Challenges and Changes

Frank Dallahan, the new president and chief executive officer of the Manufacturing Jewelers and Suppliers of America, has never been afraid to take on a challenge.

Throughout a versatile career that has spanned four decades, Dallahan has moved easily between worlds as diverse as manufacturing and retailing, jewelry sales and marketing, publishing, and now trade-association management. Learning from both success and failure, he has proven himself a master at adapting, learning new skills and industries, and using this knowledge to attain success at the next level.

Dallahan’s first career move was a brief assistant sales position with Hallmark Cards right out of college. Dallahan, a graduate of the University of Pennsylvania’s Wharton School, then “officially” launched his luxury career at Lenox as a market research analyst in 1966. He stayed on with the Lawrenceville, N.J., company for 16 years, moving up the chain of command. Dallahan called Lenox “a real training ground”; he was designated as the prototype for the company’s new management development program.

“I spent my first six months in market research, then three months in advertising, and a year in sales administration before they put me out on the road as a sales rep in Southern California,” he recalls. “By that time, I had a pretty good idea of the company and its products.”

Dallahan went on to manage three different territories before being promoted to Eastern regional sales manager and then national sales manager. In addition to grooming his sales and management skills, Lenox also exposed him to the jewelry industry, as most of its customers were china/crystal shops, better department stores, and jewelers.

“Everything I learned at Lenox has helped me in every job I’ve ever had,” Dallahan says. “One of the key lessons I learned from Lenox was a passion for perfection, for doing things the right way, and for not accepting second best.”

When Lenox acquired J.R. Wood/ArtCarved in 1972, the company asked Dallahan to go to New York and take over the sales management function at ArtCarved. Dallahan, who had never been exposed to a pure jewelry company before, called the experience a real “eye opener.”

“I didn’t know anything about diamonds or jewelry at the time and was put through some intense training,” he acknowledges. “Also, I went from the highly structured, conservative business of Lenox to the wild, flashy jewelry industry. It was an interesting baptism by fire.”

Four years later, he was called back to Lenox and named vice president of marketing, where he oversaw product development, the sales force, advertising and promotions, and the retail stores. By 1978, Lenox had grown to a $120 million business with net income of $22 million. Dallahan says the experience “taught him a lot about budgeting” and further developed his management skills.

Around 1982, Dallahan got a call from a former boss at ArtCarved, who invited him in for an interview. Dallahan says he was at a time in his career where he had a “burning desire to lead a company,” and realized that further growth opportunities were limited at Lenox. So he left Lenox to join Reed & Barton (a major producer of sterling silver tableware and giftware), and assumed the role of president of the Kurt Gutmann jewelry division (importer of Italian 14k and 18k gold jewelry). Dallahan was there four years and successfully expanded the Newtown, Pa., business.

“Reed & Barton was a much smaller company than Lenox, and I wore a lot of hats,” he says. “I focused on marketing first. I put together a catalog, did some advertising, revised the merchandise line, brought in a new sales force, expanded distribution, and put in the company’s first computer system. The business really grew dramatically.”

After four years at Gutmann, Dallahan realized he had accomplished all he could there, and he was looking for new challenges and a chance to make more money for his growing family. Opportunity knocked again in 1986 when Bill Thurston, the CEO of ArtCarved at the time, offered him the chance to come back as vice president of marketing for the ArtCarved and Keepsake businesses.

The move ended up as the first of several stints in Dallahan’s career when he would be called in to help revive a sagging business. Lenox had forced a disastrous integration of ArtCarved and Keepsake, which hurt both companies. As a result, Keepsake went from a $20 million company to a $9 million company in one year, Dallahan says.

When Keepsake’s sinking fortunes became apparent, Thurston left, and Dallahan stepped in as president of ArtCarved/Keepsake. But by then, Brown-Forman (parent company of Lenox) had had enough of the struggling venture. The company shut down Keepsake and eventually sold ArtCarved to CJC Holdings for $120 million. Dallahan says he learned some valuable skills from the experience that would help him down the road.

“I put together the offering of memorandum and went around to interested parties seeking a buyer for ArtCarved/Keepsake,” he says. “I also worked closely with the human resources people to put together severance packages for the employees who would be terminated. The main focus was to make sure these people were treated appropriately and compassionately. These were great lessons that would serve me well later on.”

Dallahan stayed on with the new owners of ArtCarved for about a year. But when the company announced its intentions to relocate to Texas, Dallahan decided he didn’t want to make that move. So he took a position with Krementz as the general manager of the bridal division, a position he held until 1990.

Little did he know that Newark, N.J.–based Krementz would soon be struggling with serious financial difficulties of its own. Krementz ended up folding its 14k and Shiman Gold lines, and also sold its bridal jewelry division to Frederick Goldman. That left only its gold overlay and Shiman religious jewelry divisions.

“I didn’t think I would so soon have to employ the skills I had learned at ArtCarved in helping employees who would be losing their jobs,” Dallahan says.

A headhunter presented Dallahan with his next opportunity—a meeting with QVC founder Joe Segel concerning a vice president of merchandising position with the West Chester, Pa., electronic retailer.

“Joe told me I could take that position if I wanted, but he said he had a more ‘interesting’ position developing their Diamonique-branded cubic zirconia line,” Dallahan recalls. “I would run the manufacturing division in Pennsylvania and report directly to Segel. It made a great deal of sense for QVC to sell that product through the powerful medium of TV. So I took the position in 1991.”

Dallahan found the learning curve totally different at QVC. Along with learning about the TV shopping business, he also got to experience what it was like developing tens of thousands of each item for just one internal customer (QVC) rather than multiple customers. Furthermore, Dallahan was exposed to the ultrastrict quality demands QVC placed on the Diamonique stones.

Within a year, Segel had retired, Barry Diller came in, and QVC decided to take the jewelry division in a whole new direction. The company wanted to reduce jewelry air time and reduce Diamonique production, even though jewelry was the highest-grossing product, and Diamonique the most profitable within the jewelry category. QVC got rid of all the head people involved in Diamonique, including Dallahan, in 1992, and a few years later shut down the Pennsylvania manufacturing facility altogether.

Dallahan followed up his unsatisfying QVC experience with another turnaround challenge: accepting the position of president for William Schneider, a bankrupt Miami-based manufacturer of colored-stone jewelry for major retailers.

“I hadn’t had much experience with the majors before—it sounded like it would be a great learning experience and a chance to get a company back on a positive growth path,” he explains. “So I became president of the company in 1993.”

Dallahan worked at William Schneider for about two years. Ultimately, the venture capital firm the company was working with decided it wouldn’t fund William Schneider any longer and forced the company to fund its own receivables, which Dallahan called a “death sentence.” He put an offering memorandum together, shopped it around the jewelry industry, and found a buyer in Aurafin.

Back on his own, Dallahan took the summer off to regroup, then returned to Krementz in 1995 for another three-year stint—this time as vice president of the gold overlay and Shiman religious jewelry businesses. Unfortunately, he found the company in a tough situation once again.

“With the big upcoming push toward branded diamonds, particularly in bridal, the decision for Krementz to sell its bridal division was a mistake,” Dallahan says. “And the price difference had narrowed so much between overlay and gold that it really eroded our overlay business. So while the Shiman business was really growing with both majors and independents, overlay dropped from an $18 million business to a $10 million business over a five-year period.”

The decision was made to put Krementz up for sale, and Dallahan was looking for a new opportunity when he was contacted by JCK executives in the fall of 1997. The magazine had just gone through a very difficult split, with half of its staff—including publisher Charles Bond and most of the sales, business, and editorial staff—leaving to form their own publication (Professional Jeweler). JCK—facing criticism that the new staff it was building didn’t have the deep industry ties the old staff had—asked Dallahan if he would work for the magazine as its liaison with the industry.

“I met with [former JCK editor-in-chief] George Holmes and [former JCK publisher/group vice president] Rick Bay,” he recalls. “They told me they needed someone with a significant presence who knows retail and manufacturing to represent JCK at functions and events. I was already on the JCK Las Vegas Show advisory board, so I said yes, and became executive director of trade relations from 1997 through 1998. I also talked George into letting me write the Counterpoint column, which has generated great interest and feedback.”

Dallahan was promoted to associate publisher in 1998, and was named publisher in 2000. He acknowledges that the move to publishing required a steep learning curve—but he believes his extensive industry knowledge and contacts, sales, management, and marketing experience made the transition much easier.

“The biggest challenge I faced at JCK was being a novice boss among publishing professionals,” he says. “But I know the industry, I know how to sell, and I know how to run a company. They gave me an opportunity, and I earned my stripes.”

In 2004, JCK relocated to New York, but Dallahan—having spent years commuting from Pennsylvania to New York—opted not to follow, so he left the magazine and did some consulting in the industry. When the opportunity arose to lead MJSA in October 2005, Dallahan jumped at the chance. In many ways, the position calls on all of the diverse disciplines he has mastered during his long and exceptional career, including executive management, jewelry manufacturing, sales, marketing, and trade publishing (AJM magazine).

Dallahan says his greatest challenge at MJSA will be to reverse the trend of a U.S. jewelry manufacturing industry in decline due to increasing competition from Asia. “I believe I can help the U.S. manufacturer focus on marketing,” he says. “If the only difference between your product and one from China or India is price, you lose. U.S. manufacturers need to think in terms of creating a brand name—a unique personality in the minds of customers based on special quality or service.”

Another goal of Dallahan’s is to provide manufacturers with opportunities to make more money by offering training, education, trade information, and similar initiatives. One way he plans to achieve this is by making AJM more relevant to CEOs and top jewelry executives by covering more general business issues with applications to the jewelry industry.

“This will open us up to a whole new advertising and readership base,” he says. “We will be careful not to lose our competence in the technical sphere, but we want to broaden our message.”