From department stores to television retailing to manufacturing to the Internet, Jeff Taraschi’s career has taken many diverse paths. This is the first in an exclusive series of articles profiling top jewelry industry executives who have reinvented themselves over the years.
For Jeff Taraschi, “reinventing” himself has been a way of life. His diverse career began in the mid-1970s with an 18-year merchandising/managerial stint with Bambergers and Macy’s, whom he credits with teaching him the “essence” of retailing, brand building, merchandising, and customer service.
From department-store retailing it seemed a logical step to try the growing world of television shopping, and in 1992 he became senior vice president of jewelry at QVC. After three years at QVC, Taraschi spent a brief period trying to turn around the now-defunct manufacturer Town & Country. He then struck out on his own and in 1996 launched International Business Partners, a branding and product consulting firm. Following an 18-month period consulting for some of the biggest names in the jewelry industry, Taraschi returned to the corporate world in 1997. It was a huge move—literally—as he became president and chief executive officer of LJ International, a major jewelry manufacturer in Hong Kong. Taraschi assumed the lead role in taking LJ public and expanding the company’s business.
By 1999, he was ready to return to the United States to sign on as executive vice president of merchandising, planning, and programming for another television shopping channel, HSN, where for three years he dramatically expanded and retooled the business. In 2002, Taraschi resumed his consulting business—which eventually transformed into his current venture, Interactive Group Ltd. IGL is focused on capturing growth opportunities for brands, concepts, and personalities by linking content and product to electronic commerce.
In an exclusive interview with JCK, Taraschi discusses his career and the skills and synergies he acquired along the way that allowed him to move smoothly—and successfully—from one business sector to another.
In looking back at your career, what doors did your department-store background open for your future endeavors?
JT: At Bambergers and Macy’s, I held very well-rounded positions in a variety of areas. The Macy’s platform was a spectacular training ground for merchandising, assortment planning, brand building, and visual merchandising. I also received great financial training giving six-hour P&L [profit and loss] presentations. It was almost like being the CEO of your own division. There was tremendous encouragement and empowerment of buyers and divisional management in general to take responsibility for growing your business.
How did your department-store experience translate to QVC, and what were the challenges in switching to the world of TV shopping?
JT: QVC was very focused on item promotions, reorders, and telling a brand story from scratch on TV. Brands also had been very important to the personality of Bambergers. The most challenging aspect was the depth of product development QVC required, and the constant identification of new sources. The amount of product needed was 10 to 15 times greater than a traditional retailer—and QVC introduced new concepts all the time, requiring a much greater level of interaction with vendors to get them to support and develop your brand ideas. I also spent an incredible amount of time training the hosts, visiting the factories, and working with the research team on developing story lines for the products. And I went from 90 percent of my time at Macy’s searching the domestic market for sources to 70 percent of my time at QVC working with major overseas manufacturers.
What made you decide to leave QVC for Town & Country, and how did your retailing experience help you there?
JT: I had worked with Town & Country as a retailer and spent a lot of time in product development with them, and I was convinced that I could be part of a turnaround effort and successfully take on the challenge of moving to the manufacturing side. But their financial condition was so bad there was no time to create enough ideas to save the company. I was there for less than a year, and they went bankrupt right after I left.
How did your previous experiences help you in launching International Business Partners?
JT: I said to myself that I wasn’t going back to retail. I wanted to get more involved in consulting on brand building. I had a great network of major clients I had worked with previously—Zale, Swarovski, Lorenzo Jewelry (LJ International), Aurafin, and many others. My focus was helping them to create new brands and product concepts.
In what ways did moving to Hong Kong to work for LJ International broaden your business experience?
JT: I had worked with Lorenzo before, and they encouraged me to join them and help take them public. I am very competitive by nature, and I always challenge myself to go to the next level. So I agreed to work for them as a consultant in 1997 and became president and CEO in early 1998. I conducted all the road shows, wrote their business plan, and solicited funding from investor groups worldwide. I assumed a lead role in taking the company public on the NASDAQ market in mid-1998. After that, my role shifted to planning expansion through partnerships with major U.S. retailers like QVC, developing designer collections, and managing two Chinese factories.
LJ was a colored-stone company, and I had developed an extensive background in gemstones at QVC, so it was a great synergy for me. The biggest challenge was trying to find retailers willing to champion your product ideas over the other manufacturers out there. Both Macy’s and QVC thrived on new product development. But most of the big retailers have a strong commitment to testing and have a very methodical process for introducing new products because of margin concerns. They aren’t willing to take a chance on anything new, which at times was very frustrating.
On a personal level, living overseas is one of the greatest catalysts for personal change you could ever be exposed to. You move completely out of your comfort zone and have to adapt to an entirely different culture where you are very much the minority. You learn a lot about how to listen, how to try and understand where people are coming from. You also gain a much greater appreciation of your own culture, and learn to interact much easier with people from other cultures.
How did your second stint in TV shopping (with HSN) compare to your experience with QVC?
JT: HSN offered me the chance to merchandise a broad variety of product categories. Of course, moving back to the United States also was part of my motivation. I saw an opportunity to build a really great product platform at HSN, which at that time had been passed by QVC as the premier TV shopping network. We accomplished some great things while I was there, but it was challenging. We worked hard to upgrade the talent throughout the buying group. It was difficult to get young people to agree to move to Florida [where HSN is based]. Also, HSN had no reorder business whatsoever.
It was a very promotional business—everything was focused on “what can I bring in today that will sell?” It was a philosophy that was detrimental to brand building. We greatly reduced the reliance of price promotion as a vehicle to drive the business. We also really put HSN’s merchandising information system together from scratch.
When I arrived, I was horrified to learn that they had virtually no system in place. Everything was based on bringing in new product. We started to build the business, grow the number of sectors HSN operated in, grow some brands, and also build an infrastructure to help them do things more efficiently. And it worked: Sales increased more than 12 percent each year I was there, while profits went up 15 percent to 16 percent year over year.
How did your TV-shopping experience lead you to e-commerce and online brand building with IGL?
JT: I took a pause and looked at electronic retailing’s efforts to leverage brands and lifestyle personalities. Most of this success is due to the format’s instantaneous access to consumers familiar with the brands. I realized that e-commerce hadn’t scratched the surface in this area and saw an opportunity. In my lifetime, the Internet and “consumer direct sales” has been the single biggest revolution in retailing. The ideals and objectives of brand building, combined with great content, can be told far more dynamically on an e-commerce platform than anywhere else. There are 60 million homes connected to the Internet via broadband, and over the next few years, Internet growth will explode.
My first efforts in this market were with a company I launched called Lifestyle Brand Solutions in the fall of 2002. But my model was too ambitious, too early, and too dependent on creating synergy between print media and celebrities/lifestyles. We tried to take the TV-shopping model of developing brands from lifestyle personalities and connect their public appearances with actual product. We attempted to create a presence in national magazines to drive customers to a proprietary Web site for these personalities. But we met with incredible resistance from print editors to promote the commercial side of the venture. They had no interest in a partnership with the Web site in terms of product placement or promotion of the site, or in anything from the lifestyle personalities in terms of product.
I began to look for a new business model, and in 2003 formed Interactive Group Ltd. It’s built around the idea of taking great brand product stories directly to the consumer through the Internet, which eliminates the need for the print media. There are obvious commonalities with the Internet, TV shopping, and direct mail—they are all content-driven, brand-driven, and focused on telling a story and introducing new styles. But you can tell a more comprehensive brand story online than through any other model. It’s the aggregation and evolution of everything I’ve learned. The challenge is that, because the Internet reaches so vast and wide an audience, you need to find the right customer.