All in the Family

It may be one of the best-kept secrets in the jewelry industry. But now the venerable Leading Jewelers Guild (LJG), which describes itself as “a family of family jewelers,” says it is poised to let the industry know of its success.

“We’re looking for new members,” says Don Ritchie, president of Harry Ritchie, a 28-store operation based in Eugene, Ore. “There’s a formula that will allow you to conceivably double your sales, yet people are skeptical. They think there’s some hidden agenda, [but] it’s for real. You’d think there would be a three-year lineup for what we have to offer. It’s like it’s too good be true. I’m a believer.”

Ritchie’s second-generation family-owned business has been in existence for 47 years, and an LJG member for 44 of them. He credits much of the business’s success—including its expansion from a one-store operation to owning stores in the Oregon, California, Washington, and Idaho markets—to the LJG organization.

“I attribute our ability to grow and survive to Leading Jewelers,” he says. “Its marketing and promotional programs and its support allowed us to replicate our model in different areas. We deal in smaller communities. We can dominate. We have a very professional appearance to the public in every aspect.”

And, he adds, “I can apply this model across the country.”

Leading to success. The Leading Jewelers Guild, a Los Angeles-based cooperative of independent jewelers, was formed in 1955 and incorporated in 1958, explains LJG executive director James “Jimmy” West. In its heyday during the mid-1980s, the organization had about 44 members operating about 220 stores. Today, the organization has 26 members who operate 150 stores. About 75% of LJG member-stores are in malls, 15% in strip centers, 4% are “superstores,” and 7% are located in downtown areas.

Even with the decline in membership, members tend to be loyal, with the average member remaining in the organization for nearly 20 years. One original member is still with LJG. When people leave, often it’s because their business grew so large—thanks to LJG—that they outgrew the program.

Monthly membership dues cover the salaries of West and an eight-person staff, the LJG offices, and the support the group provides. If there is a large enough balance at the end of year, members do not have to pay the last month’s dues.

“Each [jeweler] owns one share of Leading Jewelers, so it’s not a third-party or outside entity—all of it comes back for the jewelers,” West explains. “They pay for the program that they use at our cost.”

“We are a truly democratic organization,” he continues. “All decisions of the group are made by committees of our members.”

Being a member of the group means having access to a number of merchandising, marketing, and branding initiatives; life insurance; credit card services; and legal advice. Most of the programs are optional for members.

The love story. Among LJG’s initiatives is the Love Story diamond brand, a unique “turnkey” selling system that was awarded a U.S. Patent. The system is based on the some of the best-known love stories—Romeo and Juliet, Clair de Lune, Orpheus and Eurydice, Tristan and Isolde, and its latest addition to the series, Antony and Cleopatra.

The stories help a would-be groom propose to his intended with a message that goes along with the jewelry. The groom has a choice of diamond and 14k gold rings with an engraved heart inside the band under each love story heading, along with a specially designed card and other support. With this system, in addition to the rings, LJG jewelers receive a video training program for sales staff, signage, displays, radio and TV spots, and other special promotions.

The Cleopatra’s Passion collection includes a 107-facet princess-cut diamond in a 14k gold band. “It’s a beautiful, brilliant, specialty-cut diamond in a designer setting,” West says. “We have recently introduced a specialty round cut and a marquise cut.”

And of course, when a large group purchases jewelry for a branded program—with little overhead cost—it can negotiate a price far lower than if individual jewelers had to do it themselves.

“We negotiate for merchandise at the lowest price possible,” West says. “They have the ability to advertise aggressively, and because of that they can make a higher gross profit and have a healthy return.”

Sid Sather of Sather’s Leading Jewelers, Fort Collins, Colo., is a single-store operation entering its fourth generation. He says LJG’s buying power and marketing vehicle keeps his business profitable.

“Being a one-store operation, I couldn’t buy at these prices. I couldn’t sell at these prices. For us, it’s a very strong necessity and asset.”

The catalogs. In addition to its Love Story brand, LJG is best known for its catalogs. Some in the industry even refer to LJG as “the catalog group.” It remains the “glue” of the LJG, West says. LJG produces up to 12 catalogs each year that its members can choose to use or not use, and they can have them customized to meet their specific needs. The catalogs are sent to the jeweler’s customers, and members can even have the LJG staff design a catalog just for their store.

Sather uses the catalogs and other marketing tools to project a particular image to the customer.

“It does so much,” he says. “The beauty of it is that we need to project to our customers perceived quality and value. By having Leading Jewelers’ catalogs, we have that. They have beautiful artwork, and the prices of the items are printed in the catalog. The perceived value is there. They just walk in the door, point at it, and it’s what they want.”

He also notes that few customers know—or care—about their LJG affiliation. “I don’t think it’s important to them. I project my name, image, value, and quality. They don’t know the name ‘Leading Jewelers Guild.’ They know the Love Story [line]. They know the watches that I sell. They know me by products, but they really don’t care that I’m part of any organization.”

Caring and sharing. LJG members not only are family-owned jewelers but also consider their cooperative a large extended family. All members must meet twice per year—in March for an educational meeting and in July to focus on the fourth-quarter buying season. These meetings take the form of trade shows, with manufacturers and wholesalers competing for their business, and plenty of ways to share ideas.

“They are required to attend both meetings, and many members build their vacations around the Leading Jewelers meetings,” West said. “They can talk about their challenges and ideas and really share freely among themselves. It elevates their self-esteem and their self-respect. And they talk throughout the year, helping one another with challenges.”

Committee meetings also are held throughout the year.

Ritchie says he looks forward to hearing the ideas of his peers. “The best part of Leading Jewelers is that the other members come with an enormous amount of ideas,” he says. “And they’ll share everything with you. It’s incredible. There’s nothing we don’t share, including our children. [Some owners’ children work at other members’ stores to get a different perspective on running a jewelry business.] It’s like a club. It’s really neat.

“If we hadn’t grown to 28 stores, I would still need Leading Jewelers—as much as if we had two stores,” he adds. “I get as much quality information from a one-store operation as a 28-store operation. I’m a second-generation jeweler, and we’re passing our business on to the next generation.”

He also notes that with LJG, he will try to achieve his next goal of being the top credit jeweler in the United States, noting, “I feel we are the No. 1 credit jeweler in the Northwest.”

That “caring and sharing” includes helping other members when they are in need, Ritchie says.

“There is a particular culture here,” he says. “A family culture. And we support each other when members are in trouble. We’ve flown to other stores to see what we could do [to help]. Our culture is one of caring and sharing and truly being part of a family, and if something bad happens we really try to save them if we can. For years, nothing bad ever happened, but in the last five to 10 years everything changed, and some people became more vulnerable. [As in other industries], there are a few that need help. But I bet you our batting average in the group is better than most.”