A New Niche, An Old Philosophy

The young man and woman put down their cappuccinos, he places the diamond ring on her finger and they look up and smile broadly as a camera shutter clicks. They embrace, then proudly admire the ring as they leave the store, hand-in-hand.

This was a once-in-a-lifetime experience for them. But for Robbins Bros., the “World’s Biggest Engagement Ring Store,” it’s a common occurrence.

The 10,000-sq.-ft. “superstore,” as Steve and Skip Robbins call it, opened in November 1995 in Fullerton, Cal., and the brothers expect to do between $3 million and $5 million in business in their first year. It is by far the largest store in the Robbins empire, which includes 11 other stores, all in Southern California malls and all bearing the name “Robbins Bros., The Engagement Ring Store.” Total revenue for the firm is expected to reach $16 million to $17 million for the current fiscal year.

Three years ago, The Engagement Ring Stores didn’t even exist. The brothers then operated a chain of 14 stores know as William Pitt Jewelers, stressing a concept of customer service they learned from their grandfather, Ben Tipp, and father, Eugene Robbins. Tipp operated a jewelry store in Seattle, Wash., and did annual business of $1.2 million in the 1920s, a lot of it on credit. The tradition of customer service continued when Eugene Robbins, Tipp’s son-in-law, moved to Southern California in the 1950s and bought a store in Pasadena that had been owned by William Pitt.

Like many industry youngsters, the brothers grew up in the store. “We took out trash and worked in the store every summer and every Christmas,” Skip says. “Our dad taught us two things. No. 1 was ethics and No. 2 was that when you’re on the way up, it’s not always straight up, not always a smooth ride.”

The boys joined the business full time when their father became ill in the early 1970s. They bought the business from him within a few years and by the late ’70s had embarked on an expansion program, opening new stores in malls and shopping centers. “We were one of the first jewelry businesses to do this,” Steve says. “We had center court locations in each mall.” They advertised heavily on radio, using themselves as announcers to establish an identity with consumers.

Developing a niche: The number of jewelry stores in malls grew steadily and recession spread across the country. By 1990, the Southern California jewelry industry was suffering. Steve and Skip, who owned 14 stores at the time, decided their futures lay in a niche operation. The chose the bridal business.

The brothers traveled the country, examining other bridal specialists and talking with consultants. (They had good contacts. Both were active in Leading Jewelers Guild, with Steve serving as chairman and Skip as head of the marketing committee.) They developed a five-year strategic plan and spent many hours discussing the subject.

“We see the world the same way,” says Steve, 40. “We have a phenomenal relationship. Skip is more instinctive and I’m more analytical. But we arrive at the same conclusion.” Skip, 43, handles merchandising and marketing; Steve oversees operations, finance and personnel. They share strategy decisions equally.

On the way to establishing their niche, the brothers closed out all merchandise in the William Pitt stores, using mostly radio to advertise the sale. Then they reopened all but three of the stores under the new identity.

Capitalizing on their identity with consumers, the brothers still act as spokesmen on their radio ads. The ads target 18- to 35-year-olds and are heard on every major rock music station in Southern California, as well as on some cable television systems. “When people get engaged, we want them to think Robbins Brothers,” Steve says. The commercials emphasize value and trust, never price.

Hearing the radio commercials, plus a referral from a friend, brought Scott Davis and Massiel Perez of Whittier, Cal., to the store to buy a 62-point marquis stone set in a platinum and 18k gold mounting. “We were expecting a regular jewelry store, so this was more than we expected,” Davis says. “We had shopped at about a half dozen stores before coming here. The price was excellent here, and we were impressed with the warranty.” (Robbins Bros. provides a lifetime warranty with every ring sold. It also offers an exchange program in which the customer can get full value for the ring on the purchase of another ring worth at least twice the value of the original.)

Employees: The brothers are quick to credit their employees with much of the success of the stores. The business employs 150, including 25 in the corporate office and 18 in the newest store. The brothers share financial information with employees and offer profit-sharing and 401(k) plans. The company is “run by committee,” which means that employees at all levels help with recruiting, training and other aspects of the business. They even have a “fun committee” that plans lunches and organizes a softball team.

All salespeople are trained by the Diamond Council of America, and several have taken courses offered by the Gemological Institute of America. But the brothers say it is Robbins Bros.’ own training that is most valuable. Each employee annually undergoes four days of intensive orientation that includes discussion of the company history and values, product information and instruction on the use of the various selling tools available to them. Speakers discuss selling techniques and what makes Robbins Bros. different from other jewelry stores. The company also holds “town meeting” sales rallies and retreats that bring all employees together.

A new concept this year involves teams of staff people who go from store to store and work with sales associates right on the scene. “They have contests between teams,” Steve says. “One team goes through a selling procedure, and the other one tries to do it better. We do a lot of different things to keep them stimulated.

“We’ve created careers for some of our salespeople. We give them rewards for good performance.” As a result, turnover is low; many employees have been with the company at least 10 years and several for 15-20 years. “But they must have high productivity and high values,” Steve says. “It’s not one out of two — they must have both.”

Managers meet twice monthly with executive staff members. “They know they don’t have to work through a corporate structure or bureaucracy,” he adds.

Inventory: Another reason for success, the brothers say, is their extensive inventory. The superstore alone carries between $2.5 million and $3 million in merchandise; the smaller stores carry less. “Someone could describe any diamond and we probably have it,” Steve says. “If we don’t have it, we can get it quickly.” They deal directly with sightholders, including a Russian source.

The company features some designers and also creates many of its own mountings, which are made by contract with a casting firm (the brothers say they have no interest in becoming a manufacturer themselves). Mountings are available in 14k or 18k gold and platinum and start at about $250; about 3,000 designs are available in the superstore. Diamonds are available from about $195. “We cover every price range and try to cover a broad spectrum,” Steve said.

The brothers value their relationships with vendors. “About 80% of our volume is with 12 or so vendors,” Skip says. “We’ve built a good relationship with them.”

Skip personally inspects every piece to make certain it meets quality standards. “That sends a message to our salespeople and our customers about how important our customers are,” he says. “Everything we do is about serving the customer, giving the customer value and service. The customers must be as happy 30 or 40 years from now as they are today.”

While almost all inventory is devoted to diamond engagement, wedding and anniversary rings, two cases in the superstore contain jewelry such as tennis bracelets, pearls and other items that can be used as anniversary or engagement gifts. Twice a year in each mall store, the brothers call attention to these gift items with an event featuring hors d’oeuvres, champagne and harp music. Admittance is by invitation, but all clients who have had a relationship with Robbins Brothers are invited.

The sale: The superstore is located on a busy street in Fullerton, an Orange County community some 25 miles from downtown Los Angeles. The brothers spent about $1 million renovating the building, a former bank. “We chose the building because it looked like ‘trust,'” Steve says. Parking adjoining the building is plentiful.

A sign featuring the logo superimposed over a huge engagement ring stands in the parking lot and attracts attention from the street; other large signs on the sides of the building add to the easy identification.

As a customer enters the store, the story of diamonds is told in large photos depicting mining, cutting and polishing. Soft, romantic music plays in the background. Sections are labeled “Design Center,” “Gem Lab” and “Master Goldsmiths” (from two to four jewelers are employed, depending on the time of the year), and gem scopes stand next to showcases throughout the store.

Salespeople welcome each customer and try to develop a line of communication immediately. “People are intimidated,” Steve says. “It’s the job of the salesperson to become friends with them, to determine what they are looking for and then discuss the store and the company to build their trust. Then we show them designs, educate them regarding the setting, explain why one diamond is more valuable than another, show different shapes and sizes and discuss financial terms.” During the process, the customers are taken into the gem lab, where they can watch as their diamond is weighed or see what it looks like under different lighting conditions.

Customers Art Barela and Shelly Atwood of Placentia, Cal., didn’t need the educational experience. “I had looked around and knew what I wanted,” Atwood says. “I was educated at other stores. I knew the language and knew the questions to ask.” The couple, who came to the store on a friend’s referral, bought a 1-ct. solitaire.

“That’s what we train our people to do,” Steve says. “We analyze what a customer needs or wants. We don’t want to force something on them. Maybe 30%-40% of the customers have the gem lab tour. We just have to decide how far to go with them.”

After the purchase is completed, the couple can watch while the diamond is being set, or they can relax in a lounge where a machine offers cappuccino, espresso and four other types of coffee. A TV and VCR in one corner allow customers or their children to take a break by watching films such as The Prince and the Pauper and Wind in the Willows or the Disney Channel and Sports Channel. Regarding the latter, “Some men just don’t want to be involved,” Steve says with a laugh. “They just let the woman pick out the ring.”

After an engagement ring is ready, the couple may visit a gazebo just outside the store where a Polaroid photo is taken and then presented to them in a heart-shaped frame. “It’s a very special time and it’s something we want them to remember,” Steve says. The couple also receive a feedback form titled “Tell Skip and Steve.” “We look at every single comment from customers,” Steve says. “Then we give rewards to salespeople based on how the customer is treated, and if there is a problem, we look into it.”

Finance: The company relies less and less on credit sales, which now account for about 35% of annual sales volume. “With first-time buyers, we need to be flexible,” Steve says. “We’ll sometimes take a risk even if the customer has no credit. But the defaults are certainly there.”

With the new niche philosophy, the brothers had to adjust to lower margins. “It’s difficult to accept working in a high-volume, low-margin environment,” Steve says. “So the environment must be results-oriented.”

But the lower margins haven’t dampened their enthusiasm for the niche concept. They’ve already identified locations for two more superstores, and they plan to have five or six total within two years. “We’ll probably sell the mall stores over the next three years,” Steve says. “All 11 are good locations, so we shouldn’t have too much trouble.

“There are lots of ways to be successful in the jewelry industry,” he concludes. “Our answer is to be the best in our niche. We think we are.”