Jewelry Makers Look to the U.S. Market

German jewelry’s innovative design and quality has long been prized by knowledgeable U.S. jewelers and consumers. But concerns about higher prices and a dearth of German companies in the U.S. limited German jewelry’s market here. Until now.

Spurred by Europe’s recession and the lucrative U.S. market, more upscale German jewelry manufacturers – including small ones – are opening or expanding existing U.S. operations to provide on-site sales and service. More German companies are designing jewelry to combine European style and American preferences, while instituting cost controls and product innovations. Smaller companies are entering the U.S. as groups with a single agent. Some Germans also go direct to retailers, offering regional exclusivity and special terms in return for their jewelry being spotlighted in stores.

Changing times

Upscale jewelers and wholesalers have long traveled to Pforzheim, Germany, where two-thirds of German jewelry is made, to meet with suppliers and designers. And a few German companies have exhibited in U.S. trade shows and maintained U.S. offices since the 1950s and ’60s. But the post-war Wirtschaftswunder (“economic miracle”) years in then-West Germany and the thriving European market caused most German suppliers to do business in their own backyard until the 1980s.

“For years, the jewelry business here ran itself,” says Friedrich Zettl, owner of Zettl GmbH in Birkenfield near Pforzheim, one of Europe’s largest jewelry manufacturers. “If customers wanted German jewelry, they had to come to Pforzheim.”

But times have changed, says Thomas Schubert, managing director of Breuning GmbH, Pforzheim. Major trade shows in the U.S., Europe and Asia are now only an airline ticket away, and phone, faxes and e-mail provide easy access to suppliers. “Not so many Americans come to Pforzheim anymore,” he says. “So now firms here need to go out and develop business outside Pforzheim and Germany.”

Most German firms still don’t want to go abroad or to America, agrees Zettl. “But now they have to go,” he says.


Recent economic events in Europe and America are pushing more German companies to start or expand U.S. marketing efforts. The continuing recession in Europe severely affected German jewelry producers and their domestic market.

Other factors at home have affected the market as well. “The costs of Germany’s reunification, more unemployment [now at its highest level since the 1930s] and cuts in government social benefits and salaries have made more consumers feel insecure, so they spend less,” says Frieder Keller-Bauer, a veteran German jewelry producer, former head of Christian Bauer and a keen observer of Germany’s jewelry industry. Government and industry figures support his statement. Annual jewelry sales in Germany have dropped consecutively for the past four years and many jewelry manufacturers have cut production annually by about 10%.

“In the past few years, German manufacturers have had to do more just to get the same results,” says a designer for Christian Bauer of Welzheim, Germany.

At the same time, the U.S. economy has grown stronger. In March, the dollar hit a three-year high against the deutschemark, lowering the price (in U.S. dollars) of German jewelry. German suppliers are setting up housekeeping in the U.S. as a result. “If we only exhibit in U.S. trade shows, we don’t really get to know the people or the market,” says Norbert Breuer, managing director of Laudier by Georg Lauer GmbH & Co., Pforzheim. “To learn the market and who is who, we have to be here.”

“More individual German firms are now putting a toe into the America market,” says Alfred Schneider,

executive director of the Association of the German Jewelry and Silverware Industries (known as VDSI), “We expect the trend to grow because the U.S. business situation is stronger.”

Expanding market

In 1989, Christian Bauer was the first leading German jewelry manufacturer to make a high-profile commitment to building a market in the U.S. It opened a sales and service office in Florida with a U.S. staff and developed jewelry and marketing plans suited to the U.S. market. Today, it has a customer network of 500 stores and is expanding in Texas, Florida and the Northeast.

A growing number of companies have followed. Guthmann + Wittenauer, a Pforzheim company producing 8,000 styles in low to medium price ranges, began extensive efforts in the early ’90s to develop export programs. It joined major U.S. trade shows and learned how business is done in the U.S., says Managing Director Peter J. Kabitzke. The U.S. is now one of its biggest markets outside Germany. Friedrich Zettl, Neissing, Leo Wittwer GmbH, Laudier and Breuning also opened offices in the U.S.

Other companies are expanding the services they offer U.S. customers. Abel & Zimmermann, a Pforzheim company with a U.S. representative in West Palm Beach, Fla., is doing more regional co-op advertising with its clients. Guthmann + Wittenauer published a catalog dedicated to the U.S. market, its first outside of Germany.

Success here and elsewhere is enabling some German organizations to expand in their homeland as well as in foreign markets. A good example is Zettl, which has clients in some 50 countries and produces, among other things, a popular hinged-hoop earring. Zettl recently opened a 120,000-sq.-ft. addition that houses new equipment and a new computer system at a cost of $31 million. “Now we are much better prepared to increase our marketing and exports, and better satisfy our consumer demand,” says Friedrich Zettl. The company, which Zettl says makes over a million items per month, will be able to double its production within the next two to five years.

Joint efforts

Smaller businesses also want a slice of the U.S. pie, but find it difficult because of a lack of capital needed to launch an operation in the U.S.

Some Pforzheim companies are banding together to develop a joint marketing plan and share the costs of going into the U.S. market, through a program set up by VDSI. The program is designed to bring together companies that want to develop or improve their export business. There are similar groups for European, Middle Eastern and Asian markets.

The U.S. group formed last summer with several interested companies. By early this year, it had narrowed to four Pforzheim companies: Silhouette Schmuck Bentner GmbH & Co., Friedrich Schefold, Hermann A. Kappler and Georg Lauer GmbH & Co. The four banded together based on similarities in price and type of jewelry offered (gold or platinum retailing $400 to $4,000) and clientele (mainly individual jewelers rather than wholesalers or large chains).

The group will offer a “best-of” collection in the U.S., comprised of selections from each company’s product line. The U.S. agent is Karlan Ring Co., a Dallas, Tex., manufacturer of midpriced semimounts, wedding sets and diamond jewelry. “We expect to be in the U.S. market by this summer,” says Arndt Bentner, president of Silhouette Schmuck. “This year is a test for the cooperative. Based on initial sales and the response of U.S. customers, the collection will be adapted to U.S. tastes.”


While German makers seek inroads, a small but growing number of U.S. retailers are finding that offering German jewelry is an effective way to separate themselves from their competitors.

One is Stuart Moore, whose Stuart Moore Galleries (in New York City, Los Angeles and Newport Beach, Cal.) specialize in German and Swiss jewelry. What Moore calls the “tailored, architectural” style of German designs especially appeals to U.S. consumers under the age of 35, he says. “They have rejected what their parents did, which was to go for the most bang for the buck,” he says, “looking not for craftsmanship but for size.”

Moore has worked closely with German suppliers for 15 years, and sees business between independent U.S. jewelers and German suppliers as natural and mutually beneficial. He advises each to actively seek the other. “There are a number of designers and firms with only a few clients here who want to expand and will work directly with a jeweler, with good references, willing to do serious business,” he says, referring to orders starting at $20,000 per year.

In return, the jeweler gets exclusivity for that jewelry – “the BMWs of jewelry,” Moore calls it – at a cheaper price than if the retailer bought it though an agent or distributor. The agent or distributor might add as much as 15% to the supplier’s price, says Moore.

“German firms are totally honest and reliable,” he says. “They’ll work with you and give good terms to start business with you; if you ask for delivery on Sept. 1, you’ll get it on Aug. 25. And they play fair. They won’t smother your market once they become well-known. They stick with their U.S. clients for the long haul.”

Designing for America

While European styling is the reason many Americans buy German jewelry, more German suppliers are subtly adapting their creations to better suit American tastes or designing lines specifically for the U.S. market.

For example, Americans tend to be two years behind other markets in accepting designs and trends already popular in Europe, says Christel Patotschka of Abel & Zimmermann. “We take our current designs, and design them anew later for the American market,” says Patotschka, “but somewhat bigger and heavier.”

Tamara Comolli, one of most successful German designers in the U.S. market, puts much thought into her creations for Americans. One good example is her variation on the popular tennis bracelet. “I never liked the ugly back of the American tennis bracelet, which always shows when it twists on the wrist,” she says. She redesigned a bracelet to always show diamonds attractively. The result – the “Always Diamonds” bracelet in her Mikado collection – is “the ultimate tennis bracelet, an American product done in a European way,” she says, without the crown or bezel settings found in U.S. designs.

Christian Bauer also designs jewelry specifically for the U.S. markets and pays close attention to market demand. “Our designers work the U.S. trade shows, asking retailers what they want,” says Tom Loback, general manager of the company’s U.S. operations, Christian Bauer Inc., Melbourne, Fla.

This enables them to determine what the market wants, says Paul Schmidt, Christian Bauer managing director. “We can offer products that respond to what U.S. consumers want, but still have the quality and design you expect of German jewelry,” he says.

Platinum and steel

Leo Wittwer has developed its line in the past two years to be “suitable” for the U.S. market, without catering exclusively to it, says President Reiner Maier. “That means more originality, more unique designs and more platinum.”

Indeed, platinum jewelry – long popular in Germany – is an areawhere German jewelrymakers remain influential in the U.S. market. “There is a growing acceptance of this type of clean, pure, elegant jewelry,” says Keller-Bauer, “and German producers still have an advantage in innovation and design.” Some new designs being brought to the U.S. include platinum jewelry by Christian Bauer, platinum and gold jewelry by Abel & Zimmermann; innovative platinum and enamel jewelry by F. Zerrenner, Pforzheim; and platinum, including lockets, by Victor Mayer GmbH & Co., Pforzheim, better known as the authorized producer of Fabergé eggs and jewelry.

“The platinum look” at more affordable prices is boosting the use of stainless steel in German jewelry seen in the U.S. Laudier’s new Paula line is a stainless steel and gold collection designed for teens and twentysomethings – though early sales statistics show it is popular with women into their thirties – sold through jewelry stores. New designs will surface at least twice a year. “The jewelry business focuses so much on the adult, but after 14 or 15, young women don’t want to wear what their parents wear,” says Breuer, himself the father of a young daughter. “We want to help young women learn that jewelry should be bought in fine jewelry stores.”


The price of fine German jewelry remains an obstacle for some U.S. retailers and consumers. Certainly, German jewelry tends to be more expensive, says Moore. “You have to be up-front with customers about that,” he says. “But you should explain, too, that the it is due to the skilled craftsmanship and labor, the long years of training craftsmen and the better-quality materials used in making the jewelry.”

But there are also factors affecting prices over which German producers have little control. Germany has some of the highest labor, material and social benefits costs – plus some of the toughest unions – in Europe. “The prices of gold, diamonds and raw materials are the same for all jewelry producers in Europe,” notes Alfred Schneider, VDSI managing director. “It’s labor costs that are the problem.”

Most German manufacturers are sensitive to the “expensive” image of their jewelry and have taken actions to be more price-competitive at home and abroad. For example:

  • Companies, especially larger ones, are downsizing. In the past year, up to 10% of the 8,500 jewelry workers in Pforzheim have been let go.

  • VDSI is working with the German unions to get a freeze on wages for a period of time and with the U.S. Customs Service to reduce the tariffs on German jewelry imports.

  • Larger companies have opened plants in Asian countries with lower labor costs, especially Thailand, to do labor-intensive work. All Zettl’s stone setting (about 20% of its jewelry), for example, is done at its plant in Bangkok. And Thomas Schubert of Breuning says, “Our Thai plant helps us survive by making us more competitive.”

  • Large and small companies are hiring versatile workers and training them to handle different tasks. “Today, you see 12 people working in this section,” says Zettl of his company’s Birkenfeld plant. “Tomorrow, you might see only five, because the others are needed and able to work in another area of production.” Adds

  • Patotschka of Abel & Zimmermann,“With costs so high in Germany, we have to find ways to make our chains in half the time. So we look for people who are skilled and responsible, and we encourage innovation and pay incentives for it.”

  • More companies control costs by controlling raw materials. Leo Wittwer, for example, has its own diamond importing company and a large stock of loose stones. This protects it from the vagaries of demand and the diamond market. “I always have diamonds at the right price because I buy any time there is a good price, not just when I need it,” says Maier. “I can keep prices on jewelry steady longer. The result is we are making something of good quality, that no one else has, at a good price.”

Innovation nation

Perhaps the biggest competitive advantage, though, is technical innovation, an area in which the German jewelry industry is skilled.

Zettl’s patented hinged-hoop earrings and Christian Bauer’s patented “floating stone” tension rings are popular sellers in the U.S. The designs are original and produced on specially designed equipment. Zettl’s machinery is designed and produced in-house. “We had to do this because no one else was making the machinery we needed,” says Zettl.

Meanwhile, Guthmann + Wittenauer is adapting new technology, such as laser welding and laser engraving, to reduce manual labor. Christian Bauer is “adapting our production processes to new materials and combinations that we couldn’t do in the past,” says Schmidt.

German jewelrymakers are adapting other technology, producing high-quality training videos about products for U.S. retailers, while other companies are designing sites on the World Wide Web to promote their products.

In addition, VDSI, the German state of Baden-Württemberg and a number of jewelrymakers set up the Institute of Jewelry Technology in 1996. The institute, says VDSI’s Schneider, follows technical developments in metals and jewelry production and offers classes to manufacturers and their staffs to keep them up-to-date and knowledgeable.


German jewelrymakers like their U.S. clients. “They’re friendly and they make up their minds on the spot [about buying],” says one. Still, it isn’t easy doing business in the U.S., say some German suppliers. The problems they cite are mentioned by other European suppliers too.

Newcomers often overlook, or don’t take into account, the size of the U.S. or the nature of its market, which is subdivided into geographic submarkets with variations in taste. “They assume they can nip around this country like they do in Germany and Europe,” says Stuart Moore, a jeweler who deals almost exclusively in German and Swiss jewelry at his stores in New York City, Los Angeles and Newport Beach, Cal. “I tell them they don’t realize how spread out it is here. If they send a salesperson here, they should plan on lots of flight time and on spending two or three months here, not a few days.”

U.S. trade shows are different too. Some German designers are turned off by what they see as the crass commercialism of U.S. fairs, compared with the more understated environment of European shows. Foreign exhibitors in the U.S. may be assigned the back corners in the halls, something upscale German suppliers aren’t used to.

On the other hand, some suppliers – especially newcomers – come into U.S. shows with a mistaken idea of their value. “Too many think they only need to do trade fairs, that they can go in and out quickly and make a success,” says Christel Patotschka of Abel & Zimmermann, a Pforzheim company long active in the U.S. “Others don’t have a systematic strategy for the U.S.”

“They’ve got to learn you don’t run into a country and expect to leave quickly with a book full of orders,” says Friedrich Zettl, managing director of Friedrich Zettl GmbH, Birkenfeld, a major manufacturer that opened a U.S. office two years ago. “It takes time to build up a market.”

But even veterans of the U.S. market are frustrated by the turnover in retail staffs and the lack of product knowledge. “Every time I come, it seems there is a different buyer or different salespeople,” says Patotschka. “You have to go through the process again and again of explaining your product and who you are.”

To get around that problem – at least of staff turnover – more suppliers are providing training support. Abel & Zimmermann and Victor Mayer, for example, now offer training videos about their products for their U.S. clients.

Cultures clash

But the biggest problem German jewelrymakers face in the U.S. is Americans themselves – at least some of them. “They don’t pay and they don’t keep their word,” says one major German manufacturer, both frustrated and incredulous.

Americans may be quick to make a buying decision, but many aren’t so quick when it comes to paying. Indeed, some manufacturers have real horror stories about their experiences in America:

  • A new U.S. agent took on $100,000 in German jewelry to show. Months passed with no orders. When the supplier asked to have the jewelry back, the agent said he gave it to someone as security on a loan. When the company sued, the agent left the state where the suit was filed. This case has gone through two trials. “If I had known the cost and time this would take,” says the company president, “I would have written it off as a bad investment.”

  • Another German company shipped a new U.S. agent $750,000 of jewelry in advance of a trip with company officials around the U.S. The agent picked up the jewelry at the Customs Service office and disappeared.

  • A German company shipped $45,000 worth of jewelry to a U.S. retailer on memo. The retailer went bankrupt and the supplier was never paid – something that rarely happens in Germany because of tough bankruptcy laws.

  • Another U.S. retailer ordered $50,000 of custom-made jewelry from a German supplier at an agreed-upon price. When the jewelry was ready, he tried to get the price significantly reduced – claiming he could get better prices elsewhere – and finally refused to accept the order. The German supplier was stunned. “In Europe, when we give our word and shake hands, we expect both sides to honor that. We assumed it would be the same in America,” he says. He was wrong.

“In Germany, when people give their word in business, that’s it,” says Moore. “They have to learn that isn’t always that way here, that this isn’t a bigger Germany. They want to do business here because they need the big market. But they are terrified of being taken advantage of. So they approach this country with a mixture of hope and caution.”

There is a German word, redlich, that means to be honest, upright. In the end, that is what German suppliers say they want of their U.S. customers.

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