Solomon Brothers president Jaron Solomon (pictured) says he didn’t expect to be spending so much time thinking about purchasing other independent jewelers. But something clicked during the Atlanta-area three-store chain’s recent purchase of Mervis Diamond Importers.

“After we did our third store, I wasn’t thinking I wanted to go anywhere else,” Solomon tells JCK. “When [co-founders] Zed and Ronnie [Mervis] approached me, it got out, and other people reached out.

“There are so many jewelers in every city who do a nice business but don’t have a second generation that wants to come into the store. And they’ll say, ‘I’ve just had my best year ever, business is great, but I’m tired.’ They have no choice but to go out of business.”

Part of the problem, he says, is that private equity—which has no problem buying local businesses like doctors or plumbers—has very little interest in jewelry stores.

“Their issue is always inventory,” he explains. “Private equity won’t look at even a $15 or $20 million store. Those are huge numbers, but they don’t want to deal with heavy inventory.”

And so, he believes, many jewelers will consider selling to Solomon—with the owner possibly keeping a stake going forward.

“I have to believe, I’m a hell of a better option than doing a going-out-of-business sale,” Solomon says. “The last thing you want to do is scrap that designer piece for 10 cents on the dollar.”

None of this will happen right away, he stresses. First, Solomon Brothers has to fully integrate Mervis’ three stores into his company—and that will take a lot of time and travel. (Georgia is about a two-hour plane ride from the Washington, D.C. area, where Mervis is based.)

And while he plans to bring Mervis onto Solomon’s custom-built point-of-sale software—as well as change some of its digital capabilities—he doesn’t expect much else to change. Brothers Zed and Ronnie plan to stay on post-acquisition, with Zed continuing to oversee the diamond buying and Ronnie staying as the store’s “voice” on its radio ads.

The Mervis name will also remain intact. In fact, Solomon considers that one of the store’s most valuable assets.

“Mervis has been spending millions of dollars in radio and Google building up their name,” he says. “There’s value in it. So I’m buying all those millions in media spend. People come in every day, just because it’s Mervis.”

He says that issue is key for him in deciding whether to buy other jewelers—he is looking for stores whose names and reputations extend beyond just the person who owns them.

“The first question I would ask the owner is, ‘What do you do in sales versus what your associates do in sales?’” he says. “If people come in because you’ve been around for 40 years and they’re used to dealing with you, and you’re retiring, that’s useless to me. I’ll be losing all those sales overnight.”

He doesn’t expect that to happen with Mervis, but he’s also clear-eyed that taking his company from three stores to six will pose its share of challenges.

“I’m sure I will learn so much from this transition,” he says. “It was so hard for us to go from one to two stores. But it was much easier to go from two to three. I think we’ll learn a lot from this, and the next time will be easier.”

Down the road, he hopes to expand both Solomon Brothers and Mervis, adding that if the combined companies number only six stores a few years from now, he says he will have “failed.”

Because, while private equity may not be big fans of jewelry retail, Solomon believes that’s where most consumers will continue to buy gems.

“As things get less authentic in our lives, jewelry will always be a physical product,” he says. “We can’t make it digital.

“When I buy something expensive, I want to talk to somebody. I don’t want to just click a button when I spend thousands of dollars. I want someone to look me in the eye and give me a bottle of bourbon and say, ‘Thank you for shopping here.’ That feels great, especially when you’re buying from a family business. As we get more digitized, I think that will become more important.”

Top: Jaron Solomon, president of Solomon Brothers (Photos courtesy of Solomon Brothers)

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