When the editorial team got its first look at last year’s entries to the America’s Coolest Stores contest, one that immediately caught our attention was LaPorte Jewelers in Lancaster, PA.
Among the things that made it stand out were:
- Its wild parties. That store proudly noted that it had been reported to the police four times for noise ordinance regulations by the college students who lived in the campus apartments upstairs.
- Its super cool floating cases, which would rise from the floor to a customer’s eye level (a very neat way indeed to present a finished custom piece).
- Its one-on-one service model: “When a client comes into our store and is greeted by one of our ambassadors they are welcomed and guided on a tour of inspiration or to a specific piece that they had in mind,” the entry read.
- The fact that this big-city-style store with its futuristic design and party-fuelled approach to retail was located in Lancaster County, home to the largest Amish community in the country.
“ The problem is people were
coming in and relaxing, but
they weren’t buying. ”
LaPorte went out of business before we got a chance to talk to them. Prior to closing its doors after just 13 months in operation, owner Matthew Addy told the local paper that revenues weren’t sufficient to support his bold experiment.
“The reality is I wanted a no-pressure environment. You come in, have a glass of wine or cup of coffee, you relax, then you buy.
“The problem is people were coming in and relaxing, but they weren’t buying,” he said.
It turned out the store had other problems as well. Addy was using capital raised from recent investors to pay off people who had earlier given him funds in exchange for promissory notes. It was, according to the FBI, little more than a Ponzi scheme.
Altogether, duped investors, many from religious groups, lost $3 million. Prosecutors said Addy used most of the money on his home, business, automobiles (he reportedly drove a nice BMW) and private school tuition for his children.
On Feb. 22, Addy, pleaded guilty to securities fraud charges. He faces a maximum of 20 years in prison at sentencing on May 10.
It’s impossible to know if Addy ever intended to make his store work — prosecutors said he never made any of the wholesale gem trading transactions whose purported success he used to lure investors. Like Bernie Madoff, Addy may have believed he would be able to trade his way back into the black. What is certain though is that he hurt a lot of small investors. And also that while a fun, relaxed atmosphere is important to a successful jewelry retail operation, you need to get the basics right. Right location, right inventory, right revenue turn, a marketing approach that gets the right kind of customers in the door … In short, the tricky stuff. A store that loses money, especially other people’s, is never cool.
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