customer base that we have,” Jacques says. So the engagement rings moved to the front of the store, “so that a young guy who walks in in shorts and flip-flops wouldn’t be intimidated.”

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At the same time, the luxury department was repositioned to allow for more discretion. “The difficult thing is being everything to everybody,” Jacques says. “You want a customer who’s buying a $100,000 necklace to feel equally as comfortable as that guy in flip-flops.”

Borsheims still is facing what Jacques says is the greatest challenge to all independent retailers: the Internet. “We want to go head-to-head with the Blue Niles,” Jacques says. And she believes the way to do that is through the added value of customer service. “We know the personal service we offer exceeds the value they’re going to get at online stores.”

Because of its volume, the store is able to offer prices close to the online diamond giant, and Borsheims has recently expanded its website to offer a live inventory in partnership with its diamond suppliers. Additionally, the store has partnered its bridal registry with www.weddingchannel.com.

That last endeavor came about rather suddenly, Jacques says, but as with so many business decisions, “Sometimes we all try to think and strategize too hard, but sometimes you just have to take the leap.” — Ralf Kircher

FIVE COOL THINGS ABOUT BORSHEIMS FINE JEWELRY & GIFTS

1 Loving Nature

The remodel team had nature in mind when designing the new store. Display cases are made of wood from sustainable forests in Brazil; underground pipes outside melt snow, reducing the wintertime need for salt and chemicals.

2 Service

Thirty wireless laptop computers have POS software, can complete transactions and track repairs and special orders. They have a catalog and advertising archive, a form to create reports for customers’ insurance purposes and a diamond search.

3 Super-Duper Store

Borsheims is housed in one 62,500-square-foot location, 25,000 square feet of which is sales floor. The remaining space contains the repair shop, receiving, shipping, gift warehouse, e-commerce division and corporate offices. The store uses material lifts and pneumatic tubes to speed service.

4 Light Matters

A two-story glass foyer allows natural daylight to flow through much of the sales floor, helped by etched glass panels throughout the store. Borsheims also asked its customers to help determine which lighting to install.

5 Everybody Fits

Wider aisles, private showing rooms and a bigger, brighter store make it easier to accommodate Borsheims’ crowds, which can total 37,000 shoppers during the three-day Berkshire Hathaway shareholders weekend each May.

         TRUE TALES

Captive Market

A tornado warning was issued one year during Berkshire Hathaway’s shareholders meeting, which is one of Borsheims’ busiest weekends of the year. Customers could take shelter in the store’s warehouse, and several hundred decided to do so for the 20 minutes the sirens sounded. Some associates actually brought the jewelry they had been selling back to the warehouse with them and completed the sale. Others sold items off the warehouse shelves! Susan Jacques, the president and CEO, greeted customers and kept them calm, as security monitored the storm and the store. It was an experience customers will never forget.

         COOL PROMOTION

Borsheims’ 2006 Christmas “Wish” promotion benefited the Make-A-Wish Foundation of Nebraska. Sterling-silver star-pendant “Wish” necklaces sold for $15, with 10 percent of proceeds going to the foundation. A “Wish” tree held boxes sold for $15 (all going to charity) that could contain something as small as a pearl bracelet or as large as a $1,000 gift card. (All sold in three days.) Additionally, the store held a celebrity poker tournament. In total, the store raised $32,000 for the foundation.

WHAT THE JUDGES SAID

Larry Johnson
Merchandising Expert

This store seems to answer the age-old parlor question, “If space and money were no object, what kind of store would you build?”

Leatrice Eiseman
Color Specialist

Theatrical is the word I would use to describe this store’s entrance. This is a very clean, contemporary and stylized look. Like Warner Co., this store’s interior design is about shapes and forms. The frosted glass is elegant. And I like the unusual treatment where the glass is next to the marble — this isn’t commonly done. The watch section is a favorite area of the store. The cubist carpet design and texture is a good, practical choice for a high-traffic area. And, the different watch companies each get a different color treatment, but have a uniform look with the logo etched in brushed steel.

This makes each brand stand out individually, but brings them together with similar treatment.

Berj Alexanian
Jewelry Display Designer

Modern, fresh and very inviting, inside and out.

Shane Decker
Sales Trainer

What can you say about this store that hasn’t been said? The building is wow, the merchandise is wow. They do an incredible job of marketing, bringing customers in from all over the world. And the store’s never gotten too big for the customer.

Rhonda Faber Green
Jewelry Designer

This expansive space looks as though you’ve been dropped right in the middle of a diamond. The white surfaces, etched glass and sleek lines all lend themselves to the feel of diamonds.

David Peters
Jewelry Educator

Big is better when it’s executed with the style and sophistication that Borsheims personifies. Clean lines combine with modern materials for a shopping experience that’s calming, relaxing and friendly.

Ruth Failer
Tradeshow Consultant

One of the largest independents, yet they treat their customers as if they were a small store.

Nick Failla
Sales Consultant

The grand entrance presented by Borsheims invites the customer to enter into an experience that will exceed expectation. The abundant space and design offers glamour with a name to remember.

Deborah E. Hecht
Wholesale Jewelry Rep

Although it is difficult to relate to the size of Borsheims, there are some key elements that make it stand apart: 1. Attention is still on the average repeat customer; 2. Prices are competitive; 3. The staff is happy to be there; 4. While working on their remodel, they incorporated their customers’ opinions. This not only makes their customer feel important, it also makes for the best choices. It is not a coincidence that they are successful.

Craig Underwood
2006 Cool Store Winner

Words can’t describe how awesome this store is. The single coolest feature is the new entrance — it’s taken the store to new heights. The design and visual image is unlike anything I’ve seen anywhere else.

STORE IMAGES

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This story is from the August 2007 edition of INSTORE

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