Specialty Retailers Join the Jewelry Game

Long before supercenters allowed us to arrange for an eye exam and a pound of hamburger at the same location, customers were forced to make several stops along their shopping route. Maybe it was a trip to the butcher, the florist, and another to the bakery.

For many years, this shift to supercenters wasn’t a major threat to upscale independents. Stores like Wal-Mart, while gaining a foothold as the most successful jewelry retailer in the country, were not selling higher-price-point branded goods. Even midtier department stores were relying on costume collections or nonbranded goods for their “fine jewelry” inventory.

Independents may now be realizing that security was short-lived as high-end specialty retailers are making serious inroads into the fine-jewelry category. From the coasts to the country, stores at the upper end of the price scale are realizing that they, too, can benefit from a one-stop-shopping mentality. These superboutiques, which once banked on apparel and beauty, are also finding success at the jewelry counter.

DONECKERS, EPHRATA, PA.

While Lancaster County, Pa., may not seem like the fashion capital of the East, Doneckers is slowly building an empire in the pastoral town of Ephrata. A 50-year-old family business that originated as a furniture and dry-goods showroom, Doneckers now comprises four floors and 48,000 square feet including fashion, furniture, artwork, a restaurant, an inn, and full wedding services.

“Doneckers has always had some sort of jewelry presence, but it wasn’t until three years ago that we entered the designer-jewelry market,” explains Amanda Dietrich, director of public relations for Doneckers. “Bill Donecker noticed that women were focusing more on accessories, and there was a shift to the idea that a piece of jewelry could really make an outfit,” she says.

Noticing a trend, Doneckers began to bring in brands like John Hardy, Lagos, Stephen Dweck, and watches from names including Fendi and Hermès. The response was quick, and the size of the department has doubled in the last three years. Initially there were concerns that clients would be unwilling to make large jewelry investments very often, but those fears proved to be unfounded.

“We’re finding that customers are making investment purchases more frequently than we had anticipated,” Dietrich says. “We are working with jewelers who have great brand recognition, and we want to be known as a destination for fine jewelry. Vendors have been attracted to us because we are fashion leaders in the area. It’s a natural evolution.”

While the jewelry category doesn’t have its own look book or advertising, it is all “part of the mix” in Doneckers’ marketing plan. A seasonal look book contains six pages exclusive to fine jewelry, and trunk shows are a major part of the store’s event calendar.

While more similar to a Neiman Marcus, Doneckers is not afraid to go up against local jewelry stores. Lazare Kaplan engagement rings were brought in, even though it was assumed that clients headed to their favorite independents for major purchases. “So far the engagement-ring business hasn’t been as successful as we hoped, but Mr. Donecker hopes to be able to compete with the independents down the road,” says Dietrich. “We’re continuing to grow the business and build our own brand as a destination jewelry store.”

MISS JACKSON’S, TULSA, OKLA.

Founded as a lingerie shop that graduated to a series of shop-in-shops, Miss Jackson’s is now a premier retail destination for fashion-conscious Southern women. Its roots go back to 1910, when Nelle Shields Jackson conceived the mantra, “Miss Jackson’s exists to serve its patrons, and they should be made to feel as comfortable as if they were in their own houses.”

Departments include apparel, beauty, fragrance, shoes, gifts and gourmet, and accessories. Fine jewelry had its own department for years, but it was leased by an independent third party. Four years ago, though, fine jewelry was brought in house as a part of a larger strategy to bring all departments under one umbrella.

“Fine jewelry is now our number-one fastest-growing department in the store,” confirms Chaz Gaut, director of business development for Miss Jackson’s. “When fine jewelry came in house, we brought in new designers at the higher end with a lot of brand recognition.” Vendors include Robert Lee Morris, Me & Ro, Janis Savitt, Gurhan, and Philip Stein Teslar watches.

“We brought in a lot of contemporary lines, like Robert Lee Morris, and product is just flying out the door,” Gaut says. “We decided to really diversify to bring in a wider range of clientele, and it has paid off. We certainly believe in one-stop shopping, and our customers are following suit.”

GOVBERG JEWELERS AT BOYDS, PHILADELPHIA

Some independents have concluded that if you can’t beat the specialty stores, you have to join ’em. Govberg Jewelers, family owned since 1922, always enjoyed success at its namesake location in downtown Philadelphia, but when the opportunity to join with city institution Boyds presented itself, the time seemed ripe for change.

“It wasn’t a hard decision; it just presented an interesting challenge,” explains Danny Govberg, president of Govberg Jewelers, of his store’s move to the interior of retailer Boyds. “I really wanted to try something unique, and we were lucky enough to find the right venue.”

Here’s how it happened: One of Govberg’s closest friends, Kent Gushner, is a third-generation member of the family that owns Boyds, a specialty retailer that is second only to Barneys in men’s apparel and recently underwent a women’s-wear expansion that tripled inventory. When Gushner and his two brothers-in-law purchased Boyds in May 2004, a partnership with Govberg blossomed. “The plan was two years in the making, but it seemed like a great arrangement: Govberg’s would open up shop right in the front of the ground level of Boyds,” Govberg says. “Because we are watch-focused, the store would be a transitional element from women’s wear to men’s wear.”

With the prime location, Govberg Jewelers inherited the foot traffic of Boyds’s entire clientele, roughly five times the old traffic, according to Govberg. Although at press time it has been only 90 days since opening, Govberg is confident about his decision to integrate within a larger store. “This is truly a store-within-a-store concept,” he explains. “Everything is separate including the computer systems, advertising, and staff, but the bonus is that there are a tremendous amount of synergies at work, including sharing a mailing list and doing cross promotions.”

Specialty retailers wouldn’t make headlines without brand names. One designer who has always found success in the fashion arena is Robert Lee Morris. Found in many one-stop fashion destinations, Morris feels comfortable among fashion retailers.

“I think it makes a lot of sense for the specialty stores to reach out to the higher price points and brands for a total head-to-toe dressing experience,” Morris says. “That one-stop-shopping mentality is starting to become prevalent. Fashion retailers are realizing that there’s a great markup in designer jewelry, and it’s starting to become necessary to have that product alongside a great dress or pair of shoes.”

Morris says his contemporary jewelry has always been a bit mystifying to traditional jewelers, and it was when he ventured back into the accessory world that his business “came back to life in an amazing way.”

“We are opening many more accounts now, and most are specialty stores,” Morris says. “We made a concerted effort to move away from fine jewelry two years ago. Fashion retailers understand materials and they appreciate design regardless of whether we are using gold or wood. There’s a fantastic market for complete lifestyle shopping at that high end.”