On a sunny afternoon in early February, I had the privilege of sitting down with eight Los Angeles–based retailers and designers at the Avalon Hotel, a mid-century gem in Beverly Hills, for a candid, two-hour talk about the state of the fine jewelry business. The spirited, thoughtful discussion touched on a range of topics, from holiday 2011 sales, to the lasting lessons of the Great Recession, to the dire need for more effective sales training. But we always returned to a simple idea: our singular passion for jewelry.
Fittingly, everyone wore their favorite pieces that day, turning the conference room at the Avalon into a veritable catwalk of top jewelry trends. Designer Erica Courtney donned her “Drop Dead Gorgeous” best: a fiery mandarin garnet pendant on an exquisite yellow gold chain. Moondance Jewelry Gallery owner Orly Ohebsion looked impossibly chic in a gold Hermès Medor watch, offset by a couple of Cartier Love bangles. In layered rose gold chains and pendants, Tamar Kelman was a walking advertisement for the sweet, vintage-inspired Arik Kastan designs she represents, while Lisa Marie Todd showed off the lacy gold earrings of her signature fine jewelry line. Roseark owner Kathy Rose embraced a more-is-more mentality with armfuls of Zuni turquoise cuffs and gold and silver snake bangles, topped by a voluminous gold necklace that recalled a shiny breastplate; her husband and business partner, Rick Rose, meanwhile, was the epitome of classic gentlemanly style in a crisp navy suit, accented by a thick gold wedding band and a handsome rose gold Officina del Tempo watch. Sarah Leonard Fine Jewelers’ co-owner Gail Friedman wore a simple pendant crowned by an utterly brilliant 3.06 ct. diamond specially recut for her by master cutter Gabi Tolkowsky, and her husband and co-owner, David Friedman, sported, among other pieces, an idiosyncratic ring featuring an elongated emerald-cut diamond in a platinum and black jade mounting. “The diamond was my mother’s,” he pointed out. “She’s still alive. But she figured rather than waiting until she dies, she’d be happier watching me wear it.”
Lisa Marie Todd
JCK: Let’s talk about 2011. How are you all feeling about the past year?
Erica Courtney: We had a great year, but it was still a roller coaster ride. I was fortunate I didn’t plan any trunk shows in December—I heard people’s Decembers were really soft.
Tamar Kelman: We’re still small and young, and we’re blissfully ignorant about what it could have been 10 years ago. It’s probably a slower growth pattern than it would have been in a better economy, but we are seeing growth.
David Friedman: Sales were up for the year, and we’re very pleased. The Christmas season was relatively flat. We found the five-figure, six-figure customers were strong; the low end—the under-$500 category—was strong; and the middle-end fashion category was a little soft, which was unusual. But overall, we definitely had a good increase over the year before.
Gail Friedman: We noticed, more than ever, engagement rings for December. We’re a big engagement store. We do trunk shows all year round; we do private events. We do more events than we ever did in the past 30 years. Business definitely has changed.
JCK: Orly, how was your holiday?
Orly Ohebsion: It was good. [To David] When you say up, do you mean up from last year or up from the best year you had?
David Friedman: Not up from the best year we had.
Ohebsion: Right. It’s not 2007 numbers. Everyone’s missing those numbers, right?
David Friedman: Out of our 65 years in history, 2011 was probably our fifth-best year. But we’re not complaining. The kids are still going to college.
Ohebsion: We’re up from last year significantly, but we’re not at our best numbers—that time when people walked in and plastic was king and they were high on something. People are thinking longer. It takes more clienteling to sell something significant. But it was a good December nonetheless. A lot of new vendors came in, and they did well. People like newness.
Lisa Marie Todd: Gosh, I wish I was around in 2007. It sounds so wonderful. [Everyone laughs.] For me, it’s relationship building with the customers, be it retail or wholesale, letting them know I’m here, and I’m not going anywhere. I have two lines going, the smaller fine jewelry line, $500 to $10,000, and I have the lower price-point line and so during the holidays, I kind of got those two ends. And you’re right, it’s weird.
David Friedman: The disappearing middle class…
Roseark owner Kathy Rose, JCK editor in chief Victoria Gomelsky, designer Erica Courtney, and Tamar Kelman, whose Arik Kastan line is stocked at Roseark
JCK: Kathy and Rick, how did your holiday business go?
Kathy Rose: It was the slowest month ever.
Rick Rose: Then 10 days before, it kicked in and it’s continued. Because we also manufacture our own jewelry, we deal with wholesale. We’re also dealing with two sets of clientele, the Westside and the Eastside, and the world. That’s the core of our business: outside of L.A. Our stores [are] two completely different animals. Then the Web—our website is strong.
JCK: I’d love to hear more about the toll these past few years have taken.
Gail Friedman: None of the recessions have ever affected us, but this one did because it was a very different animal. People are much more careful when they buy things.
Ohebsion: I think it’s technology. [She points to her phone.] Having this in the palm of your hand and knowing what your stocks are valued at every minute of the day. The husband goes in the bathroom in the morning and comes out and says, “We’re down. Don’t buy anything.” That’s a new thing.
Rick Rose: We’ve been in this business long enough to see a lot come and go. The strong survive and here we are, talking about all of this. It’s positive that everybody saw these upticks.
JCK: For all of you, what, specifically, has been working? What’s really resonating with your customers?
Courtney: For me, I can easier sell a $50,000 ring than a $10,000 ring. Much easier. It’s collectible, it’s probably got a special stone and a story. It’s not just a ring. Recessions had never affected me because all my clients had money. But this time it did and the only thing that got me through was really collectible stones, where they could really see value in it, and at least it was worth something.
Kelman: Our line is vintage-inspired, and it’s rose gold and between those two elements, in L.A., though it might not seem that way, it’s actually a very niche market. So we’ve been working to find out who our customer is and being successful with them. The ones who love it collect. They have multiple pieces. There’s a freshness to the collection that really resonates with our customers. And we’re affordable.
|Above: Roseark retailers Rick and Kathy Rose; Moondance Jewelry Gallery owner Orly Ohebsion and designer Lisa Marie Todd; below: Sarah Leonard Fine Jewelers owners David and Gail Friedman; designing women Erica Courtney and Tamar Kelman|
JCK: David and Gail, what about your non-bridal business? What’s working there?
David Friedman: Repeating what Erica said: one-of-a-kind pieces, estate pieces—that’s very strong. It’s a huge business for us. The worse the economy gets, the more estate jewelry I’m buying. People are desperate for cash. And they are happy because I write checks. Not only can I buy things for way less than I could five years ago, I’m buying wonderful things.
Gail Friedman: It’s the banana theory. You buy bananas for your kids and they eat them all up. You buy them again and they eat a few. You buy them again and they’re just sitting there. It’s kind of the same thing with jewelry: There are certain lines you have to keep changing up. You have to rotate lines, change places in the store. We re-merchandise a lot.
JCK: Orly, what has worked well for you?
Ohebsion: The opportunity to offer newness. For our repeat client base, they walk in every time they go to yoga, and if they see the same people, that’s not good. A lot of memo goods are in; designers are taking pieces and letting us do a shuffle, trade out. I think the only business where you can reorder again and again is when you’re selling to tourists—people you’re never going to see again. If you’re in a neighborhood, a store that’s been there forever, you need to offer them new. That’s what we’ve really focused on in the last two to three years.
Todd: The things people are coming back to are the personalized pieces, things that have meaning, the letters. I have a number of collections where people start buying multiples. That’s been nice to see. And the price point is in high-karat gold and in silver, so it’s accessible to everybody.
JCK: Kathy and Rick, what’s worked well for you?
Kathy Rose: Arik’s pieces are great, well-priced. Our own pieces, the snakes and eagles. People are always asking, “Do you have another animal?” A lot of rose gold and yellow gold.
JCK: Lisa, what’s been working for you?
Todd: I’m working really hard to make sure people know my line. My horror story: My lawyer walked into a very well-known store that I was in and said, “Is that Marie Todd?” This piece is distinctive; it’s not just another cross. And the sales girl goes, “Nah, it’s somebody else.” She named another designer. And he goes, “I’m pretty sure it is Marie Todd.” And she said, “You know, after a while, all the stuff looks alike.” That’s a lose-lose for everybody. The store owner just lost a customer. I just lost a sale. So it’s really important to me that I find out who their best salesperson is and get a rapport with them. I’m really taking the time to educate.
Courtney: Welcome to the jewelry business. I only see people making excuses for their salespeople.
JCK: So is that the biggest challenge? Educating salespeople?
Rick Rose: We carry so many lines and it’s a challenge for us to keep that education. I’m educating my employees on a line that I’m just learning.
Kelman: I get emails from a store asking, “What’s the carat weight on this and what’s that?” If I’m driving and I get this, I’ll pull over and reply because I assume there’s a customer waiting, and it’s my job to support that retailer and give them whatever information they need.
Rick Rose: Because if we’re inquiring, it means they’re standing right there.
JCK: I’m curious, how do you come together as retailers and vendors?
Kelman: From day one, I was just reaching out to stores that I wanted to be in—and being smart about not saying yes to every opportunity, because it might not be the right opportunity. Understanding what other lines they carry. Where would I be in that space? Who are their other customers? A lot of time spent researching. And as you spend more time with this, you know who the retailers are and you know who’s a good fit.
David Friedman: We’re always looking for fresh things to keep our customers excited. We go to Vegas, to Centurion; we’re always looking for the new trends. We also research the vendors as well. We know what kind of proximity they have. Some of the vendors have retail stores and they’re close to us, so there’s no point. Why do I want to carry 5 percent of the line when it’s all there?
JCK: Do you all go to the shows?
Ohebsion: I go to the shows. But people call and email all day, every day. And it’s all on our website; this is how you reach the buyer. I’m kind of shocked how many people call.
David Friedman: A lot of vendors are doing what they call “JBT shopping,” just looking for the highest-rated jewelers all around the country. I tell Gail, “If we don’t pay our bills for six months, you won’t get any more calls.”
Gail Friedman: Sometimes it’s pretty obvious they don’t know my store. Did you even go to my website?
JCK: How about you, Kathy? Are you always looking for more designers?
Kathy Rose: Always. We have some of the trendy lines, but we try to stay obscure so they’re not saturated everywhere. And travel is a big deal. We have a designer who carves swords outside of Chicago. He’s a sculptor—I love that; they’re wearable pieces of art.
Rick Rose: But it’s difficult now because everybody and their mother is a jewelry designer.
David Friedman: And the mother’s got really bad taste. [Everyone laughs.]
Rick Rose: That becomes an issue. We’re receiving 100 emails a day. My favorite is an email with the subject “Designer + store,” and it makes you open it up. I’ve been getting these emails that say “Designer + another store in L.A.” I open it up and it says, “Dear Rick and Kathy.” And they’re out because we’re not the other store in L.A. We’re Roseark and your copy and paste didn’t work. If it’s going to be personalized, it’d better be personalized.
JCK: That brings us back to the idea of technology. These days, people are able to shop online and in the store all at once. How does mobile commerce affect your business?
Courtney: I try to make my pieces as one-of-a-kind as possible to protect my stores. So you can’t really price-shop my things. Now with the Internet, we’re having to protect our stores from different states.
Rick Rose: But it’s great you’re doing that for your stores. Because it’s very easy just to sell it. We spend time cultivating it, showcasing it, getting press, and then to go direct to the designer, which is so easy now.
Courtney: It always was easy. If you’re taking care of that customer, you’ll sell 10 pieces before I can get to that customer again. I don’t want that customer.
Kathy Rose: Plus, I guarantee that client that’s calling is a total high-maintenance client.
Gail Friedman: Tacori used to have this concierge service where people could call and ask questions. And they stopped that; they didn’t realize how much time these customers would take. It’s a whole different animal. But with designers—you can’t have your cake and eat it too. You can’t sell to our customers. Because why are we stocking it and showcasing it?
David Friedman: But generic diamonds are a pain in the ass. I almost say, “Buy it on Blue Nile.” I’d rather make keystone on the mounting.
JCK: So what are you doing about diamonds?
David Friedman: We’re buying a lot of old miners, old European stones that are badly cut. Cutting them into triple EXs. I bought a brooch off the street that was beat to hell. I paid very little for it. I took the two diamonds out. I sent one to Yuri downtown. It came back and Gail said, “This is beautiful. Let’s keep it for one of our daughters.” I sent it to GIA and it came back VG, VG, VG, VVS2, D. A 2 carat on the Rap sheet was $40,000 a carat for the one stone. I sold it to a wholesale diamond dealer in Chicago for a lot of money.
JCK: I’m curious about what you’d like to see change in this relationship between retailers and designers. Any parting thoughts?
Kathy Rose: I love Erica Courtney’s selling $50,000 rings story. It’s so true.
Courtney: I’m not afraid to show you something for $50,000. And when I think about it, I don’t think about it as $50,000. It’s a ring that you might love.
David Friedman: Which is difficult when you’ve got a 22-year-old behind the counter. I tell them always use the word only. “This is only $50,000.” The word only is very helpful.
Courtney: I don’t sell carat weight. When people say, “Tell me about the ring,” I say, “Isn’t it gorgeous?” Sometimes store owners get a little nervous. I say: Be brave. Sell what you love. I think owners think they’re selling necessity jewelry, so it must be so worth it and so above what they’re paying for it. It’s just not true. You’re selling gorgeous.
Gail Friedman: I have a question: Do you think the customers are different now? Because I feel like they’re very different.
Ohebsion: In the beginning, it was the oddball who’d ask for a discount, and you’d hope they never came back. In the middle it was more of that. And now, it’s more often than not that people ask for something off. And they feel like if they don’t ask, they’re losing out. It’s navigating that with finesse, and how to not make it into a swap meet downtown.…
Courtney: The best line I ever heard is: “I just don’t have that much wiggle room on this.” And give them 5 percent or even 10, because other stores are.
Kathy Rose: [Turns to Erica] You have to come to the store and train everyone.
Gail Friedman: People are more demanding. They want something right now. They’re entitled. I think it’s a whole different customer. I’m not talking about our longtime customers, but the newer ones.
Todd: Their psychology has been altered by the Internet. That’s what’s training them so they’re going to the stores.
Courtney: And the mean ones—you need to get out from behind that case and get next to them, I mean touching, shoulder-to-shoulder. “What are you looking at? Show me.” Because I think we’re so impersonal. I think people are lonely.
David Friedman: You want a parting thought? Our easiest sale and our biggest profit margin in history is watch batteries. [Everyone laughs.]