Mark Israel, president and COO of Hearts on Fire, took some time to speak with me today about the company’s decision to drop some 120 retailers. One thing he mentioned was that the retailers they are dropping have not been notified; that will happen over the next few days. However, he said, “It should not come as a surprise for most of these folks.”
“Clearly it didn’t make sense for these retailers,” he said. “They weren’t committed. It didn’t fit into their plans.”
“We need to have committed partners,” he said. “They need to be committed to the brand. They need to have strength and financial leadership. It’s important that the brand experience is right, and that the end consumer is experiencing Hearts on Fire as they should. We feel we could get a few more sales [if they kept the retailers] but when the store doesn’t have the commitment it won’t be the right experience.”
The company will have about 500 retailers in the U.S. when this is all over, he added. But he notes, “We are not looking to shrink our distribution channel. We are already adding new partners in the U.S.” He added the company is committed to selling its product to independent jewelers.
He added the company wasn’t just going to let people go in favor of crosstown rivals. “We are not going about this so we can drop someone in favor or someone else,” he said
As for why the company announced this, he said, “We think it’s important that our existing partners, and those that may want to grow the brand, understand what we are doing and why we are doing it.”
Finally, he said that the company sees the overseas market as a prime area of growth. “Right now, our sales are about 75% U.S., and 25 % non-U.S.,” he said. “As the brand continues to grow, we expect it to be about 60% U.S., and 40% non-U.S.”