BY KATE PETERSON

Tony Alessi was an experienced retail professional. Recruited from his position as the manager of a high-line mens’ clothing store, he had been an assistant manager with Guilson’s for three years. He was happy working in the chain’s flagship store in the Midwestern city he’d called home, but was even more delighted to accept the company’s offer of a job as the manager of their newest store in a small town several hours away. Over a six year period, Tony took that new store to over $3 million in volume, promoted two of his assistants to store managers for the company and even got engaged.

It was an unlikely match. Angela had been the manager of the jewelry and gift boutique in the Grand Hotel, the town’s only luxury hotel for 13 years when she met Tony at a chamber of commerce event. Tony talked with his district manager when he and Angela began dating, explaining that he didn’t see Angela or her small gift shop as a competitor, since the store sold mostly costume jewelry and some small fashion pieces in gold and silver. His district manager reminded Tony of the company’s confidentiality policy, but saw no conflict between Tony’s job and his new connection to Angela.

Over several years, as their relationship developed, Angela got to know the crew in Tony’s store, and even met members of the company’s senior management team. She began to use the contract jeweler in Tony’s store for occasional sizing or repair jobs, and was in and out of the store frequently. At the same time, Guilson’s business was growing exponentially. Years of effective marketing, smart product choices, top quality service standards and meticulous execution pushed the store to the top of the market, and more and more people from throughout the region were finding their way to the store. As he and Angela planned their wedding, Tony was happy with his life – both personally and professionally.

At the same time as traffic in the store continued to increase, and their closing ratio in most categories was high, Julie Sanchez, Tony’s assistant manager, couldn’t help but notice that they were having a much harder time with diamonds over a carat and a half. In that range, it wasn’t at all unusual for the store to sell a mounting for a diamond that the customer had purchased elsewhere. When Julie asked where people were buying their larger diamonds, she most frequently heard “I bought it online” or “from a friend in the business.”

One day, about a month before Tony and Angela’s wedding, an older woman came into the store looking for a nice watch for her grandson’s college graduation. As Julie was working with the woman, she noticed the beautiful ring she was wearing – a solitaire that Julie estimated at a minimum of three carats. Julie commented on the diamond and offered to clean the ring. When she handed the sparkler back to the woman, she asked where the diamond had been purchased. The woman replied, “My husband got this one for me for our 35th anniversary, over 10 years ago. He bought it from that nice lady in the little shop in the Grand Hotel.” She then added in a conspiratorial whisper, “You know, she keeps all the real jewelry in boxes under the counter. I haven’t been over there in years – but back then, my husband said she was the best kept secret in town.”

Julie had to work hard to contain her shock. After the woman left, Julie thought about what she should do next. She wondered if Angela was still the mystery competitor in the market, and thought about how much Tony might know about the business. After several hours of mulling it over, Julie decided that her only choice was to take the story directly to her district manager, and to let him decide whether or not to confront Tony.

After hearing the story, Guilson’s district manager decided to send a secret shopper into Angela’s store, presumably on the referral of a friend in town. The man had no trouble at all getting Angela to show him a several diamonds in the two-carat range, each of which was certified and each of which was priced well below Guilson’s lowest possible price. When asked about how she could offer such low prices, Angela told the shopper that she had been buying diamonds from private sellers for years, and since she ran a cash or check only “personal referral” business, she was able to take a much lower markup than traditional stores.

The BIG Questions
What should the district manager do? Guilson’s company manual describes their confidentiality policy in detail, but says nothing about employees dating – or marrying competitors. Is this an integrity issue? Can he legitimately force Tony to choose between his wife-to-be and his job with the company?
Comment below (please leave your name and store) or at realdeal@instoremag.com.

ANSWER VIA EMAIL