Brand Disaster: Hearts on Fire

Comments for this topic are now closed. While acknowledging this
discussion has been both interesting and controversial, JCK
believes it especially has emphasized the need to address the issue
of brand-retailer relationships in a broader editorial forum,
rather continue to debate what did or didn’t happen in this
particular instance. We therefore will be addressing the
brand/retailer issue in print shortly, and request that both
everyone who has posted on here as well as all retailers and brands
who have dealt with a similar situation, to please contact us
offline. Please contact me directly: Hedda Schupak, JCK
editor-in-chief, hschupak@reedbusiness.com, or (646) 746-6440.

Guiliani, you are a brand in your local area. Remember that fact,
advertise that fact, live that fact. I too think HOF is cash
strapped and I think is been since Vegas. I think they opened a ton
of jewelers this year in Vegas to utilize young receivables as
method of bolstering a line of credit. Do I have any proof of that
NO, but I heard from many HOF dealers that jewelers very close to
them (like blocks way) suddenly had the line "exclusive" well
blocks apart is not exclusive. Lines of credit on receivables
depend on receivables that are 90 days old or younger and you can
often get 50% to 80% of the value of the receivables in cash on the
line. So if you have a liquidity crisis open 50 new dealers at 100K
each, have young receivables of $5,000,000.00 to show the banker
and boom $2,500,000.00 to $4,000,000.00 opened on your line of
credit. I think many brands are doing this and its a pyramid that
will topple when lines get called in. Independent jewelers are the
reason brands exist not the other way around. If you have been a
good partner (and it sounds like you have) then you should be
treated as the partner you are.

If you don't get now that, like them or not (and they can be a pain
to deal with,) brands are the future and we will be irrelevant
without them then you had better think about another business. I
can't get Hearts on Fire right now but I know three or four of my
friends carry the line and they are very successful with it. I
don't hear about other brands doing the kinds of things for their
retailers that Hearts on Fire does. Should they also be a bank for
retailers at this time of year because they didn't do a good job? I
would worry about what brands would ever go into Ms. Guiliani's
store with what she is doing? If you have issue, deal with it
quietly. Don't announce to the trade that you are trouble to deal
with. There is no substitute for retailing 101. Stop looking for
vendors and brands to do your job for you.

oh...that sounds very familiar :)))) Thanks!

Sticker shock is the (negative) surprised feeling someone has when
they see the price tag of an item and feel that the price is
extraordinarily high...

What is sticker shocked?

What is sticker shocked?

Most brands in stores act as a sample line for special orders. Yes,
you will sell product over Christmas, but you will also have
special orders which could be held hostage. You almost have to
discount the line if you are only selling stock from your case and
not taking special orders. Watch out! I've seen some pretty grim
situations when brands turn on you. You don't want to be caught
waiting for that 20,000 special order ring Christmas eve, which
doesn't show up from HoF because they are mad at you.

Shanu, I think you should rethink your strategy! HOF is a powerful
brand, and a very honorable company. When I first carried the line,
it did not perform well for me, because I had sticker shock when I
looked at it. Once I realized that there are lots of customers out
there who want to express their love by buying the best, I started
to sell Hearts on Fire like crazy. Give you staff a pep talk, and
really spiff their HOF sales. The margins being as strong as they
are, you have room to give your salespeople a big incentive to sell
HOF. If your salespeople are selling emotion and perfection, your
customers will be thrilled with the purchase of Hearts on Fire, and
come back for more the next time they want to express their love.
HOF is an honorable company, and they may be getting swamped with
calls from panicked retailers right now. If I were you I would give
it my best shot thru the Christmas season, and if it does not work,
call them in January.

I dare you to put it on Overstock, with Levian.

....from above....You wouldn't want people to even think, "They
must be going out of business". That or insist on returning right
now for immediate settlement, then buy a performing line that you
can have in place in time for the season.

....from above....You wouldn't want people to even think, "They
must be going out of business". That or insist on returning right
now for immediate settlement, then buy a performing line that you
can have in place in time for the season.

What a predicament! But I might suggest you not throw the baby out
just yet. You're coming into a great(hopefully) time. People are
looking to buy. If your agreement does indeed prevent you from
discounting, or advertising a discount, remember there are other
things you can do. Gift with purchase. Free mountings. Get creative
and tune it to your clientele. If you have a written return
privilege and its not expiring, you could consider granting HOF the
flexibility to handle your situation later which will give you the
chance to enter the holidays with the merchandise and hopefully
turn some of it. Besides, sometimes it just takes time for a line
to catch on. If your cases are full right now, and you returned it
all right now, what are you going to do with all that suddenly open
space in your displays? Look empty at Christmas? That's not a good
image to send to the public, particularly when the media is full of
bad news. You wouldn't want people to even think, "

What a predicament! But I might suggest you not throw the baby out
just yet. You're coming into a great(hopefully) time. People are
looking to buy. If your agreement does indeed prevent you from
discounting, or advertising a discount, remember there are other
things you can do. Gift with purchase. Free mountings. Get creative
and tune it to your clientele. If you have a written return
privilege and its not expiring, you could consider granting HOF the
flexibility to handle your situation later which will give you the
chance to enter the holidays with the merchandise and hopefully
turn some of it. Besides, sometimes it just takes time for a line
to catch on. If your cases are full right now, and you returned it
all right now, what are you going to do with all that suddenly open
space in your displays? Look empty at Christmas? That's not a good
image to send to the public, particularly when the media is full of
bad news. You wouldn't want people to even think, "

I have had my share of brands and will never give any supplier a
monopoly over my business ever again. I will control the product I
sell or I won't sell it. I was a Hearts on Fire Dealer and in the
beginning, it was a very strong brand, but over time they used
their monopoly to demand more purchases, more displays, more
inventory. In the end it was no longer feasible to carry and we
began taking steps to leave the line. It took about a year after we
made the decision. I was on the golf course at a class reunion with
my lawyer and a member of my management team. We mapped out the
process and were able to replace HoF with private label brands
which gave us far better quality, margins, and much better quality
of life. No more rude calls from the likes of Tom Carlo. Eventually
they came down and wrote the check and took the goods. The 100k
means a lot more to you than to them. You need to make sure it
becomes important to them so you can get your money. This blog goes
a long way. Running a liquidation of the line using the internet
may also get their attention. The point is, you need your money as
quickly as possible. Look over the documents, but in the end, you
have the right to sell what you have bought however you want. The
documents cannot take your ownership rights away from you and if
you have paid for the product then sell it quickly. Personally, I'd
sell it in a major liquidation over Christmas. Advertise it and
push it in your market and make it a poison pill for other dealers
in your market. You do this and you'll get your check.

Did HoF make you sign any type of agreement regarding not
discounting or them taking the merchandise back? I don't see how
they can refuse to take merchandise back if you discount it, if
they agreed on return privileges. If there is a signed legal
document, both of you can be held to it. I -hate- lawsuits, but
that's what they are for. 100k worth of merchandise is a lot of
dead inventory to sit on when every single dollar counts now. This
sounds harsh, but I personally feel that if you are ready and
willing to burn the bridge and terminate all current and future
relationships with HoF, do whatever it takes to get rid of the
line. Call HoF over and over and tell them plain and simple that
you are serious about them taking back their line. I wonder if it's
possible to sell the line at cost minus 15% to a jewelry store that
IS selling HoF? Would HoF notice? Do they (can they?) monitor their
authorized dealers inventories? As far as I know, they cannot stop
you from liquidating it...but if it terminates some type of
business contract that MIGHT terminate your return privileges? So
in the end I'm back to my questions at the begining...study any and
all paperwork and legally binding documents governing the business
relationship. I hope this turns out well for you. (Oh, and don't
blame yourself for the line not selling, you seemed to have done
everything you could. Some communities and clientele just will NOT
spend the extra money for a branded pseudo-commodity. Even large
chains have stores that can NOT sell their branded diamond...just
like some people will never spend more than $30 on jeans or $25 on
a pair of shoes...)