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Smooth Move

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Sinking traffic is telling you it’s time to move. But where? Free-standing stores and new ?lifestyle’ centers are options to consider, writes Donna Frischknecht.

A DIFFERENT LOCATION could mean more business. But where to go and what to look for? 

Location, location, location. It is almost an embarrassment to recite this decrepit old clich?. But there’s no denying the fact that where a jewelry store is located is just as important as the merchandise it carries. 

Keeping that in mind, when was the last time you examined the dynamics of the neighborhood you’re in and asked: ?Has business been steady?? ?What’s the potential for future growth?? ?Has there been an influx of more affluent businesses that would feed a jewelry business or has an exodus of such retailers left me singing, ?The cheese stands alo-o-ne‘?? 

Savvy jewelers always look for the red flag that warrants flailing arms and shouts of ?Warning, warning!? Two such signals that should definitely make a jeweler’s blood run cold: Dwindling traffic and a vacated anchor store that never gets replaced by mall management. 

Judy Goodman saw the warning signs more than a year ago when the strip mall their Hampton, VA jewelry store called home wasn’t doing the brisk business it once did.  

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The strip mall, like many of its genre, had lost its anchor and had not replaced it. Something had to give. Goodman & Sons Jewelers decided that something would be vacating the center for another location. 

?We didn’t want to leave Hampton, but we knew we had to get out,? Judy Goodman said.  

The couple didn’t look for another strip center ? instead seeing potential in a sprawling vacated restaurant. After doing their due diligence, the Goodmans realized they had found their new home. The property was purchased and this summer Goodman & Sons Jewelers will be enjoying its free-standing store with more than 50,000 cars passing daily on Coliseum Drive. Now that’s location.  

HAVEVISION

One of the key things in finding a successful location is not being afraid to try a new venue and to have vision. Goodman & Sons could see a booming jewelry business in what was a vacated restaurant and by having such vision they made the move from strip center to freestanding status.  

The move from malls to free-standing stores is a fast-growing trend ? one which allows jewelers to become more of a destination store and enables them to carry more product.  

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For Goodman & Sons, the move means a more expansive store (about 7,000-square-feet), with room to house a broader selection of luxury products including tabletop items for wedding registries.  

LOVETHYNEIGHBOR

Does this free-standing frenzy mean the death of the strip center? Patrice Duker of the International Council of Shopping Centers, New York, says no way. If anything, strip centers are fighting back, overhauling their tired image and making themselves a habitat for jewelers. Preferring the label, ?neighborhood centers? to ?strip centers,? these smaller, convenience-oriented sites often featuring grocery stores are looking for ways to add more entertainment to the shopping mix by signing leases with bookstores, specialty food shops and movie theaters. Cosmetic touches such as outdoor eating venues, fountains and gardens are other additions developers hope will help improve the image of the neighborhood center.  

In essence, what these smaller malls, averaging anywhere from 30,000 to 120,000 square feet, are trying to do is emulate the success of lifestyle centers ? another viable option jewelers should look into, real estate experts suggest. 

NEWLIFESTYLES

The ?lifestyle center? ? open-air complexes featuring upscale specialty retailers ? has been around in one form or another since the Country Club Plaza in Kansas City opened in 1923. However, to date, there are only 100 of these affluent shopping complexes sprinkled nationwide, compared to the 1,130 regional malls in operation. A majority of these specialized malls opened during a growth spurt between 2002 and 2003. That growth spurt will continue, real estate developers said, with lease space in lifestyle centers expected to double over the next few years.In comparison, only 19 regional malls will be built from 2003 to 2005, according to the ICSC.  

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?Lifestyle centers are still in their infancy,? said John Bacon of Red Development, Scottsdale, AZ. Red Development, founded in 1995, specializes in lifestyle centers. Jewelers who have gone the lifestyle route, like Sartor Hamann, the five-store Lincoln, NE-based chain, has seen positive results. The jeweler, according to Bacon, signed a lease in one of Red’s projects, the SouthPointe Pavilions in Lincoln, six months ago and has been reporting good business.  

BETTERBUYERS

A jeweler operating in a lifestyle center will get a prime customer for his or her goods.  

?They tend to bring in a more moderate to upper-end customer,? said Karl Ehrlick, head of leasing, Ben Bridge Jeweler, Seattle, WA.  

According to ICSC, the median age of a shopper in a lifestyle center is 39. These older shoppers are more affluent ? with a median household income of about $85,000.  

It helps, too, that these centers are built in and around the nation’s most affluent pockets. In Macomb County, MI, for example, ground will be breaking this fall for a lifestyle center built on a 70-acre development that used to be a golf course. In addition to the shopping center, more than 360 single-family houses in the $300,000 to $400,000 range will be built.  

Higher incomes and a more mature consumer are not the only things that make lifestyle centers stand apart from strip centers or regional malls. 

Jewelers need to realize, too, that the shopping patterns for these centers are different.  

On average, a lifestyle-center shopper will spend about 57 minutes compared to 78 minutes shopping in a regional mall. The shortened shopping time confirms what jewelers are catching on to: customers don’t have much time to shop. For a jeweler in a lifestyle center, shopping is a specific task and a customer is seeking that particular vendor for a specific reason.  

MOREADVERTISING

Jewelers in a lifestyle center or a freestanding store can expect to pay more in advertising, location experts cite.  

?You have to increase advertising budgets two-fold from a mall store to get the traffic,? Ben Bridge’s Ehrlick said.  
Average mall advertising expenditures for jewelers is about 2% to 4%; while lifestyle center expenditures average 6% to 8%.  

Some say, however, that the supposed advertising advantage of mall jewelers doesn’t really exist. Robert Rottenberg, president of Long’s Jewelers, Burlington, MA operates a freestanding store in addition to several mall locations and has been playing the retail location game since the late ?70s. Rottenberg said that, in theory, the idea was that the mall retailer would pay more in rent and less in advertising, depending on the mall to drive traffic with its publicity. What happened over time, though, is rents crept up and competition intensified, forcing mall jewelers to increase their ad budgets.  

?We find ourselves paying from both ends,? Rottenberg said. The good news is that the high rents brought the reality of owning a free-standing location within reach of jewelers like Rottenberg.  

LUXURYCLUSTER

Location is not about being a trailblazer and setting out for the unexplored lands. Location means going with the action is.  

?Jewelers need to cluster with other high-end retailers,? said John Corritore, president of The Corritore Company, Scottsdale, AZ, a specialty retail brokerage firm catering to the upscale market. ?For a retail jeweler, out of sight can mean out of mind. Being in or close to a lifestyle center can mean more business,? Corritore said.  

Where to locate, though, is never cut and dry, says ICSC’s Duker. ?Every retailer needs to look at their format and their core customer. It really depends on demographics.? 

Duker encourages retailers to ask the following questions: ?How easy is to get to the store?? ?Is there a master plan in place for the center or mall or community that shows future growth?? ?How is the economic base??  

And, she adds, don’t be afraid to look at different formats and locations. Rottenberg is doing that with the Long’s Jewelers chain.  

Come fall, the jeweler will be opening in a 40-story office building in downtown Boston’s up-and-coming financial hub.  

?This is our most interesting move,? Rottenberg said, explaining how the area is being redeveloped with an underground highway, leaving room on top for high-rise residential buildings and a new park that will replace what was the existing highway. ?We have been out of Boston for years and found that this was the place to be,? he said.

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