Talking to Itay Berger of Diamonds Direct

During the second half of 2008, Diamonds Direct, a retail store in Charlotte, N.C., opened two new locations—in Raleigh, N.C., and Birmingham, Ala.—as part of an ambitious campaign to capitalize on ­secondary markets that are home to universities or capitols. The timing, as most people know by now, was not ideal.

“It was right before the world collapsed,” says Itay Berger, president. (He co-owns Diamonds Direct with Alon Arabov, an Israeli diamantaire who is the majority shareholder.)

Against all odds, however, the retailer weathered the financial crisis with surprising aplomb. “In recession, our concept does even better,” Berger says, “because guys who could afford Tiffany are more careful.”

The tactic that has distinguished Diamonds Direct since the company opened its Charlotte store in 1995 is straightforward: Present clients with a vast array of competitively priced diamonds—sourced directly from India, Israel, and Belgium, as its name implies—backed by superior customer service befitting a destination store, and they will come.

“We believe in inventory,” Berger says. “That’s the name of the game. Offer a selection of 10 1-caraters. But the concept is not price; it’s the experience. Our No. 1 vehicle for growth is referral.”

Today, Diamonds Direct operates five stores, each averaging about $20 million in annual sales. In addition to the Charlotte, Raleigh, and Birmingham locations, the company opened stores in Richmond, Va., and Austin, Texas, in 2012, says Berger, who lives with his family in Israel for a good portion of the year.

“It’s kind of half and half,” he says. “I travel between the stores, either starting at headquarters in Charlotte or finishing up there.”

This month and next, Berger will be stateside, as he oversees operations during the all-important fourth quarter.

“We’re manufacturing and stocking and buying for a good season,” he says. “We’re manufacturing plenty of basic diamond jewelry—diamond studs, pendants, hoop earrings—and we are heavy on fancy yellow diamonds. Another item we continue flash-manufacturing is bangles in more fashionable styles, like rose gold and stackables.”

With bridal representing about 75 percent of the Diamonds Direct business—the designer bridal selection includes such names as Jack Kelege, Tacori, and Verragio—the holidays are synonymous with proposal season. This year, Berger expects the trendiest pieces to reflect a mix of old and new.

“The halo look is still very strong, especially in the 1 carat and under category,” he says. “In the last year, I’ve seen wide, 5 to 7 millimeter engagement rings coming back, because everything has been so thin and so delicate. And we’ve definitely increased platinum sales in the last year. Big stones also came back in a big way; the 3 to 5 carat range is having a nice increase.”

Over the holidays, Diamonds Direct ups its radio and social media budgets, hires seasonal workers to greet customers and gift-wrap purchases, and makes special financing options available to shoppers, but as Berger sees it, the hard work has already been done when the season starts.

“I believe if you do things right for a long time, even if the need for ­jewelry isn’t there this year, when it is there, they will think of Diamonds Direct as their first option,” Berger says. “I don’t really believe we have a customer until he buys a second time—and even then you have to work hard to earn his trust. Do it right, deliver on time, and make sure service during and after the sale is flawless.”

Not even the threat of encroaching online sales tampers Berger’s enthusiasm for the business. “If you invest in the right inventory and the right people, you will beat the Internet every day,” he says. “It’s retail, and retail is in the details. You have to listen and you have to overcome.”

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