Smith Jewelers

Larry Smith is president of Smith Jewelers, a second-generation jewelry store in Danville, Calif., he runs with his brother Curtis. Smith’s parents founded the store—the first in Danville—in 1974, and over the years it enjoyed steady growth. In 1983, the owners doubled the store’s size, building a state-of-the-art jewelry repair shop and greatly expanding the store’s inventory.

The store made the most aggressive move in its history in 1999, when it left its longtime space in a strip mall for a new freestanding store downtown. Smith Jewelers has seen its business grow dramatically ever since. Larry Smith provides some insight into his store’s success in this month’s “Five Questions.”

  1. What are your best sellers? Our best sellers are diamonds and custom makeup. Custom is a big part of our business in general. We do some original custom bridal, but more of the makeup business is redoing existing bridal with larger stones. We also sell some color, karat gold, designer brands, and a limited selection of watches. We started selling estate jewelry about eight years ago, and it’s becoming a bigger part of our business.

  2. What has been your most successful marketing program? For the last eight years, we have been doing a direct-mail piece once a year that has been very successful. We do it for the month of December and send it out to all our customers, inviting them into the store and offering them 25 percent off anything they buy (not including repairs or special order). The program typically generates one-third to one-half of our sales for December. When we first moved into our current location in 1999, we did a big direct-mail piece beyond just our customer base. It cost a lot of money, but our December sales that year were phenomenal. We’ll never have another Christmas like that one.

  3. What has been your best money-saving initiative? We are Jewelers Mutual Insurance Co. policyholders. When you are insured by JMI, you can send registered packages through the mail declaring zero value, but JMI will cover it. This has saved us $20 to $30 on insurance costs per package, which really adds up, especially when you send a lot of diamond parcels back and forth like we do.

  4. What has been your most successful strategy for increasing sales? The technique that has worked best for us is to spend a lot of time with customers giving them the information they need without pressuring them. Sometimes they leave to shop around, but they often come back. They tell us they returned because we made them feel comfortable and they trusted us. This has helped us draw customers from a much wider area than just Danville. We get a lot of customers who come to us from other towns through referrals. In fact, our biggest sale (last year) was the result of a referral. A customer with a 2.00 ct. diamond engagement ring upgraded to a 5.50 ct. diamond. It was a $60,000 sale.

  5. What has been your biggest business challenge—and what have you done to resolve it? Our biggest problem was getting out of the rat race with the landlord we had in our original location. We had been in a strip mall for 25 years, but the traffic and the area had really deteriorated. Meanwhile, our rent went up every year with a cost-of-living increase to the point that it represented more than the owner’s salary ($6,500 per month). It was slowly destroying us. So in 1999, we bought one of the last empty commercial lots downtown and built a brand-new freestanding location. This made us our own landlord and increased our square footage (from 1,500 square feet in the strip mall to 1,774 in the new downtown store). Sales increased 25 percent the first year, and our average ticket went up as well. It was the best move we could’ve made. There are five vacant stores in that strip mall now, including our old location.