In Joe Bacher’s view, Jewelers of America is turning its back on its roots. “Jewelers of America was started by independent jewelers,” says Bacher, vice president of the Illinois Jewelers Association, a JA state affiliate. “We’ve all worked hard to build this organization.” But now he says the organization is in danger of becoming not “an association of retail jewelers but rather one of retailers who also sell jewelry.”
He’s talking about a new bylaw change that opens up JA’s membership to merchants that don’t do a majority of their business in jewelry but otherwise meet the organization’s membership criteria. The switch was aimed at well-regarded high-end retailers like Neiman Marcus and Saks Fifth Avenue, which already participate in the group as associate members. But it could conceivably open the door to membership for mega-chains like Wal-Mart, Kmart, and J.C. Penney.
All of which makes Bacher mad. “Most of J.C. Penney’s income is not from jewelry,” he gripes. “They are into anything they can make a dollar on. They don’t belong in a jewelry organization. Let them join a department store group. They don’t belong here. They are not interested in growing the industry.”
Bacher also resents the mega-merchants’ having access to JA’s resources: “We have to compete against the J.C. Penneys, the Wal-Marts, and now we are supposed to teach them to compete with us.”
A poll of JCK‘s retail panel finds that many agree. When asked if department stores should “be allowed to become JA members, assuming they fulfill all of JA’s ethical requirements,” 62% said no, while only 31% said yes. The naysayers doubted the stores could ever fulfill the JA criteria—particularly on sales training—and wondered who would monitor them. Others considered it encroachment on their territory. “Department stores are Johnny-come-latelies looking for a free ride to credibility,” wrote one respondent. “Please do not dilute our membership with a new type of vendor with drastically different goals. They are a different kind of animal and will never have the role in the industry that the jewelers that built JA have.” Said another: “A department store is not a jewelry store. With their money as leverage, they can easily bend an organization like JA to fit their needs. You don’t ask a lion to help prepare food at a banquet.”
Complaints like these have forced the organization’s board to reconsider the issue. It recently appointed a six-member task force to take a fresh look at the question. But at press time, officials still backed the change. Outgoing chairman Ed Bridge of Seattle-based Ben Bridge Jewelers says JA had been considering changing its membership requirements for a while. “JA’s a trade organization—not a guild,” Bridge says. “There are trade organizations that are more limited in scope, like AGS and IJO. But we feel that a trade organization should represent the industry. Roughly half the business done in this industry is done by jewelers, and the other half is by mass marketers. The question is: Do we want to represent half the jewelry business, or does it make sense to have a bigger tent? Will it make sense to have these people on board with us when go to Washington, D.C., to lobby on things like conflict diamonds and the luxury tax? We decided a bigger tent makes more sense. If the industry can do a better job of professionalism and marketing and representing ourselves in D.C., that will increase the size of the overall pie.”
Bridge stresses that anyone who joins must comply with the organization’s rules. “There are companies out there that do a substantial jewelry business that can and do abide by our code of conduct already,” he says.
It’s those codes that will prevent the chains that concern Bacher from joining, argues David Rocha, JA’s senior vice president. “Chains like Wal-Mart and Kmart would not be admitted as they are,” he says. “We have rules that require the training of staff, clearly posted return and guarantee polices, and [rules] against discounting. There are a lot of things those organizations would have to change to meet those criteria. It would mean selling jewelry like an independent sells jewelry. I don’t know if they would have an interest in that. If they were willing to change those practices to join JA, that would probably be good for the industry overall.”
Rocha notes that some jewelers believe that Kmart and Wal-Mart already have joined—which they haven’t. In fact, no jeweler has been admitted under the new criteria—not even companies the new criteria are aimed at. “These people are not breaking down our door trying to get in,” says Bridge. “And we are not out there recruiting them either.”
None of which pacifies Bacher, who also is upset that what he considers a major change was made without input from the rank and file. “This change wasn’t brought to our attention,” he says. “We found out by happenstance in April. I’ve gotten monthly newsletters from JA, and nothing has been brought up. Something as important as that should at least get some press in an eight-page newsletter.” Once again, JCK‘s retail panel agrees: only 19% of panelists—who are overwhelmingly JA members—knew about the change before being informed about it by JCK.
Bridge counters that the board followed standard procedure and that this change has been discussed at meetings for at least four years. And he feels that, despite the controversy, the organization will emerge stronger from the rule change.
“I understand the concerns of people who see the mass merchants as taking their business from them,” he says. “But I look at people who sell other items and contend with our industry for consumer dollars as competitors.”