Nearing 30 years, Leo Hamel closes in on institution status.

Leo Hamel Fine Jewelers

SAN DIEGO, CA

URL: www.leohamel.com
OWNERS: Leo Hamel and Lisa Hamel McCarthy
FEATURED LOCATION OPENED: 2002
ARCHITECT: Mark R. Swenson, AIA, Studio C Architects, San Diego
AREA: 10,000 square feet
EMPLOYEES: 32
BRANDS: Hearts on Fire, Pandora,
IWC and Marco Bicego and Ball watches

LEO HAMEL says new customers assume Leo Hamel is a century-old institution, and not a living, breathing person. It was Leo, though, and not a revered ancestor, who started the business as a 300-square-foot shop in 1982, working up to the 10,000-square foot Mission-style showplace he opened 20 years later. Leo makes Leo Hamel real to customers by showing off his family — wife Penelope and their three children — in the company magazine and newsletter. What could be more real and immediate than toddlers? “I’m 52 and I have three kids under the age of 3-1/2,” he says. — EILEEN MCCLELLAND

Five Cool things About This Store

The Look: Destination Store

1When Leo Hamel designed a 10,000-square foot, destination jewelry store in 2002, he was looking for traffic, literally. “We wanted to be close to a freeway. We wanted a big space, and we got both of those.” He found an existing building within sight of a busy freeway and contracted with Mark Swenson, principal architect at Studio C Architects in San Diego to bring out the structure’s full potential. Hamel wanted the store to reflect San Diego’s popular Mission style design, both inside and out. Swenson says Hamel had definite ideas about the color scheme and provided him with photos of finished projects that inspired them. “We carried the exterior adobe colors and Mission details inside with the ceiling beams and the vigas (Spanish-style rafters) and the arches,” Swenson says. Millwork was custom-designed to complement the wood in the ceiling. The ceiling itself is a study in contrasts, with darker beams adding drama to the lighter wood of the ceiling. The interior texture simulates old-style plaster. Best of all, for Hamel, the space is practical as well as beautiful. Hamel appreciates the additional space, which supersized his interior from a previous 5,000-square-foot store. “There’s a lot of room and we can get 250 people in here,” Hamel says. “The design worked out well. There’s a room downstairs where our jewelers and watchmakers work. It’s all right here.” There’s also sufficient room for a coffee bar and a children’s area.

Hidden Profits: Vintage Jewelry

2 An average of 100 people cross Leo Hamel’s stylish threshold every day, many in search of what’s new in his vintage and estate cases, a mainstay for him. “I had a partner who got us away from estate jewelry and into brands and that slowed us way down; Hearts on Fire and Pandora sell — but we’ve gone back to our roots, which is vintage and estate jewelry. Our profits have soared. It’s become a strong pull in these times. Everything’s unique.” Collectors have areas of interest — watches, jade or anything branded — that keeps them coming back every week. Hamel has learned that even jewelry he considers distasteful is popular with someone. “Young people think ’80s gold is vintage jewelry because to them the ’80s is a long time ago. We get ugly rings, stuff you probably wouldn’t think of putting in your case, but kids buy it.” Of course, these days Hamel is buying gold in everything— antique firearms, statues and vases, even.

Communication: Constant Contact

3 “We do a lot of phone calls and letters and we are in contact with our customers all the time. It’s constant and relentless,” says Hamel, whose staff sends out at least 100 personal letters each week. “We give good value and good service; that sounds bland but people really appreciate it these days — the value and the service. I always try to give the customer more than what they paid for — better customer service, a thank-you card, a bigger smile, a wrapped box.” Hamel never sends computer-generated thank-you cards and rarely uses bulk mail. “Today, with e-mail so popular, letters and cards get more and more rare and make a big impression. I got 30 e-mail cards and three cards for my birthday. The three cards I got meant something. Personal touch is so important today because it’s becoming less and less and less common.”

Marketing: Store Magazine

4Leo Hamel started publishing a company magazine early in 2008 that is mailed to 22,000 affluent San Diegoans. Articles concern products, customers and interviews with local celebrities and public officials. “Direct mail still works. We track everything we do in advertising, including which radio and newspaper ad is working. We’ve recently redone our website. Every dollar we spend on advertising we get back in profit, we’ve streamlined that and made it very effective. And we will be starting an e-commerce function.”

Constant Training: Team Spirit

5 Training is a constant process at Leo Hamel, backed up by hundreds of written policies on how the company works. “Without written policy and without regular training you find really bizarre things happening. If you let staff go for any amount of time they drift away from the owner’s vision, so you have to have it in writing so you can refer to it,” Hamel says. Hamel has invested time in establishing a good rapport with his staff, and he says turnover has improved since a partner left in 2007. “There were a lot of factions, now everybody gets along, really, really nice. You don’t realize how much tension there is until it’s gone.” To encourage that team spirit, he buys birthday cakes for the staff, but he doesn’t stop there. Hamel plans a couple of staff dinners every year and even organizes a day trip out to the desert. “We used to camp; now we just target-practice shoot and then drink beer and barbecue.” He’s also made sure that benefits are more than competitive, with regular raises, extra paid time off, a 401K plan with matching funds and health insurance. “It’s worth paying more money to get the good people,” he says. “If you pay less for average people you always regret it.”

Store Images

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Five Questions With Leo Hamel

1  WHAT DREW YOU TO THE JEWELRY BUSINESS IN THE FIRST PLACE?

I was an unemployed dance teacher and my girlfriend got me an interview to be a salesperson. I became the top sales person in four months with no prior experience because I loved jewelry and precious metals. They eventually fired me for selling too much and depressing the other sales people.

2 TELL ME HOW YOU STARTED YOUR BUSINESS OUT OF YOUR BRIEFCASE.

I used to go to swap meets and sell amethysts and garnets and little strings of pearls, put them out on the table and people would buy them from me. My first store was only 300 square feet; I opened it around 1982.

3  WHAT WAS IT ABOUT SELLING THOSE AMETHYSTS AND STRINGS OF PEARLS THAT FIRST GOT YOU HOOKED?

I just loved pearls (there is no jewelry sexier than a choker on your woman’s neck), gold, silver and diamonds, they seemed like real money to me. Paper didn’t. And paper money just goes down in value.

4  WHY DID YOU DECIDE TO ADD PANDORA TO YOUR INVENTORY?

“It drives traffic. It’s as simple as that, and we get repeat business. Nobody buys one charm with that brand. They buy three or four or five and they come back. I hope it goes on for a few more years.”

5  HOW IS YOUR BUSINESS WEATHERING THE RECESSION?

I had the best year ever last year. We advertised when almost nobody did, by direct mail, phone call and letter campaigns and our customers still come in.

Try This

Pop Quiz

“I ASK NEW HIRES, ‘What’s 37 percent of 100?’ And most of them cannot answer that question. People who can’t do simple math today don’t really have an education. It’s become a problem how illiterate and uneducated people are, so I try to hire the top of the class, the top one or two people from a GIA class. It’s good to have smart people around you.” — LEO HAMEL

Listen and Learn

“JOIN A GROUP OF JEWELERS who are non-competitive or a group of businessmen; anyone who’s been in business more than three years knows something that you don’t know. A person in a group that I belonged to mentioned one thing to me in passing that’s probably made me $10,000 a month in profit. (No, I’m not going to say what it was!) I sent him a gift certificate as a thank-you present. Keep your ears open and listen, you will learn something.” — LEO HAMEL

This story is from the July 2009 edition of INSTORE