CORAL GABLES, FL
30%
2005-2007
By 2002, Montica Jewelry in Coral Gables, FL, was on the “brink of disaster,” says owner John O’Rourke.
The business, which had started as a wholesale operation in his wife’s family home two decades before, had been wallowing in stagnant growth for seven years. Turnover was down from its one-time peak of $2.5 million, margins were under pressure, and the business’s reliance on too few customers had left it exposed when those clients, many of them from Central and South America, ran into trouble.
“We put too many eggs in one basket,” recalls O’Rourke.
O’Rourke, a former investment banker who joined the business in 1995, and his wife’s family decided that if they were to stay in jewelry, they needed to go retail.
The decision proved to be the right one. Montica Jewelry quickly returned to a pattern of double-digit growth, and in January 2006 the business moved from its 11th-floor office-tower location to a new 2,200-square-foot store in Coral Gables’ toney Miracle Mile retail district. Sales surged 15 percent that year, followed by a further 13.5 percent in 2007, bringing Montica up to the level of a “modest seven-figure store,” O’Rourke says.
Until very recently, much of that growth had been driven by event marketing and public-relations activities. Kept out of the more traditional advertising media by their prohibitive costs in this part of South Florida, the store had to find other means to raise awareness and get customers in the door.
Typical of Montica marketing efforts was an American Cancer Society fund-raiser in March, with people who made a donation to the charity receiving a gift certificate from the store of up to $100 in value.
Another program involves linking up with partners in an array of local businesses, including florists and hotels. In the case of the florists, Montica’s used a gift book designed by the Porte Marketing Group, which included a $50 gift certificate package to any consumer who spent more than $100 on flowers. “Having this program in the hands of 10 to 20 local florists can provide us with a steady flow of new customers every day of the year,” says O’Rourke, adding that his sales staff typically upsells three out of four gift-certificate customers.
Other areas that have helped the bottom line are a better performing stable of brands — including timepiece heavyweights such as Tissot, Raymond Weil and star price-point performer Festina — and fatter margins on diamonds.
Diamonds and diamond jewelry account for almost two-thirds of Montica’s sales although it is only in recent years, thanks to closer ties with sightholders, that loose stones have made much of a contribution.
The former banker says his background had allowed him to introduce a certain financial discipline to the business. He reports to a board of advisers, and is constantly meeting with suppliers to discuss product mix and marketing ideas.
Montica’s is again aiming for about 15 percent growth this year, but most of that is expected to come from a switch away from PR activities to a focus on better servicing existing clients. The slowing economy was one reason, the intense competition to stage and take part in community events another, says O’Rourke, who competes with 19 other jewelers within a one-mile radius of his store.
Montica’s answer to this challenge was to take a lead from the restaurant industry.
“We’re really a service industry. People come to us to make themselves feel good by buying something for themselves or someone else,” he says.
“In the restaurant industry you walk in and they ask if you’d like the special of the day. That’s what we’re doing. We print up high-grade cards and tell our clients what’s happening, what the ‘Special of the Day’ is. It might be the Month of Diamonds, a month for another stone, or Appraisal Day, where they can come in for a free appraisal. We tell them metal prices have changed and their jewelry might be undervalued for insurance purposes.
“Our closing ratio is 85 percent so for us the No. 1 thing is to get more people in the door. Then it’s a matter of how you go about that.”
