April 2009

Spotlight on the Retailer

Noted Retailer Liquidates: Fortunoff: The End

after filing for chapter 11 twice in little over a year, and being up for sale three times in the last five years, the 87-year-old 20-store chain fortunoff in february became the latest jewelry chain to liquidate. fortunoff, an icon in the northeast, was sold in 2004 by its founding family to investors trimaran capital partners and kier group.


retail jewelers had their opportunity to vote for their favorite pieces earlier this year, and now suppliers have their chance to vote for their favorite retailer! a call for nominations went out to suppliers in january. the 10 independent jewelers who received the most manufacturer nominations are profiled in the cover story of this issue.

Open Hearts and Diamond Necklaces

for the record, it was a coincidence that both mark smelzer and i wrote about facebook on our pages last month. honest, we didn’t plan it that way! but the fact that we each chose the topic says something. it not only underscores the effectiveness of the internet as a means of messaging but also reminds us of the importance of community.

Warren Buffett’s Little Blue Bonds

berkshire hathaway, the company headed by legendary investor warren buffett, has loaned $250 million to tiffany. the new loans are due in 2017 and 2019 and have a hefty 10 percent annual interest rate, although that’s less than buffett’s rates for other recent loans. tiffany considers itself lucky to raise money in this environment.

The Past is Past…

i’ve just completed a week’s sales calls in los angeles. it’s always a pleasure to get a west coast perspective on things. one of our most casual meetings was with our dear friend linda garrido at mk diamonds. although we didn’t have an appointment, she took a moment to greet us in the lobby and say hello.

I Hate To Be Sold!

some people hate to feel that they’re being sold. maybe they believe all salespeople are pushy and aggressive. maybe they’ve had a bad experience with a salesperson in the past. or maybe they really do want to look around and make their selection without the help—or burden—of a salesperson.

JCKonline.com Comment of the Month

lynn ramsey, on the story ‘penny proddow dies’: [jewelry historian and author] penny proddow was one of the most knowledgeable, articulate, and inspiring jewelry enthusiasts i have ever had the privilege of knowing and working with. along with her wonderful business partner and co-author marion fasel, they took the world of fine jewelry to a new level, creating unique coffee table books with wi…

Batteries = Bucks

think there’s no money in watch batteries? wal-mart supercenters changed 18 million batteries last year, sources say. at a wholesale cost of roughly 40 cents apiece, charging $4.24 retail for each battery delivers a gross profit of $69 million. “there’s definitely money to be made in watch batteries,” says henry kessler, president and owner of sy kessler sales in dallas, the north american head…

JA Fights Looming Luxury Levies

new luxury taxes on jewelry are possible in new york and illinois, and jewelers of america is organizing the industry to stop them. the new york state and illinois measures would, if passed, add a 5 percent luxury tax to jewelry and watch purchases over $20,000. the proposed new york tax is part of the state budget; in illinois, it’s in a separate bill.

Heavy Metal

high-price gold is here to stay for awhile, and jewelry retailers, manufacturers, and consumers are coping in various ways, despite the recession. last year, the trade struggled with zig-zagging gold prices. gold ended 2008 at $874 per ounce (average price) and briefly topped $1,000 last year (the high was $1,002, according to a chart on kitco.

Hit the Reset Button

when steve ballmer of microsoft talks about “reset” in the software business, a term used by others in tv interviews, we know that business managers are seeing far more than a short-term recession. they expect the level of business to be distinctly lower than it has been for years and plan to scale back proportionately.

Be Ready for New Career Opportunities

while the severity of the current downturn has been a surprise, equally surprising is the state of denial we see from many people about how tough it really is and how much tougher it will get before the economy improves. we at diamond staffing solutions have been baffled by the number of candidates who refuse to consider potential new career opportunities or who don’t have a current resume to s…

Tiffany Shuts Irridese

tiffany and co. plans to close iridesse, the 16-store pearl-only chain it launched in 2004. the closings will occur “as we make agreements with the landlords and sell off the inventory,” said company spokeswoman linda buckley. she expects that to happen over the next few months. “we still very much believe in the concept, but the current economic climate being what it is, the iridesse business …

From the JCKonline.com Blogs

a few jewelry-related observations on this historical inauguration day about our new president: he wears a watch, even with formal wear, making watch-wearing cool. he wears a wedding ring. ditto as to the coolness factor. about our new first lady: she loves color and texture. she likes a bit of dazzle near her face.

11 Ways to Reduce Product Returns

fashion products like jewelry have always suffered a higher rate of return than other products, yet the vast majority of returned jewelry has nothing wrong with it. here are 11 tips to help reduce the number of products returned to your store. 1. don’t stint on training. sales training is more necessary today than during an economic boom.

Diamond Dealers Club Election Challenged in Court

the fractious intramural politics at the new york diamond dealers club have spilled over to the courts. the club’s former vice president, david abraham, has asked the new york state supreme court to prevent four-term president jacob banda from serving an unprecedented fifth term. banda was overwhelmingly elected to a fifth term on feb.


guzzi ‘s, a stratford, conn., jewelry store for more than 37 years, is closing its doors, according to local station wtnh. the owner still owns diamond designs in orange, conn. jewelers of america has named robert headley its first chief operating officer. a former naval officer, headley comes to ja after 20 years with tiffany & co.

Spotlight on the Retailer

barmakian m.j. christensen diamonds diamonds direct southpark hamilton jewelers hyde park jewelers london jewelers sissy’s log cabin tapper’s diamonds and fine jewelry wilson & son jewelers worthmore jewelers

Zale Closes 105 Stores

zale corp. is closing 105 underperforming stores and eliminating 245 positions. most of those positions were in its home office; 70 were open. the changes accompanied financial results that showed zale’s fourth quarter same-stores sales down some 18 percent. in a conference call, ceo neal goldberg said christmas sales were hurt by a holiday strategy that stressed “storewide discounts.

De Beers’ Doldrums

diamond giant de beers is not immune from the current crisis. among its recent actions: will continue its u.s. generic advertising for “beacons” (e.g., three-stone rings, journey products), but only if sightholders and retailers help with the cost. closed its washington, d.c., corporate affairs office, and slowed down the worldwide introduction of its forevermark brand.

Cuts Continue

the gemological institue of americain february cut 9 percentof its staff (103 employees), froze its pension plan, and slashed managerial salaries—after laying off 11 percent of its staff in december. [feb. 2009 jck, p. 35] fossil the watchmaker eliminated up to 260 positions, or 4 percent of its approximately 6,000 employees, and gave executives a pay cut.

210 Days

this is the current legal deadline for retailers in chapter 11 to decide which stores to close and which to keep open. the limit was one of several changes made to the u.s. bankruptcy code in 2005. according to a report on bloomberg.com, rep. jerrold nadler (d-ny) is introducing a plan to lift the limit, a move strongly opposed by the international council of shopping centers.

Tips For Struggling Businesses

no question, the current environment in the jewelry industry is one of struggle. in conversations with retailers, wholesalers, and manufacturers, the word struggle may be an understatement. some time ago, i clipped a highlight box from investors business daily and taped it to the keyboard of my laptop.

Finlay Ceasing its Leasing

in a much anticipated reorganization, finlay enterprises is exiting its long-standing business running leased jewelry counters in department stores and will focus on the specialty jewelry store business. the company’s specialty jewelers at press time included 69 bailey banks & biddle, 34 carlyle, and five congress stores.

Obama Election Commemorated

a commemorative bronze medallion honoring barack obama as the first african-american president has been created by veteran jewelry and accessories designer deborah lapearl clark, who endured segregation as a child in the 1960s south. she recalls seeing dr. martin luther king’s 1963 “i have a dream” speech, and “dreamed that night of a black u.

AGS @ 75

the american gem society, the jewelry and gem trades’ professional guild, celebrates its 75th anniversary this month at its 2009 conclave in chicago, site of its first conclave. ags has been a leader in professional, ethical, and educational standards for its members since its 1934 founding. it trains and certifies jewelers, gemologists, and jewelry appraisers and brings them and suppliers toge…

Collectors Universe Leaves Jewelry Business

collectors universe is leaving the jewelry grading business and will no longer own the two labs it spent millions on in 2005 and 2006—gcal (gem certification and appraisal lab) for diamonds, and agl (american gemological laboratory) for colored stones. collectors universe said jewelry grading revenues were down 25 per-cent in the second quarter of 2009, with the division posting a $10 mil…

Gem Pricing Report

mining operations in major producing nations remain at a standstill. key markets are seeing few foreign buyers. colored stone markets across the globe report sparse trading activity. prices are stable for most loose gem products, although cash buyers are reaping the benefits of a buyers’ market. thai dealers report that once-active trading centers have been empty because of the burma embargo.

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