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ROGER & PATTY STEWART
STUCK IN THE STORE, THEY JUST SAILED AWAY 

FLOATING PEACEFULLY through the waters of the San Juan Islands, Roger and Patty Stewart are either busy tending to their passengers, their boat, or simply admiring the view. 

As captain and crew of the Gallant Lady, a 60-year-old cruise boat that is a favorite among long-time vacationers in the Puget Sound area, there isn’t much time to reflect on the past — and the very, very different life the couple led seven years ago.  

In 1997, the couple were running Osborne & Stewart Jewelry in Centralia, WA. Their business was growing. Cash flow was healthy, as the couple had finally overcome the typical jeweler’s primary cash-flow killer — over-reliance on Christmas sales. But they knew something was wrong: something that was very difficult to admit. 

The fact was, they were bored with their business. 

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Patty had grown up in the store, formerly owned by her father, a goldsmith. Roger, a former school teacher, had been around the business for 15 years prior to buying it, and then worked in it for another 18 years. “Patty wanted to get away from retail before we got too old,” says Roger. “I agreed. We had 18 years worth of Saturdays to catch up on.” 

At the same time, the Kmarts and Costcos of the world were beginning to have an impact on customers’ perception of jewelry. “Seiko was selling ‘import models’ through Kmart at $59 apiece,” says Roger. “Never mind the gold plating, the erratic movements, or the almost-nonexistent warranties. They made our $129 Seikos look way overpriced.” Similarly, the Stewarts, as the only repair shop in town, saw the inferior quality of big-box jewelry firsthand. “People would bring in rings, and the gold was so thin that we couldn’t resize it,” adds Roger. “And the prongs were often sticking straight up in the air.” Price was all the rage. Quality didn’t seem to matter. And the Stewarts’ frustration was mounting. 

When their youngest of three sons graduated college in summer of ‘97, it seemed as good a time as any to get out. They had good income from a tract of land that was used for logging, as well as their building, which had 17 tenants. It was time to enjoy the fruits of their labors. 

Roger and Patty had never owned a boat before. But, living in “the boat capital of the world,” the Stewarts decided to go out and buy an old pleasure boat. While wandering, they saw one with a sign that read “Business Opportunity”. Says Roger: “It was the Gallant Lady. It already had 80% booking for the following season, which was still several months away. We figured, how hard could it be?” 

With a solid plan for their life after jewelry, they now needed a plan to go out of business. They turned to Mike and Bill Kmet of North Coast Jewelry. The brothers recommended a 60-day strategy with staggered discounting (based on merchandise age) that would increase as the sale went on. “We discounted our ‘dogs’ at 70% off immediately,” says Roger. “Some of the less aged merchandise was discounted at 30-40% off, and so forth.” Each week, they advertised what categories and items would be discounted even further. It worked. 

When it came time for the final GOB sale, which was scheduled for eight weeks, the Stewarts objected to the hokey signs that the Kmets pasted up in their windows, covering them entirely so that people could not see in from the outside. And they gasped over the proposed ad budget for the GOB sale — which was more than they typically spent in a year. But they went along with the suggestions … and were glad they did. The closing was a whirlwind, with no time to think or even catch a breath. And when all was said and done, the results were beyond their wildest expectations.  

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“We had only a shoebox worth of stuff left when it was all over,” Roger says. During the two-month sale, the company did almost two years’ worth of business. The Stewarts were able to buy the Gallant Lady outright for $180,000, put a new roof on their building for $60,000, and still have upwards of $160,000 of remaining profits from the sale.  

Both Stewarts recommend that other owners in their situation hire a company that specializes in going-out-of-business sales. “People who have tried it themselves are never happy with the results,” says Patty. “It costs more up front to hire someone, but it’s much better down the road.”  

Returning to the San Juan Islands on the U.S.-Canadian border each year, the Stewarts often stop to visit with celebrities, including Prince William, Ted Danson, and one former frequent visitor to the islands, the late Johnny Carson. One of the many islands is owned by Gene Hackman. “It’s like boating in a big bathtub,” says Roger of the peaceful waters, protected from harsh weather by surrounding mountain ranges.  

However, the transition from store owner to sea captain did not come without some hitches. “I had no idea what I was getting into with Coast Guard inspections, licenses, and training,” says Roger. Fortunately, the former skipper of the boat stayed on an extra season to train the new owners while Roger earned his captaincy through the Merchant Marines. Roger adds that many people don’t realize that in times of national emergency, he and other captains like him can be called into active duty, because they are licensed through the Coast Guard. “During Desert Storm, 60 captains of my rank were called up,” he says. 

While their income is not what it was back in the days their jewelry store was going strong, the Stewarts only have to work five months a year, and the venerable boat is booked well ahead of time. “I make more in a single three-day weekend than I used to make in a month of teaching,” says Roger. They also have the flexibility to visit their family often. More importantly, they can now take advantage of something they thought they’d never have: Christmas vacation. And as Patty says, “Would you rather be in a store six days a week, or out in the sun, on the water?” All a matter of perspective. — TRACE SHELTON.

JOHN PARRISH
RETAIL PAST, WHOLESALE PRESENT 

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THE YEAR WAS 1993, and John Parrish should have been sitting on top of the world. He was working in the family business, Parrish Jewelers of Searcy, AR, which his father had founded. But in an unusual arrangement, the family had two separate locations in the same town — which allowed Parrish to enjoy the best of both worlds. 

He had the support of his family, and also the autonomy that’s frequently lacking in a single-location family operation. Even better, 1993 was the year that Parrish got married. 

From the outside, he was the picture of small-town success. But inside, cancers were eating away at the family business — which would eventually die, of very natural causes, in 1998. R.I.P. 

The decline started, Parrish remembers, in 1993. Most jewelers will recall the competitive pressures that retailers all over the country were facing at the time — a weakened economy, a dearth of qualified help, as well as the paradigm-shifting rise of big-box mass-merchants like Wal-Mart. These behemoths of retail spared no small business, including Parrish Jewelers, whose bread and butter — the $300 and under wedding sets — they were now infringing on. “These sets you could mark up and make money on,” says Parrish. 

Many retailers decided that their glory days were gone … and weren’t coming back. One of those was Parrish’s father, who decided that, with tough times ahead and likely to get tougher, it no longer made sense to have two separate Searcy locations. So he retired, closing one of the family’s two stores, and leaving John in charge of the second, a 3,600-square-foot store in a strip center right next store to a J.C. Penney.  

The closing of one store, though, was the least of Parrish’s problems. The newlywed was given a surprise wedding present from his two-person staff. They quit.  
“I couldn’t believe it. They gave notice and soon I was faced with working alone, keeping everything together until I hired replacements,” Parrish says. 

Parrish found himself working in six days a week and more than 10 hours a day. Replacements were easy to find. But quality replacements were not. “I couldn’t find anyone over the age of 30 to come work in retail,” Parrish says, admitting he was really tired of supervising inexperienced, and frequently irresponsible, 20-year-olds. 

So he kept on working the brutal schedule, day after day, year after year. He was surviving, but something was definitely missing. “A life!” Parrish says adamantly. 

The young jeweler was clearly burning out and began getting a gut feeling that this rough patch he was going through might not be a temporary phase. You know, one of those “down periods” that makes the delicate dance of life so rich and rewarding.  

While his business had definite assets — loyal clients and a great location— the competitive pressures continued to chip away at his both his income and his sense of hope. The squeeze he was already feeling became even tighter with the rise in the late 1990s of the Internet. There seemed to be no answer for his problems … aside from working a little bit harder and eating a little bit less.  

Finally, in 1998, something clicked in Parrish — or perhaps you would say, it snapped. “I just got sick of it,” Parrish admits. “I decided then to get out and get out quickly,” he says.  

But what would he do? After all, jewelry retail was the only thing he lived and breathed. Parrish wasn’t disturbed at all by the fact that this was the only life he had known. In fact, he was calm and peaceful. Armed with the healthy attitude that all of life is a series of changes, Parrish began calling upon his wholesale and manufacturer connections and began plotting opening his own wholesale business.  

When news hit the community that he was closing up shop, no one believed it. 

“No one took me seriously. Here I was only 42 years old and telling people I was going out of business. They all said I was too young to do such a thing,” Parrish laughs. The idea of someone so young getting out of business was just not the norm, especially shutting down a family business. After all, family businesses only close when the owner retires well into his or her 70s — or if the owner dies. Shutting down at 42 years old? Unheard of. “I would joke with people and tell them that I was going to become a house-husband,” he laughs.  

In the three months it took to close the store, Parrish noticed something very interesting. After the first two weeks he was no longer seeing his loyal customers. “The remaining time was all new customers, mostly women buying on credit,” he says.  

Within three months the business, which averaged a half million in sales, closed forever.  

Though he maintained a show of bravado during the closing days, Parrish admits it was hard shutting the doors the very last time — leaving a job he had done most of his life. 

But soon after closing, he felt something surprising — a truly sweet sense of relief. Now he could have normal hours. Now he could have freedom. Interestingly enough, though, Parrish didn’t take a sabbatical or even a vacation after closing the family retail business. Instead, the former retailer started right away on building his loose diamond wholesale business, Parish Gems. Says Parish, “I feel at home in this business. Selling is only buying in reverse.”  

While still in the industry, Parrish now sees his role as an educator to jewelers. “I can now teach retailers how to make profits,” he says. His biggest crusade is getting jewelers to take back their business from the young people who are bullying retailers with Internet diamond price quotes. “Too many jewelers are shaking in their shoes when these customers come in. That should not be,” Parrish says.  

Overall, Parrish is happy with his career switch from retailer to wholesaler. “My blood pressure has gone way down, except when I don’t get paid,” he laughs. And he does miss one thing. “I miss my cash register. It was nice having money.” As for that time off from working that has yet to materialize? “That’s coming,” Parrish says. “Soon.” 

We shall see. — DONNA FRISCHKNECHT.

ANDY LAMPE
FROM MANNING THE COUNTER TO SERVING HIS COUNTY 

SAY “PROPERTY TAXES”, “average per capita income”, or “intergovernmental cooperation” and most people’s eyes glaze over. But Andy Lampe’s light up. 

As Lampe, a county commissioner of Washington’s Okanogan County, discusses local politics, you hear a man who is passionate about the people he serves and determined to represent them with integrity. But he learned about passion and integrity long before taking office — he learned them in a jewelry store. Once he called them “customers”… now he calls them “constituents.” For Lampe, his approach to the people he serves is the same.  

Lampe first started serving the public in 1982, when he and his brother Chuck bought a jewelry store in Omak, WA. This was an important step forward towards building a thriving second-generation business — his mother and father had opened the family’s first jewelry store in nearby Othello, WA, in 1971, and were working there with Andy’s older brother, Mike. 

Further expansion and even brighter possibilities arrived in 1998, when Andy and his wife Debbie moved to Powell, WY, to open the family’s third location. By this time, the Lampes’ parents had retired and the result was perfect symmetry — three brothers, three jewelry stores. 

That symmetry would quickly be shattered. First, Mike died suddenly in 1999. Then the following year, Chuck was diagnosed with leukemia (he would eventually pass away in 2003). 

Which left Andy in an almost impossible position. Chuck was in a hospital in Washington. Andy wanted to be with his family, where he was needed most. But, at the same time, his business in Wyoming was growing solidly at more than 10% per year. 

Another important issue for the Lampes was keeping the business in the family. They had always had a blood family member running each store, and none of them could fathom allowing an outsider to run a jewelry business with the name “Lampe Jewelers” on it.  

So the decision was made to consolidate. First, the Omak location was closed in 2001. Then, the following year, the Powell and Moses Lake locations shut their doors forever (the Othello location was closed when Andy’s parents retired). While it felt like giving up on a dream, all of the Lampes — even Del, the man who had founded the business 30 years before — agreed it was the right thing to do. “It was hard to move, but family comes first,” Andy says.  

The going-out-of-business-sales, three in two years, were both mentally challenging and physically exhausting —much more so than Andy would have believed possible. “When you go into business, all it takes is money,” he says. “Going out takes planning, preparation, and a lot of work.” 

He describes the atmosphere at the first GOB sales, held in the Omak store in December 2001, as “a feeding frenzy”. Cust-omers thronged the store, spilling out onto the sidewalk outside. The family was completely un-prepared for the traffic and sheer volume of trans-actions. Says Andy, “We did two months’ worth of business on the first day of the sale.” This inevitably led to some feelings of regret. “You do a lot more volume than ever before, and you wonder why you couldn’t do that regularly,” he says.  

With a little bit of experience under their belts, the family’s second set of GOB sales, held at the Powell and Moses Lake locations during the fall of 2002, went more smoothly. But no matter how well you prepare, Andy warns other jewelers that the effort of going out of business is huge: “It will be the hardest you’ve ever worked in your entire life, I guarantee it.” 

But he’s glad he did it. As Lampe’s was not a discount store and usually made substantial mark-ups on their jewelry sold, the family was able to offer deep price cuts during the G.O.B. sale and still make a profit on their inventory. If they had sold the business outright to another jeweler, they almost certainly would have had to take a loss on their inventory. Additionally, a jeweler purchasing the business outright would have probably insisted on paying the family in installments. The Lampes’ going-out-of-business sales always put money in their pockets immediately.  

With one dead brother and another critically ill, the process of splitting up the proceeds of the sales of the business had the potential to be extremely difficult. But it went smoothly. This was, in large part, due to the rules the three brothers and their parents had established when incorporating their business prior to opening up the second and third stores. “We laid out what we would do if one or more of us died, how life insurance would be spent, how shares would be bought up, and so on,” he says. The goal was for the corporation to always be owned by a Lampe, not a spouse or non-family member. All of the primaries signed the document. The brothers had their wives review it through outside counsel and sign off as well. “Chuck went through a divorce in the early 90’s, and the agreement showed exactly what his ex-wife would get. Everything was cut-and-dried, and that made a huge difference, both for that situation and the business closing,” says Andy. 

Says Andy: “I can’t recommend enough that people plan ahead for how to get out of their business. Do it while everyone is on good terms.” 

In the end, Andy says he was left with a “comfortable sum.” After the sale, Andy and Debbie returned to Omak. They soon bought a building and opened a new business: Lampe Design Center. While the business does some jewelry design and repair, its specialty is unusual techniques like sandblasting and rock etching. Andy says the business is “far more low-key and laid-back” than his previous store.  

However, it wasn’t long before another more powerful itch crept over him: politics. Because his family were long-time area residents, Andy had strong feelings about the local political scene. And when he saw Okanogan’s incumbent county commissioner, whose policies Andy didn’t quite agree with, running for re-election without any opposition, Andy felt that voters deserved a choice. He filed to run, and was elected in November. Says Andy: “I felt I would make a good commissioner, and I guess the people agreed with me.” 

Andy Lampe began his new job as Okanogan County Commissioner on January 3, 2005. While the commissioner’s position is not a full-time job, it’s already proved demanding enough that he’s relinquished his day-to-day duties of running Lampe Design Center to his wife and stepson. “It’s not technically a full-time job … but it is,” says Andy.  

Having only been back in Omak for a little more than two years, Andy is fully aware of the fact that the Lampe name stands for integrity and service in Okanogan County … in fact, he embraces it. In addition to his duties as commissioner, he officiates high school football and wrestling contests. “I’ve always enjoyed giving back to the community,” he says. 

He says that his experience in jewelry retail has prepared him well for his day-to-day dealings with the public. “You have to be able to listen, and if you don’t know the answer, you go find it,” he says. But the differences in his new role are equally striking. Says Andy: “When you own a jewelry store, you make the decision based on your own feelings. But in politics, you have to think about everyone. You have to be able to predict the outcome of every choice you make.” Spoken like a true man of service. — TRACE SHELTON.

DOUG ANDERSON
SAYING GOODBYE TO ALL THE PRESSURE 

TIGHT CASH FLOW. Underachieving employees. The demands of being “on stage”. Like an ox pulling a freight train, Doug Anderson carried a jewelry store on his back as long as he could … and then he got out. 

After 22 years as owner and manager of Anderson Brothers Jewelers in McMinnville, OR, Doug had experienced his share of success and come to love the inhabitants of this small town 40 miles southwest of Portland. But with the last of his daughters graduating from college, he saw light at the end of the tunnel. It was time to leave the jewelry business for good. 

A third-generation jeweler, Anderson began his service-oriented career not in jewelry sales, but as a high school math teacher. He quickly grew tired of having to discipline unruly students, and talked his father into buying another jewelry store in McMinnville. Anderson became the manager of Anderson Brothers’ third location. Eventually, he bought the business and ran it until 1999. 

Closing the 77-year-old business was a surprisingly easy decision, says Anderson. Both of his parents were gone, and he had long since realized that his future did not lay in store ownership. “I never felt like I was getting ahead,” says Anderson. “I would get through the holidays with enough money to pay off my line of credit. Then, at the first of the year, I would have to take it out again. I was making money on paper, but that’s all.”  

In the end, carrying on the legacy wasn’t worth the headaches it caused. His best salespeople were part-timers who really didn’t need the job, and he could never seem to motivate his two full-time staffers. Thus, Anderson always shouldered the responsibility of making sales goals himself. And while his kind nature was perfect for providing great service, a single complaint could sour his whole day. “There were times when I just didn’t have the energy, when I wanted to go to the back and size rings or sauter chains,” he says. “But my people always deferred to me in selling. I never found the solution to this.”  

To the pressures of running such a business, add the costs of putting three daughters through college — at private schools. A divorce in the early 1990s left Anderson responsible for child and spousal support, which siphoned half his income every month. For two back-breaking years, all three children were in school at once. He was ready to offload the store… but he couldn’t afford to. “I hung on for about three or four years after I was ready to go,” says Anderson. “It was the only way I could produce enough money to get my daughters through school. I couldn’t abandon that reliable income for the unknown.” In late 1998, the impending graduation of his youngest child gave Anderson the green light. He knew his time had come. 

In his search for an outside agency to help take the company out of business, Anderson contacted Mike & Bill Kmet of North Coast Jewelry, whom his sales reps had recommended. Other GOB specialists from around the country estimated that Anderson Brothers could do $300,000 in sales over the 60-day closing period. “With the help of the Kmets, we did over $500,000,” says Anderson. 

The decision was made to run the GOB sale during the holiday season, from November 1st through January 5th, when customers were already in the mood to buy. Anderson didn’t initially believe that the store would be able to consistently do huge numbers over the course of the sale, but he trusted North Coast Jewelry, as they had already been through the process many times over. “The quality of merchandise that Mike and Bill brought in was totally appropriate for our business,” he says. “They also handled all the media buying, using radio, cable, and newspaper. All I had to do was show up and count the money at the end of the day.” He had no idea how much to expect. But when all was said and done, Anderson took home $175,000 after expenses. He was 52 years old. “Some of my ex-employees think I’m a millionaire now,” he laughs.  

His customers were sad to see such a long-running operation go out of business, but Anderson says he still sees many of them during the course of fulfilling his duties for his new employer: the McMinnville Chamber of Commerce. He serves as the office manager, handling database duties and accounting work. His favorite part? The low-pressure environment. “I don’t take my work home, and I have Saturdays off,” he says. “I should have a sign on my desk that reads, ‘The buck doesn’t stop here!’” 

Nevertheless, like many jewelry store owners, one of his favorite things in life is being of service. “I’m glad I’m in a position that keeps me in public view so I can interact with people,” says Anderson. Still known as “Diamond Anderson” around town, he gracefully bows out of the requests he still gets for appraisals. But he does continue to provide one teeny-tiny service from the old days. “If a co-worker or friend gives me a watch, I make sure they get a free battery,” Anderson admits with a smile. “I keep a stash of batteries at home, and when I run out, I reorder.” Even though he doesn’t make a dime on it and can no longer profit from their good will, he still enjoys making people happy. “In fact, I just changed one for my boss this morning!” he chuckles. 

Six years since he sold the business, the two things Anderson misses most about owning a jewelry store are the “rush” of making a big sale, and the happiness of young couples after purchasing one of his pieces. Although he’s no longer active in the industry, he still maintains four or five suppliers and sells about a half-dozen wedding sets every year to children of former customers or church contacts. Other than that, Anderson is enjoying his time away from jewelry sales, catching up on his reading and improving his golf game. He has since remarried and travels often, visiting his daughters as often as possible (all three live out of state). 

With the world off his shoulders and at his feet, Anderson has never felt so free. His advice to jewelers thinking of going out of business? “Talk to lots of people who specialize in it, and pick someone you’re comfortable with that comes highly recommended,” he says. He adds, “Everything’s going to be okay.” Or, if you’re like Anderson, it could be even better. — TRACE SHELTON.

RUTH FITZGERALD
FROM RETAIL HELL TO A NEW ‘UNSTORE’ 

BREATHE IN. BREATHE OUT. Breathe in. Breathe out. One can only imagine this to be the thought that runs through Ruth Fitzgerald’s head each day when she opens the door to her “unstore” the cozy, living-room-like environment where she now sells her creations to customers on an appointment-only basis. 

Located in an office complex near the posh Town Center shopping center of Laguna Niguel, CA, Fitzgerald’s store, Jewelry Design By Ruth Fitzgerald, is low-key but opulent. More like a European boutique than anything typically found in America, every detail oozes tranquility — from the rich mahogany furniture, to the Oriental rugs arranged just-so, to the hand-painted fleur-de-lis stenciling. All in all, it’s a far cry from Fitzgerald’s go-go retail days, when she ran Fitzgerald’s Jewelers in a much bigger location nearby. 

“There definitely is less stress here,” Fitzgerald says. 
The peace in her voice sends a clear message: traditional retail is not the only path to success in the jewelry business.  

And Fitzgerald should know, because she tasted genuine success during her career in mainstream jewelry retail. And while it was sweet, that success ultimately left a bad aftertaste for this former Midwesterner with a discriminating palate. 

Fitzgerald moved to the West Coast and opened the doors to her thriving Fitzgerald’s Jewelers in 1997. She arrived in the Laguna Niguel area with a decade of jewelry experience under her belt, having already operated a small design studio in the Chicago area. Formerly the president and CEO of an economic development company, Fitzgerald loved the jewelry business. And she believed that her move to California would consummate the love affair – as she moved from small design studio to a full-fledged retail store. 

It was a “major” store, Fitzgerald recalls, with 1,500 square feet of space and 15 showcases. Decorated in shades of beige, blue and gold, the store was upscale and the inventory reflected that. Fitzgerald’s showcases featured many name designers, as well as her own creations, not to mention a massive selection – nearly 500 pieces — of high-end giftware from famed manufacturers like Llarado and Waterford. Her business struck a chord with upscale clients in the area, growing steadily at 10% a year. 

Yet, Fitzgerald wasn’t happy. The long hours, the fast pace, not to mention the advent of Internet retailing which made selling diamonds harder, made her desire for the “good old days” stronger and stronger. While she had always intended to eventually go back to running a small design studio, the desire to get out of her bigger retail store came sooner than expected. She knew it was time to make her move.  

However, the transition from retail store to design studio was not going to be easy. First, the jeweler began a year in advance scouting out the perfect location for her new venture. She didn’t want to leave Laguna Niguel or the Town Center area that offered the perfect combination of shoppers and business people. “People are creatures of habit, so I didn’t want to go to far from where Fitzgerald’s Jewelers was,” she says. 

Fitzgerald soon found a ground floor corner office in a nearby complex with a private entrance that would allow clients to drive up to her door. She was also pleased with the atrium in the building that could be used for hosting parties.  

“The space was definitely less complicated for people to get to me,” she says. The real challenge, though, awaited her.  

Now she had to break the news to her clients. And she did so with a bang. Well, it was more like a bash—a big party. “It was important to gather as many as my customers as I could to tell them what I was planning to do,” Fitzgerald says. “It is so critical to advise customers along the way that a store is closing. If you don’t, rumors get started.” 

Fitzgerald didn’t want negative rumors as to why she was closing to hit the streets, so she did all she could to explain her transition from retailer to private design studio owner. In spite of all her efforts to educate, some customers didn’t quite get it. “They didn’t seem to understand that I was making a change in the way I was doing business,” she says. 

So, in 2003, just six years since opening her store, Fitzgerald hung the “Going Out of Business” sign in the large front window of Fitzgerald’s Jewelers.  

The going-out-of-business sale, done by Wilkerson and Associates, took about eight weeks. Overall, the process went smoothly, she remembers. When the sale finally ended, Fitzgerald went right back to work. In the span of a week, Fitzgerald’s Jewelers was no more … and Jewelry Design by Ruth Fitzgerald was open for business. By appointment only, of course. 

As a proud new “homeowner”, Fitzgerald unveiled her new concept and new format by holding an open house for her former clients. Instead of a traditional store, now her store looked like a European parlor. Instead of 15 cases, there were now only two. And instead of numerous brand-name designers, there remained only one: Ruth Fitzgerald.  

Clearly, her customers were pleased – as Fitzgerald’s business has grown in double digits in each of the past two years. While she may have “downsized”—going to a smaller space with three staffers as opposed to six in her store—her sales and her clients have super-sized. “I am getting a more upscale client than I did in my store,” Fitzgerald says, explaining that being able to cut the overhead has helped her offer better quality merchandise at non-retail prices.  

Technically, Fitzgerald’s un-store is by appointment only but two years later regular clients will still drop by. 
“We welcome them to sit down and make themselves comfortable until we can take them and they don’t seem to mind,” she says. 

Yet with customers waiting, the stress she said that existed in traditional retailing is just not there in her design studio. Fitzgerald is able to create and sell without the retail frenzy.  

As for the retail hours she had hoped to bid farewell to … well, that has yet to materialize.  

“I said I was going to work less, but I find myself still working more than I intend too,” Fitzgerald laughs. With Monday and Tuesday her days “off” in her design studio business, she actually spends those days creating jewelry and meeting with her bench jewelers.  

But that’s just fine with her. After all, when you are doing something you love, who watches the clock? Fitzgerald’s exit from traditional retail to design studio has given her a less-hectic pace life. She has returned to her true bliss … breathe in, breathe out. — DONNA FRISCHKNECHT.

A NEW BEGINNING
MADAGASCAR-BOUND

Another former retailer who has gotten out of his store — and we mean way out of his store — is JEFF FIEBIG. A second-generation jeweler who spent his younger days touring gem mines in Brazil, Tanzania, Zanzibar and South Africa, Fiebig eventually took over the family business in Sturgis, MI, and ran it for more than 10 years. But he began chafing at the restrictions of retail life … in general, wanting to resume his gemstone-hunting adventures; and more specifically, wanting to source gemstones from Madagascar, while at the same time helping the people of that impoverished, but gem-rich, country. In early April, Jim will head off to Madagascar to establish a bank account and find a house for himself and his wife, JoAnn. They will live there until October of this year, working in the gemstone market and hosting small groups of Americans who want to come for gem-buying and tourism. In November, he will return to the United States for six months, offering in-store consulting to help jewelers benefit from his 25-plus years of building a profitable colored-gemstone business. If you’re interested in travelling to Madagascar or supporting Fiebig’s efforts, call (269) 651-3190 or visit his web site at www.jamesfiebig.com

TIPS FOR GETTING OUT

selling your store outright? don’t assume you can GET your asking price. It’s an absolute buyer’s market. Jewelry stores are traditionally very difficult to sell, as inventory costs are high and turn is slow. And your market is limited — you will need a buyer with jewelry management knowledge, the funds to purchase your business, and the desire. Hard to find. (Mike Kmet, North Coast Jewelry)

Use your customer list to its best advantage. Your best tool for ensuring a successful going-out-of-business sale is your customer list. Promote your sale via direct mail. Then, after the G.O.B. sale is over, offer your customer list to all the retail jewelers in your trading area and accept the highest bid. (Wilkerson & Associates)

Clarify warranty terms for your customers. Make it clear that a warranty is backed by the individual manufacturer. The duration and terms are spelled out in the document attached to the warranty or can be downloaded from the manufacturer’s website. (Wilkerson & Associates)

Capitalize on your past customers. Tell them how much you appreciated their business via direct mail, e-mail or telephone. Invite them to your sale event. Consider a special night where your special customers get first choice at your sale. (Wilkerson & Associates)

Know what to do with your telephone number. If you have repaired items or special orders that have not been claimed, transfer your telephone number to a home or office to enable you to close the transaction. (Wilkerson & Associates)

Consider whether bringing in outside goods is right for your store. Most jewelry stores stock inventory in width, not depth, and could sell many more of a given item. And, sometimes additional fast-moving items are needed to help the slower-moving, large-ticket goods sell. However, it’s only worth it if you can still make a profit on these outside items at a deeply reduced price. Local laws should also be reviewed before any additional merchandise is considered. (Mike Kmet, North Coast Jewelry)

Negotiate a reduced rate structure for large memo diamonds if using a liquidator. Most liquidators charge a percentage of your gross sales during the GOB period. Large memo diamonds are already sold on thin margins. During a GOB sale, the standard percentage can take away too much of your profit on these diamonds. (Mike Kmet, North Coast Jewelry)

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Les Georgettes

It’s All About Choices

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Cover Stories

THE INSTORE DESIGN AWARDS 2019 – Winners Announced!

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Jewelry design is the lifeblood of our industry, and those on its forefront are constantly challenging the status quo, pushing boundaries in creativity and wowing jewelry lovers with their skill and passion. These are the creators we seek to honor with the INSTORE Design Awards.

For 2019, we expanded our categories from eight to 25, allowing designers more freedom to enter the best category for each piece. And we received more than 171 entries as a result. In order to determine the best of the best, we recruited a judges panel composed of nine retailers, all of whose businesses carry multiple designer lines, to vote on their favorite jewelry in a “blind voting” process. We also opened voting to all North American jewelry retailers online at instoremag.com, where more than 9,300 votes were cast to decide the “Retailer’s Choice” winner in each category.

And finally, as we have since our competition began, we recognize one up-and-coming designer who embodies the inventive spirit so long encouraged by our former colleague Cindy Edelstein, who passed away in 2016.

Now, turn the page and see the very best that our industry has to offer. Who knows, maybe you’ll find your next hot-selling line right here in this story!

Best Men’s Jewelry

Best Statement Piece

THE JUDGES

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Cover Stories

3 Simple Ways a “Good-Better-Best” Display Can Make You More Money

The success of these pricing strategies has been proven beyond dispute.

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The success of thoughtfully implemented “Good-Better-Best” (G-B-B) pricing strategies has been proven beyond dispute. Look around. Airlines offer coach class seats with variable options. Allstate offers auto batteries with warranties ranging from 12-48 months at prices that vary disproportionately. Heating oil suppliers sell plans based on a monthly fluctuating rate as well as a “premium” package in which the rate is fixed for the season.

I read a recent article in the Harvard Business Review (“The Good-Better-Best Approach to Pricing,” by Rafi Mohammed) that made me wonder why retail jewelers were not taking full advantage of this strategy in their stores.

Twenty years ago, Allstate conducted research to determine just how much price really mattered to their insurance customers. They learned that drivers are very concerned that if they are involved in an auto accident, their rates will go up. They introduced three new policy levels to add to their “Standard” level policy. They have a “Basic” policy at 5 percent below “Standard,” a “Gold” policy (6 percent higher price), and a “Platinum” level policy (15 percent higher price). Last year, only 10 percent of their customers downgraded to “Basic,” while a whopping 23 percent upgraded from “Standard” to “Gold” or “Platinum.”

So what can we do in a retail jewelry store to take advantage of this tendency of consumers to move up in price when given attractive options?

Implementing a “Good-Better-Best” plan in your store has three benefits. One, it can entice new and existing customers to spend more. Two, it allows you to compete directly with lower-priced competitors, including Internet shops. And three, a G-B-B strategy will change your customers’ actions through consumer psychology.

Successfully offering a G-B-B option depends on the following considerations:

  1. The price level of the “Good” option should be no more than 25 percent below the price of the “Better” option. The “Best” option should be no more than 50 percent higher than the “Better” option. For example, if we have a $1,000 “Better” item, the “Good” option should be about $800, and the “Best” option about $1,400.
  2. There should be a perceived important difference between the “Good” and “Better” options that motivate the customer to opt up for the “Better” selection. Limit the number of features in your “Good” option to improve the perceived value of the “Better” option.
  3. Each option should be explained in four attributes that differentiate it from the lower-priced option.
  4. Signage should clearly explain the differences and costs of each option. Name each option intelligently. Don’t use descriptions that confuse the merchandise. There is nothing wrong with simply using “Good, Better, Best.”

When you are determining the price points for your G-B-B offerings, consult your “inventory performance by category” report in your inventory management software. This will tell you the average selling price of your current sales for each different category and style of merchandise. Your goal is obviously to sell more at higher prices, so consider a price about 10 percent higher than your current average sale as your “Better” option. For example, if your average diamond stud earring sale is $1,000 now, make your price points $899, $1,099 and $1,399.

Retail jewelers should benefit from the thoughtful implementation of the G-B-B principles. Here are some display suggestions for your store.

Diamond stud earrings and anniversary bands

Offer three grades of earrings in the most popular styles. The differences in stud earring prices are obviously predicated by diamond size and quality as well as mounting material.
Start with 14K white gold mountings with round diamonds in sizes ranging from one-eighth, one-quarter, one-third, one-half, three-quarters and one-carat sizes. Develop a source (internally or externally) that can provide three different qualities in all six sizes. Obtain a display arrangement that allows the three qualities and sizes to be shown with descriptions, as well as prices and monthly payment options. Add signage that explains each of the four differentiating points between the qualities offered. Put in place a reorder procedure that quickly refills the empty space when sales occur.

Bridal

Make your most popular styles of engagement rings (halos, solitaires, sets, three-stone, etc.) and create a display with a G-B-B variation of each in a single tray. If you can, include several of these in each showcase. If you can direct your customer to those trays, you stand a better chance of easily up-selling the customer to a bigger size. Feature payment amounts to make it easier for your staff to sell up.

I am a big believer in organizing your bridal showcase by style, not by vendor brand (unless it is a very recognizable national brand) or diamond size. That is how your customer shops. With all your halo choices collected together in a single part of the showcase, you’ll find it much easier to move up in price and keep your customer from having to visit several showcases in order to see your selection.

Other merchandise

Follow this same strategy. Choose your most popular designs and identify what you can do to that item to be able to sell it at 25 percent less. Maybe it is a smaller stone or a metal change to silver. Make that new item your “Good” selection. Now revisit the original piece and ask what you can add to the design to make it worth 25 percent more. Make that your “Best” choice, and display them all together with prices and payments.

If you are successful with such a strategy, it could make both your customer and you very happy. Your store would be easier for your customer to shop, and your inventory could shrink to fewer pieces offered since your sales are more concentrated in your G-B-B offerings.

Give it a try and see what happens to your average sale. If it works, expand it. If it doesn’t, try something else. Be sure you track the results of your efforts to know what has worked and what has not.

Retail jewelry is hard enough without leaving money on the table when the customer is already in your store and poised to buy. Implementing this strategy might just move your results from “Good” to “Better” to “Best.”

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E-Commerce for Everyone: Let Your Customers Buy Something Where & When They Want To

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E-commerce has been vilified by many independent retail jewelers as an under-cutting, price-conscious evil entity intent on stealing hard-earned business from brick-and-mortar stores while ripping their profit margins to shreds.

At this point, though, it’s more or less a matter of if you can’t beat them the way you’ve been operating, you’d better consider joining them.

It’s time to rethink e-commerce as a viable option for you, the independent brick-and-mortar-based jeweler, but also to understand what it takes in dollars and time to drive traffic to a website, says Ben Smithee, digital-marketing expert and CEO of The Smithee Group. The big online players didn’t get where they are without investing considerable time and money into marketing, social media and search-engine optimization.

In other words, simply enabling e-commerce is not like flipping a switch and watching the money pour in. Instead, imagine you’re opening a second store. How much planning and preparation would you put into that? You’d work with a store designer. You’d hire more staff. You’d invest in advertising.

“Most people grossly underestimate what it takes for advertising to send people to the site,” Smithee says. “A lot of them expect to have overnight sales. Start with realistic expectations — they should be thinking about selling one, two, three things a week or a month to start and ramping up from there. Without realistic expectations, they will decide it doesn’t work and will quit,” Smithee says.

Independent jewelers like Tim Wright of Simply Unique Jewelry Designs in Yorktown, VA, have been reluctant converts in recent years. Wright says he realized in the past year that his company has to be searchable and sell its wares online. If not, he says, “We will go away like other independents in our area.”

It took time for Wright to wrap his head around the idea. “I cannot imagine people ordering jewelry, especially our one-of-a-kind pieces, off the Internet, but we are working on a new website to be more searchable and to be able to sell off of it. The basics we all have survived on over the years are not selling in the store anymore because of the Internet.”

Shane O’Neill, vice-president of Fruchtman Marketing, advises independent jewelers to temper their expectations when they turn to e-commerce.

Most jewelers are not going to see significant amounts of e-commerce, he says, because the marketing perspective is much different between traditional stores and online stores. “If they are marketing around a 20-mile radius, we still know that people want to touch and feel the jewelry,” says O’Neill. Plus the data that millennials don’t shop in stores isn’t necessarily true. They shop in bigger numbers than Gen X or baby boomers do. But they shop online with the idea of browsing and checking out pricing, and so they expect a shopping experience with all of the details revealed, O’Neill says.

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The preparation it takes to be ready for e-commerce almost certainly will result in increased sales in the store.

“They probably have checked all the boxes in terms of a good user experience, descriptions, photos, categories of metal type and have galleries of multiple products,” O’Neill says. “When someone comes to the website and they have the ability to have a great browsing experience, they make purchasing decisions based on that. When they stop in the store, you should have a higher closing rate. To me, that’s an e-commerce transaction, too.”

The website should be like your second store, O’Neill says, in terms of how you relate to the customer online: “How you flow people through your site is like what a sales associate does in the store.”

For Janne Etz of Contemporary Concepts in Cocoa, FL, e-commerce has grown steadily over the past two years from 35 percent of her business to a solid 50 percent. “You have to pay serious attention to it,” she says. “It is not a set-it-and-forget-it operation. What works with e-commerce this month will evolve into something else next month. It’s a constant learning process. I continue to study and learn and implement the newest techniques, so I can continue to grow!”

Stephenie Bjorkman of Sami Fine Jewelry in Fountain Hills, AZ, says an e-commerce-enabled website seems like a huge project, and it can be. But start somewhere, she says. “Just do it, or just do something,” she says. “Get ready to flip that switch. Take on little bits and pieces at a time and set goals. I am so far from anywhere near where I want to be, but my marketing department and I sat down and made a monthly calendar so that we could plan all of our marketing, social media, blogs etc.” Bjorkman’s team also worked on posting pieces for sale in groups of 24 at a time.

If even this seems like too much, start with making time for your own social media. Friend your top 100 clients and start from there.

“I think you need to make a plan, then work your plan,” Bjorkman says. “You can begin by doing this in the evening when you get home. Or have one of your employees spend an hour a day on it. The first step is that every day you should be posting on social media. Post real pictures and start creating your online image. Connect your posts to your website and tell them how to buy.”


Borsheims

E-Commerce Continues to Evolve in an Omni-Channel World

Borsheims of Omaha, NE, has been selling online since 1998 and today has seven associates dedicated to e-commerce.

“We’ve seen tremendous growth in the channel,” says Adrienne Fay, director of marketing and business sales — a 40 percent increase year over year in online sales for the past two years. This year that trend continued with a huge lift in January and February. The e-commerce staff is involved in navigation, digital photography, answering questions and virtually holding hands as needed. They also fulfill the orders — 99.9 percent of the inventory is in the store already.

In March 2018, the company introduced a new website that made online purchases easier on all devices, while updating their ring-builder tool to make it both more user-friendly and more luxurious-looking, says Andrew Brabec, director of e-commerce. “A lot of our customers will utilize their mobile device first and then make a purchase on their desktop. They prefer the process on the mobile device; it’s easier, faster.” Chat is used more than ever by customers looking for a promo code or to ask a quick question, but few purchases take much hand-holding.
One reason for that is that the new website is designed to anticipate questions that shoppers might have. Photographing jewelry items next to coins, for example, allows customers to gauge the size of the piece quickly and easily. “The main questions we get are: What size is this? And how does it look on someone?” Brabec says. One goal is to provide more views of each product.

“We try to replicate our customer service online,” says Fay. “It’s a strategic investment. We look at shoppers in an omni-channel fashion. Not as an e-commerce customer, not as a store customer. Simply a customer. We want to be able to knock their socks off in all channels.”

Shoppers who convert to online sales represent a wide demographic — established customers, gift shoppers, fine jewelry shoppers. Average order fluctuates, but recently it was $263. “We definitely have sold items that retail in the tens of thousands. Not every day, but it’s not unusual,” Fay says. Customers log in from all over the U.S. and the world; international checkout is available with exact pricing.

What’s next? Borsheims is testing out products to provide shoppers with 360-degree views of products, a technology that is increasingly common in other industries. Another huge goal is to get 97 percent of their products visible online; currently that number is about 74 percent. “We want to see more items in the cart, too, so we’re working on ways to up-sell in the cart by showing related products,” Brabec says. “In addition, we are going to evaluate pages to make them faster and more effective.”

The year 2020 represents Borsheims 150th anniversary. “And you don’t survive that long if you don’t evolve and grow and roll with the punches,” Fay says. “We used to say we at Borsheims are going to tell you as customers what you need to buy. Now we respond to what they are looking for with content and expertise and education.”


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Ringcrush

Growing Fast on Etsy

Bailey Lehrer founded Ringcrush, a start-up online jewelry store, selling $30 to $60 jewelry items on Etsy. She started the business with $700 and turned a profit immediately.
“We were able to grow in two years really quickly,” Lehrer says. “I did a little under $1 million on Etsy and another $300,000 on Amazon. It made sense for me to start up online. Etsy is really friendly to people who want to experiment.”

Lehrer says that while high-end diamond solitaires aren’t the norm on Etsy, moissanite rings are moving fast, as are other non-traditional types of diamond engagement rings, usually with an artisan design or a unique setting. “Etsy is primarily for 25- to 35-year-old women,” she says. “A lot of them still want that look and they can swap out the stone later. One of the most popular rings looks like a hand-carved band with a diamond solitaire in the center.”

Bailey Lehrer, founder of Ringcrush

The process of opening a shop on Etsy is easy, Lehrer says, because they hold your hand through the whole process. Still, there’s more to it than just opening. “You have to understand your competition and price point. It can be cutthroat with common items, and there are people from other countries selling items with razor-thin margins. You need something unique. That way you can raise your price.”

Her point of differentiation is pieces of raw gemstones. “So I still focus on precious stones like emerald and sapphire, but I’m able to sell them at $60 because I get them uncut. They’re still blue if it’s a sapphire; still green if it’s emerald. It’s kind of a unique aesthetic, so it’s easy to stand out.”

Another thing to keep in mind, Lehrer says, is that there is clear evidence shoppers will convert to making a purchase if the product is photographed on a white background. “Know how to take great pictures,” she says.


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Mullen Bros.

They Want to Be Your Local Jeweler, No Matter Where You Are

Bob Mullen is owner and founder of Digital Jewelers Academy, as well as an owner of the family business, Mullen Bros. Jewelers in Swansea, MA.

For several years, Mullen and his family pondered the “what ifs” and the concerns they imagined would come with e-commerce while they experimented with product catalogs on their website. “What about stock? What about if we sell things that are sold out? What about fraud? But it’s like having children: If you wait till you’re ready, you’re never going to do it.” In 2014, they began selling online through Shopify and realized $100,000 in revenue the first year.

“In terms of problems, the same things that I thought in my mind would be problems DID happen, but it was not that big of a deal to overcome them. In terms of inventory, it was about keeping things on the site that would be accessible and in stock, unless it’s something like bridal. We only work with designers who have products available that we can get quickly.
“Like anything else, there is no one thing that made it happen. It’s like Jim Collins wrote in the book Good To Great. You build momentum, and it gets easier and easier. It’s the trial and error of learning our audience, learning what they respond to, and looking at Google Analytics.”

Now Mullen, a marketing major in college, is working with other retailers on e-commerce goals. Digital Jewelers Academy, in partnership with Gemsone, administers a private Facebook group with instructional videos and an online posting service. “It’s about e-commerce, creating engaging content, Facebook ads, email strategy, website conversion.”

How much time does e-commerce take? “If you’re budgeting 10 to 15 hours a week of someone’s time, you can make a lot of progress if you know what you’re doing. You can be much more efficient in three hours knowing what you’re doing than 10 hours wandering around.”

Bob Mullen, owner and founder of Digital Jewelers Academy

“The No. 1 question I’m asked is regarding differences in inventory and pricing between the website and physical store. A lot of jewelers feel like they should treat the website like a separate store with lower prices to attract business. But unless you’re trying to build a nine-figure company, you should target a customer most like your own.

Mullen’s average ticket online is around $600, which is higher than in his store. “Our biggest sale was $17,000 and it goes down to $99 here and there. The sweet spot, like anything in jewelry sales, is $200 or $300. But the idea that people are just going online and plunking down 10 grand is a myth.”

The key to success is to provide the same level of service you do in your store. “In my opinion, I can service people a lot better than whoever is manning the call center at Blue Nile,” says Mullen. “You can sell an engagement ring in 10 minutes or have multiple visits over four hours in the store; online, it might take three to six emails. It’s about being proactive and being prompt about responding when people email.”

Local limits mean little when it comes to e-commerce, Mullen contends. “People respond nationally to the same things people respond to locally. Our industry loses 1,000 stores a year. When their jeweler closes, people have to go online or find another local store. More and more people are going online as a result, and are happy to work with a local jeweler, wherever you are. Meet them where they are.”


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SAMI’S FINE JEWELRY

“We Are Definitely on Our Way to Our Goal”

Last year, Stephenie Bjorkman of Sami’s Fine Jewelry decided that her website and online sales needed to be a priority. But she also knew it was tough, if not impossible, to find time to own the store, work with vendors, manage employees, pay bills, oversee marketing and launch e-commerce.
So she hired one person and then a second person to make it happen.

Stephenie Bjorkman of Sami’s Fine Jewelry

“The only way I could do this was to have a dedicated person to take pics, write descriptions, update events, blogs, social media and more. What is really scary is that I see such an importance in this job, I have already hired her an assistant.”

It hasn’t necessarily “worked” just yet, says Bjorkman. But it is working. “Since I hired devoted staff members, I have seen a 30 percent increase in online sales, along with tons of daily mentions in the store. All of this proves that in the end, having a marketing person is well worth it.”

Online, Bjorkman sells branded items, including her own Animal Rockz line, a custom sterling-silver line of jewelry available in 38 different pet breed varieties. “My store is full of animal lovers, so this is easy for us to be passionate about. We seem to sell at least one of these a day. Prices range from $35-$60 plus shipping. The magic numbers seem to be in the $250-$500 average range. But, with that said, I sold a $30,000 diamond off my website and a $25,000 estate diamond from my e-blast.”

Sales are considered and tracked as “online sales” if everything is done online.

“If you do sell it 100 percent online, you need to handle them like any other client. Answer quickly, make them feel special. We do chat by phone, by social media messengers, text them, and even send them videos. It is a lot of work, but the good news is that it works.

“Our e-commerce actual sales do not currently represent a large amount of my overall business. A two-year goal for me is to sell as much as having a second store. E-commerce also represents the best type of marketing you can do for your business. Long before you advertise in a newspaper, magazine, etc., you should take time to do your online marketing, social media, e-blasts and blogs.”

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