Jewelers Defy the Downturn

Tracy Martin, owner of Martin and Son Jewelers, in Metuchen, N.J., admits to having second thoughts about moving into a new, far larger store during the worst economic downturn in recent history.

“I thought, what am I, crazy?” she recalls. “But then I really sat down and gave it thought and discussed it with my family, and we just decided let’s go for it. The economy is not going to last like this forever.”

The new store kicked off in grand style, with an opening party stacked with food and drink and packed with people.

“It just made people happy in a difficult time,” Martin notes. Better yet, it made them open their wallets. “Opening up, we had a great reaction,” she says. “I didn’t think the cash register would stop running the day we opened, and it hasn’t stopped.”

In talks with a dozen retailers who expanded over the last year, either by enlarging a store or opening new ones, most admit that doing it during the recession was not their ideal choice. But they also say it had some advantages, including lower rent, more negotiating room, and a public that’s far more welcoming to new retailers than usual.

Among their thoughts:

It was time. When explaining the reasons behind their decision, most felt that, while the time was not great for business, it was right for them for personal reasons.

“I searched my heart for what I wanted to do,” says Delores Kurjan, who recently opened Vintage Jewelers, in Burlington, Vt. “This is my first love, so I thought I’d take a risk. Time will tell whether it is brave or crazy. But I have such a love of jewelry that I’m pretty sure it will be successful.”

Vicky Young, who recently opened Yuba City Jewelers, in Yuba City, Calif., felt the same way after years of working for someone else. “I always wanted to start my own shop,” she said. “And I said, I’m not going to pause my life until the economy gets better.”

Some even figured the challenge would be good for business.

“We felt if we could make it in a time like this, then we can really establish ourselves when the market comes back around,” says Christopher Struble, co-owner of Arlington Jewelers, in Petoskey, Mich.

One store owner, who relocated from a declining mall to a much bigger downtown space, took the long view. “I thought about the move from the perspective of what was best for the next generation,” said Emanuel Jacobson, owner of Ozel Jewelers, in Redlands, Calif. “If you think about the next 25 years, the current recession doesn’t really have an impact.”

That’s not to say the retailers are unaware of what’s happening around them.

“I had people telling me you shouldn’t do this,” says Ronny Medawar, president of Medawar Jewelers, which recently opened a fifth store in Fenton, Mich. “But I knew my business, and we were ready for it. And when I made my decision I put my full force into it.”

There are advantages. Despite the obvious disadvantages to expanding during a downturn, retailers said there are benefits to it, including cheaper rates on rents and advertising.

“Everything is up for negotiation,” notes Steve Hub, who recently opened Roundhill Jewelers, in Zephyr Cove, Nev. That goes for buying merchandise as well. “We have been able to pick up product at a discounted price and get a lot of memo goods,” he says.

Tim Lewis, of Lewis Jewelers, Moore, Okla., who recently opened a store three times larger than his previous one, says he has saved not only money but also time. “We caught the construction crews when they had nothing to do,” he says. “They told us not only can we do it, we can do it today. Usually, when you build a store you need a year, from start to finish. We started in May and got it going in November.”

Doing less business than usual proved to be a benefit for Jacobson. “I wasn’t needed at the store so much, so it gave me time to plan the construction and more time to move,” he said.

People are welcoming. One trend that surprised the retailers is how their new stores have been welcomed by consumers hungry for good news.

“I’ve had customers come in and try to find something to buy just to support me,” Tracy Martin says. “They say we want you to do well. They are happy to see someone opening instead of closing.”

Because that goes against the grain, it’s exactly the kind of “man bites dog” story that attracts the attention of local media. “We were the top story on the news the night we opened, and we are not a small city,” notes Medawar. “It’s amazing how happy people are about it.”