JCK Business Report

Store Design Profile: Affordable Panache

Client: “Customers have to feel very comfortable when they come into our store,” says Howard A. Sherwood, co-president and owner of Daniel’s Jewelers, a 36-store chain in Southern California. “Our new design works almost like a vacuum cleaner raising their curiosity; and there’s no threshold they have to cross that makes them feel they’ve made some commitment.

“The challenge for Ruth Mellergaard, the store designer, was to create a sense that this is a good, safe place to enter. Her design succeeded on these counts; it also was fresh and exciting, and created a sense of welcome.”

Designer: “When most people buy jewelry, they’re very intimidated. ‘You can make it happen’ is Daniel’s Jewelers’ tagline. And I feel that our design elements, which feature accessibility and openness, convey that theme,” says Mellergaard.

“Their openness to new design ideas was unlike any client I’ve worked with before or after. A lot of clients just aren’t willing to get out there with bold colors and design elements. What we developed collaboratively makes a statement that enhances their corporate identity and marketing message. Daniel’s Jewelers aren’t in the business of selling jewelry. They’re in the business of selling romance and family. There’s a cohesive message that speaks to their target customer, and that’s why it works.”

Mellergaard is president of New York-based GRID/3 International Inc. Nearly 40% of GRID/3’s customers are jewelers; the rest of the company’s design practice consists of other types of retailers, malls, schools and corporate identities.

Target customer: Daniel’s Jewelers serves an ethnically diverse middle-class and lower middle-class population. More than two-thirds of customers purchase jewelry through a store credit program.

Most store locations attract Hispanic customers, who constitute 50% of the chain’s clientele. Some locations attract primarily African-Americans, and a few draw more from Filipino, Asian and Caucasian communities.

Design challenges and features:

Cost: To stay within budget, Mellergaard worked collaboratively with Daniel’s Jewelers’ marketing and management team as well as the firm’s longtime contractors and suppliers. Together they came up with a design that cost approximately $140 per square foot for virtually every element from floor to ceiling except the vault, security system and in-case trim. It was a “complete interior architecture package,” Mellergaard says, that more typically would cost between $150 and $225 per square foot. Savings were achieved through low-cost elements such as level loop carpeting, standard-size lights and cases, a combination of fluorescent and tungsten halogen track lights, and laminate case surfaces.

Adaptability: The Los Cerritos Mall store serves as a model for new store locations. Elements of Los Cerritos’ design have been integrated easily into renovations at four existing stores.

Daniel’s new color scheme of chrome yellow, purple, aqua and red can be adapted as color trends change by simply repainting the walls (paint is also a less expensive option for wall finishes) and changing the colors in showcase interior trims. The company’s visual merchandiser developed custom risers, fingers, floor boards and tiny pillows for display of jewelry – all finished in exotic fabrics and colored vinyls that can be changed easily and cheaply from season to season and when the overall store color scheme changes.

Narrow store layout: Because typical mall locations are deep and narrow, a critical store design challenge is how to get customers in the door and involved in the merchandise.

At Los Cerritos, Mellergaard took advantage of the 18-foot ceiling and created a round black column at one side of the entrance with a rotating diamond floating on top. Jewelry is displayed at the “lease line” within inset display windows inside the black tiled column and at the opposite side of the entrance.

There’s also a gold, tongue-like bar that sticks out over the store entrance that creates a link from the exterior of the store to the interior, visually drawing the customer inside. Within the store, the bar cuts diagonally across the ceiling of the rectangular space, breaking up its box-like narrow feel.

To create a visually interesting path through the store, interior showcases are asymmetrical. On the right side of the store, a set of “v”-shaped showcases floats away from the wall. On the left side are walk-up wall cases, and mid-way on the left is the office. Behind it is a coffee bar area where credit applications are filled out. It’s situated adjacent to a children’s play area with kid-size tables and chairs, coloring books, balloons and videos.

Intimidation factor: Daniel’s appeals to customers who typically shop as part of a family outing and who might find a formal enivornment off-putting.

The layout of the selling space is intended to reduce intimidation. At the walk-up wall display cases, customers don’t need to speak with a salesperson to get a close look at the jewelry. The wall cases and the “v”-shaped counters promote side-by-side selling rather than positioning the salesperson as “the expert” on the other side of the counter.

Forms and colors are playful and vibrant, and the store’s multilingual staff is trained to create a festive, informal atmosphere. There also are surprising details such as the turquoise grout on the store’s tiled storefront and column.

Exceptional designs for stores, jewelry display and packaging will be featured in upcoming issues. To submit designs for consideration, please send camera-ready art to: Jessica Stein Diamond, Senior Editor, JCK Magazine, 201 King of Prussia Road, Radnor, PA 19089.

Seinfeld’s parents were right.

Did you see the Seinfeld episode in which Jerry’s uncle Leo and his buddy George Costanza get arrested for shoplifting at a New York bookstore?

“Everybody’s doing it,” said Jerry’s parents, who freely admitted to stealing books themselves, much to Jerry’s chagrin. If statistics from the National Retail Federation are any guide, they’re partly right.

Of all of the retail sectors analyzed in the organization’s recent national survey, the highest average inventory shrinkage rate – 4.12% – was for books and magazines. This was well above the average inventory shrinkage rate for all retail sectors of 1.77%. Second was cards, gifts and novelties (2.69%), third was toys and hobbies (2.44%) and fourth was jewelry (2.27%).

Among the factors in these losses were (ranked in order of importance): employee theft, shoplifting and administrative error. The survey was conducted for the National Retail Federation by Loss Prevention Specialists and Sensormatic Electronics Corp. Respondents reported that, on average, they suffered $77,729 in cash losses during the 1996 calendar year.

Finding Funding Sources

Wondering how other small to mid-size businesses finance their operations? A recent study by Arthur Andersen Enterprise Group shows that more than two out of three smaller firms (0 to 19 employees) relied on commercial bank loans.

Don’t let poor health ruin your overseas trip.

Summer brings a fresh season of travel – particularly for jewelers doing serious buying at shows and international suppliers. If you’re going overseas, these simple precautions could keep your journey from turning into a medical disaster.

Prescription drugs: Take both the medication and the prescription with you (both should be in carry-on luggage), and check beforehand to determine whether the drug is legal and available where you’re going. There are some countries where you might not be able to fill your prescription, or you might run the risk of being arrested for narcotics trafficking – even if it’s not a narcotic. International SOS Assistance Inc. (800-523-8662), or www.intsos.com, can do research on the legality and availability of particular drugs (the company provides a number of health- and security-related emergency services for a fee).

Inoculations: Make sure your childhood vaccinations are up-to-date. Also, get the hepatitis A inoculation, as well as the hepatitis B vaccination, which didn’t used to be standard. Check with the U.S. Centers for Disease Control and Prevention (CDC) in Atlanta at (404) 332-4565 to see if you need protection against malaria and other exotic diseases in the region you’re visiting. The CDC’s Web site, www.cdc.gov, contains detailed information on vaccines, disease outbreaks and government travel advisories.

Tap water and food: Watch what you eat and drink in most places outside North America and Western Europe. In general, it’s best to drink only bottled water and other bottled beverages (no ice cubes!). Avoid street-vendor food and raw meat or fish, eating only steaming hot dishes. In countries with serious health concerns, stick to canned foods.

In areas where tap water isn’t potable, tooth brushing can be risky. Solution: Have room service deliver boiling water to your room at night “for tea,” and then use it for tooth brushing and drinking.

Basic traveler’s know-how: If you have a health emergency overseas, you’ll need to understand some basics about the country you’re in. On your first day, learn how the local pay phones work, how to use the currency, some basic phrases in the local language and how to find a doctor or a hospital.

Adequate rest: It sounds basic, but even the healthy can fall ill if they don’t take time to recuperate from a long trip. Overseas travel is stressful and exhausting, particularly when you’re battling jet lag.

Most of the emergencies International SOS Assistance deals with would be routine if acceptable medical care were available. “The real problem is where things happen,” says John Knapp, vice president of International SOS Assistance. “A broken arm can turn into a major problem if you’re not near adequate care.” The firm provides multilingual physician consultation services, referrals to quality medical providers worldwide, six overseas medical clinics for fee-paying clients and emergency health evacuations when necessary.

What’s In A Name?

While American jewelry concerns tend to go for names based on ownership or location, those in Hong Kong and Taiwan often choose more fanciful monikers. Here’s a sampling from JCK Japan’s subscriber list:

Thousand Million Diamond Co. Ltd.

Sincere Overseas Jewellery

Twinkle Star

Glitter Success Ltd.

Good Bright Jewellery

All Top International

Forever Brilliant Gem Co.

Eternity Manufacturing Ltd.

Sunny Creations Ltd.

Crystal Rise Jewellery Ltd.

Golden Advance Jewellery Co. Ltd.

Galaxy Diamond Ltd.

Jewelry Kingdom

Good Way Jewellery Manufactory

Prestige Jewellery Manufacturer

Brilliant Trading Co.

Diamond Luck Ltd.

Full Moon Customers: Russian Rolex Man

Some jewelers swear their most unusual sales experiences happen when the moon is full. Here is one such tale:

It was a warm spring day in a mid-size Texas city when the “Russian Rolex” man strolled into an upscale jewelry store.

In his late 60s, the man wore a sport coat over a sweatshirt that had Cyrillic lettering on it. He asked the store owner if she could help him find a “Russian Rolex” in time for his birthday two weeks away. He had visited several jewelry stores in town, but no one seemed to take his request seriously.

Fortunately, she recalls,“I was in an adventurous spirit that day. I like a challenge; and I like crazy things. So I picked up the phone and called Rolex.” To her surprise, a “Russian” Rolex did exist. It listed the days of the week in Cyrillic lettering.

Within two hours, Rolex called to let her know the company had located one such watch in the United States, and would deliver it within a week.

The upshot: a $15,850 sale to the man – who turned out to be a Russian language professor at a local university. And he knew his watches, too. After he bought the Rolex, he bartered for some jewelry repair with a beautifully bound first edition of Timeless Elegance, a $100 book about watches signed by its publisher and author.

The jewelry store’s owner still laughs about the experience. “When someone comes into your store, you just don’t know where they’ve been, and who they are. If you don’t ask and find out, you’ve lost a great opportunity.”

Please, share your “Full Moon” stories about unusual customers with your fellow jewelers. Send your tales of mirth, woe and unusual sales to: Jessica Stein Diamond, JCK, 201 King of Prussia Road, Radnor, PA 19089; jdiamond@chilton.net.

WHAT TO LOOK FOR WHEN PICKING A TRADE SHOP

Finding a good trade shop is as demanding as recruiting a business partner or hiring a key employee, according to Rod Miyata of the Ace of Diamonds, a retail business in Los Angeles.

Miyata, in a recent AGS presentation, provided a check list of things to do before signing up a new shop. Among them:

  • Seek recommendations from others in the industry who’ve used the shop.

  • Consider getting a financial statement from the shop owner.

  • Check the shop’s pricing schedule to see if you can make a fair profit. Discuss payments and terms up front.

  • If you’re going to ask the shop to buy stones, materials, findings, etc., be sure to check on markups.

  • Ask for proof of insurance and cover liability for theft, stone breakage and so on.

  • Look at finished repair work or custom pieces to see if they meet your quality and design standards.

  • Discuss time taken to do a job. Ask about scheduling of special orders.

  • Ask about vacations and holidays. You don’t want to schedule an order for a special customer only to find that your trade shop is closed.

  • Watch the shop’s benchworker at work. Determine if the shop has certain specialties – and if it has weaknesses in, for example, pavé, channel setting, hand manufacturing, wax carving or working in platinum.

  • Look for a trade shop that shares your business philosophy. For first-class jewelers a shop that does work that’s “just good enough” is not good enough.

“There are countless reasons for using a trade shop,” Miyata said. “There are many different services it can provide – jewelry and watch repair, custom designing, engraving, restringing, appraisals and much more.” And, in dealing with a shop, “never assume anything,” he added. “Assumptions may get you into trouble. Clarify everything with proper communication – your expectations, your customer’s and the trade shop’s commitment.”

Unlike hepatitis B or C, travelers can get hepatitis A simply from eating, drinking contaminated water – or just shaking hands. Though rarely fatal, it can lurk in the body for months, causing fever, fatigue and nausea.

South America, Africa, Asia and the Middle East have the highest risk of contagion. Spain, Italy and Eastern Europe carry moderate risk.

A vaccine is available at most U.S. hospitals and travel-medicine clinics. Taken with a booster six months later, it can last a lifetime. Even if you’re vaccinated, you should wash your hands and food thoroughly in high-risk areas.

Source: Centers for Disease Control and Prevention

Where Small Businesses Find Funding

Commercial Bank 68%
Leasing 22%
Vendor credit 16%
Credit cards 12%
Private loans 9%
SBA guaranteed loans 6%
Personal bank loans 6%
Private placement of stock 3%
Venture capital 2%
Other 9%
Note: Numbers total more than 100% because some of the businesses polled used more than one financing method.

Key Stats

265 million: People worldwide who bought jewelry in 1997.

$90 billion: Estimated value of jewelry sold in U.S., Japan and Europe in 1997.

12%: Increase in those sales over past two years.

$1.2 trillion: Estimated U.S. credit-card debt in 1998.

$2 trillion: Projected debt in 2003.

10.9%: Projected annual growth rate for credit card debt.

1.5 million: Personal bankruptcies in 1997.

15%: Increase in bankruptcies over 1996.

70%: Proportion of jewelry sold in the U.S., Japan and Europe that contains gold.

$64 billion: Value of gold jewelry bought by consumers in 1997 in the U.S., Japan, the U.K., France, Germany and Italy.

$27 billion Value of other types of jewelry purchased in these markets last year.

13% Increase in plain gold jewelry sold since 1995.

-7% Drop in gemset jewelry (primarily diamonds) in same time period.

$1.5 trillion Volume of Web-influenced sales of all types projected for the year 2002.

3% Anticipated total value of Web-influenced sales expressed as a percent of the world’s combined Gross Domestic Product.

30% Proportion of Web-based companies that currently report a profit.

300,000 Web pages added to Internet each week.

27% Portion of the world’s population located in Asia.

9.2% Portion of worldwide retail sales that take place in Asia.

20% Growth in Asian retail sales between 1994 and 1996.

$65 The average purchase price for a piece of jewelry in the U.S. in 1997.

$194 The average in Italy

$578 The average in Japan. [graphic: drawing of wedding veil]

$32 billion Amount spent annually on weddings in the U.S.

21% Portion of all U.S. jewelry and watches purchases that were made by newlyweds.

75% Proportion of all fine china purchases that were made by or for newlyweds.

69% Percentage of U.S. companies that cited lack of qualified applicants as a major cause of understaffing in 1998.

29% Proportion of companies that said understaffing was caused by budgetary constraints in 1998 (down from the 45% in 1995).

$268 Annual average expenditure on jewelry per buyer in U.S. in 1997 (down from $294 in 1993).

$389 Average annual expenditure per buyer in Italy (up slightly from $364 in 1993.)

$1040 Average annual jewelry expenditure in Japan in 1998 (up from $756 in 1993).

Key Stats Sources

(Numbers represent order of data presented)

1,2,3 World Gold Council; 4,5,6 Business Communications Company Inc.; 7,8 The Kiplinger Washington Report; 9,10,11,12,13 World Gold Council; 14,15,16 ActivMedia, Inc.; 17 Lycos; 18,19,20 Discount Merchandiser; 21,22,23 World Gold Council; 24,25,26 Dessy Creations Inc.; 27,28 William Olsten Center for Workforce Strategies; 29,30,31 World Gold Council.