Hasenfeld Apart From the Herd

Alexander Hasenfeld isn’t big on publicity. When discussing setting up an interview, he made it clear he wasn’t crazy about being profiled in a magazine.

But he does have, as he calls it, “an interesting story,” which involves coming to this country as a concentration camp survivor and turning his company into an icon of the American jewelry industry thanks to hard work, a reputation for integrity, and a striking ability to stay ahead of the curve.

Hasenfeld was born in Satmar, Hungary, to a religious family. In World War II he was sent to two of the most notorious Nazi concentration camps: Auschwitz and Dachau. Hasenfeld doesn’t like to speak much about his concentration camp experience, except when recounting how he was one of a handful of internees who participated in the camp’s underground economy. He worked outside in a munitions factory—where he lost a finger—and sold the suits taken away from other inmates to his fellow factory workers. He was paid in cigarettes, the camp currency, hiding the proceeds in his prisoner’s uniform. (He remembers the price: 150 cigarettes a suit.) “There were only three or so people involved in the business,” he says. “Just like in the diamond business, your word was your bond. It was very dangerous, but we had nothing to lose. We were brought there not to leave alive.”

Hasenfeld immigrated to America in 1948, speaking no English. Like many Jewish transplants from Europe, he went into diamonds. Shortly afterward, he met his wife, who, coincidentally, lived across the street from him in Hungary. “I knew her family,” he says, “but not her.”

Working as a cutter, he soon saw that cutters were a dime a dozen. “Everyone came and sold the same thing,” he says. “I wanted to separate myself from the herd.”

That he did. In an effort to get what he calls “every last drop of juice from the stone,” he realized that, if the stones were recut, he could make extra money. Today, this is standard procedure, but at the time it was almost revolutionary. “If I saw a stone with an imperfection, to leave it there would be a crime,” he says. “If it was an SI stone and I turned it to VVS, I could triple the profit.”

As more imperfect diamonds began coming Hasenfeld’s way, other cutters looked on in wonder as the stones he worked on got bigger and bigger. Eventually they figured out what he was doing. “I had about five or six years’ peace,” he says today. “Then they all emulated me.”

By that time, he had started his own business. Then, in 1950, he discovered he couldn’t walk. He had contracted tuberculosis of the spine, most likely from his time in the concentration camps. After he was sent to New York and later Denver to recover, his wife helped run the business, receiving special permission to enter the Diamond Dealers Club (women were then banned).

While recuperating in Denver, he kept doing business and even made local retail contacts. “I would visit them when I had my free time,” he says. “It started I could go out one hour, then it became two, three. So I went straight to the bank, and to my safe deposit box, and then I visited my customers.” He did the rest of the transactions from his hospital bed.

In the 1950s, he was one of a handful of diamond companies to explore what was then new territory: Asia. After finding an interpreter he clicked with—he “spoke English better than I did,” Hasenfeld says—he brought the man into the business, even giving him commissions on transactions he translated for.

For a spell, Hasenfeld’s company, Hasenfeld-Stein (Stein is his son-in-law), was America’s second-largest diamond exporter. Eventually his sons followed him into the business, although he insisted they all get MBAs beforehand. (“It gave them respectability,” he says.)

And yet Hasenfeld runs his business in a way they don’t teach in business school, but probably should: with a minimum of debt. “I never borrowed money in order to buy goods,” he says. “I still hold that philosophy today. We always stretched as far as capital allowed, but never beyond. My banker tells me I’m the only company that he never had to finance his sight.”

That turned out to be the company’s salvation during the great market crash in the early 1980s. “In those days people went bankrupt because the interest rate was 18 percent,” he notes. “We didn’t grab every last dollar. That’s why my customers stuck with us.”

Amid the wreckage of the early ’80s, the company saw that it was time to diversify. One son went into real estate, another went into insurance. His son Hertz, now vice president of the company, works with him in diamonds and is focused on U.S. retailers.

In 1991 the company became a Diamond Trading Company sightholder, a position it held until last year, when it lost its sight in the latest DTC “selection,” an event Hasenfeld is philosophical about. “It was only 20 to 25 percent of my production, so what did I lose?” he says, noting that, after the advent of Supplier of Choice and its miscellaneous requirements, being a sightholder cost him $1 million a year.

Meanwhile, the company keeps trying new ideas. Its New York factories employ a mixture of human labor and robots. “When I saw the machines were available, I jumped on it,” he says. And the company just introduced the Firemark Princess, the result of a new patented process that gives a princess cut the brilliance and fire of a round.

It’s a full plate for a person who has accomplished so much. But from all indications, Hasenfeld is still very much involved in all aspects of his business, using newfangled gizmos like e-mail and dealing with his company’s clients. (“There are some people who will talk only to him,” notes marketing director Steve Feldman.) He recently wrote in an e-mail that he prays for “a long life to enjoy all or some of the plans that I have.”

There are quite a few of those. Hasenfeld says his own father taught him to “never be satisfied with what you have. Always try further.” That has formed what might be called his business philosophy: “You shouldn’t imitate. If you have an idea, try it. If you don’t try, you never know.”

In an industry known for being stuck in its ways, that has set him far apart from the herd.