Month: August 2018

If you are at a point of calling it quits, cashing in, transitioning your business, restructuring it to a different form, or just in need of a jump start for the year, you are at one of the most crucial times in your business since you started it or took it over. How can you maximize your return on investment and create a result that meets your individual needs? The good news is: You have options.

You can try to sell your store to a qualified buyer. Unfortunately, there aren’t many, and those less qualified will have a hard time getting a loan from a bank or generating enough cash to buy it. Then there’s the question of price. Most jewelers think their business is worth more than what the actual books will show. Often a son or daughter or relative has demonstrated the ability to run the business effectively, but then how are they going to pay you? Usually over years, with some degree of measured risk to you if they falter.

Scrapping it will give you the least amount of return, maybe 15 or 20% of what you have in it. So what about selling it to a close-out merchant? I guess that will work. But what will he give you? Maybe just a touch over scrap. It still isn’t worth it.

Since most of your assets are tied up in inventory, you must monetize a great portion of it in order to retire comfortably, or transition the business to a new owner, often a son or daughter. That’s a big reason why inventory liquidation sales have been so effective over the years. A sale event is a very reasoned way of getting the majority of your capital investment back in the form of cash, and over a relatively short, two-month period of time. It involves some hard work – but that’s what we do for you. We take the weight off your shoulders as expert facilitators while you enjoy an eight week sales extravaganza like the holiday season on steroids. A major sale event is well worth the effort, as many of our satisfied clients will attest to.

These and other methods are reasonable ways to liquidate unwanted jewelry, but there’s still no guarantee the merchandise will sell, and it costs you money just to hold on to it. So what gives you the best return on your investment for merchandise you need to liquidate?

At The Gordon Company, our goal is to advise you on the best course of action for you individually. Everyone is different and has unique needs all their own. Our expertise is in coming up with creative ways to make your exit and/or transition as smooth and as profitable as possible. I can’t possibly share more with you in this brief message, but I welcome your call to learn more about how we can help you.

Our business is to help you stay in business with inventory solutions that will free you to pay off debt, invest in fresh merchandise, develop new designers, expand your mailing list, and prepare for a successful future. Contact us today for a free, confidential, no obligation consultation.

Sincerely,

Jeff Gordon

It’s the age old question. What should we do with our aged and underperforming inventory?

Should we scrap it? After all, it’s been around for years. But it’s beautiful. Or is it? Your customers have voted on it for years, and they’ve said NO! But maybe someone will come in the store tomorrow and buy it. That’s the dream you keep dreaming.

Scrapping it will give you the least amount of return, maybe 15 or 20% of what you have in it. So what about selling it to a close-out merchant? I guess that will work. But what will he give you? Maybe just a touch over scrap. It still isn’t worth it.

What about spiffing it to your sales staff or putting it in your “half off” sales case? That could work, if in fact the merchandise will sell. People may want to know what’s wrong with it. Nothing really. It’s just old and no one has wanted it for years.

These and other methods are reasonable ways to liquidate unwanted jewelry, but there’s still no guarantee the merchandise will sell, and it costs you money just to hold on to it. So what gives you the best return on your investment for merchandise you need to liquidate?

The answer: having a major inventory reduction event that will generate huge financial returns while eliminating merchandise that has been weighing you down. If this sounds attractive, we would love to discuss the options with you.

Our business is to help you stay in business with inventory solutions that will free you to pay off debt, invest in fresh merchandise, develop new designers, expand your mailing list, and prepare for a successful future. Contact us today for a free, confidential, no obligation consultation.

Sincerely,

Jeff Gordon

The first half of 2018 is in the books, but what do you have in store for the rest of the year? Is it time to step back and make some changes to accomplish your annual goals?

Here’s a formula to help you think through the process:

1) Take a critical look at your January to June performance. Analyze your financials against budget and look seriously at your marketing plan. Has your marketing effort matched your expectations? What adjustments must you make to meet your annual goals?

2) Break down each month in the second half of the year to see what you have to do in sales and gross profit to meet your annual goal. What changes must you make in the expense category to help you achieve that goal?

3) Rally your team behind your assessment. Challenge everyone to increase sales, in particular. Growing the top line will make achieving your profit goals much easier. And make sure your team knows that the store’s success means their success.

Our goal at The Gordon Company is to help you achieve your financial goals. We do this by providing advice and consultation with sale events that change the course of your year, and your future. Allow us to help you do just that. Give us a call today.

Sincerely,

Jeff Gordon

Everyone in retail knows that store traffic was down last year and the challenge has continued in 2018.

The good news is that many jewelers were up in sales, but the reasoning is somewhat mixed. Some jewelers had an increase in average retail sale, while others just had fewer “shopping” trips to their stores as opposed to “buying” trips. By this I mean that at least some of the lost traffic may have been from fewer “lookers” who tend to want to get an education about diamonds and jewelry, but can now seemingly get similar information online. And in many cases, the playfulness of shopping and browsing for information at your fingertips, let alone buying in many cases, trumps the hassle of going out to gain the same knowledge.

Take this example: Amazon Prime users often have multiple individual packages delivered to their home each week. The trouble it takes to leave the house, drive to stores (often in unfriendly weather), and not see what you really need to buy can be frustrating and a waste of time. Today’s time-constrained consumers tend to side with the efficiency of shopping from the comfort of their home. Most really don’t make jewelry purchases this way, but they certainly search for information via the web that will help them make buying decisions.

Regardless of the reasoning of why store traffic is down, it is disconcerting to most jewelers who gauge their business by their busyness, which is not always a good thing. At The Gordon Company we try to help jewelers in at least two significant ways. One is to generate abundant new store traffic that leads to fresh new customers for the store. Every sale we run generates 25 – 50% new customer purchases – people who have never shopped in the store before – leaving our retailers with a much larger email and direct mail list to market with in the future. Another is to help dispose of aged and under-performing merchandise that is weighing every jeweler down. We can usually dispose of 50 – 90% of unwanted merchandise, depending on the type of sale we conduct.

So if you need the kind of “lift” I’ve described, we welcome your call. Our goal is to use our expertise gained over many decades to help jewelers thrive.

Sincerely,

Jeff Gordon

As mentioned last week, our involvement in four different jewelry shows in Las Vegas this year gave us a unique vantage point to hear and feel the pulse of the jewelry business first hand. In addition to the very serious need of reducing inventory levels of aged and underperforming product, here is what we heard in Vegas:

• Most vendors reported fewer overall orders, but larger overall purchases. Buyers were very serious, but were also paying much closer attention to inventory levels than in the past. 

• Manufacturers were getting more and more requests for trade-ins of old merchandise which can be helpful, but some reported such high trade-back ratios that it didn’t make sense to retailers. Most retailers acknowledged that trade-back ratios that are in excess of 3 or 4 to 1 simply get them in bigger inventory trouble down the line.

• Most retailers were very specific in what they needed to buy. Most were focusing on jewelry lines that produced the turnover they needed rather than those that wouldn’t move with respectable inventory turns.

• Retailers weren’t afraid to spend, but were hesitant to open too many new brands, and focused mainly on those brands with a proven track record.

• Items selected by retailers were based more on perceived value than on specific price points. Given the power of female self-purchase today, styles had to have the right look and feel to match the price on high or even modestly-priced products.

• Diamond basics continued to be strong, especially in earring studs and a surprisingly renewed interest in tennis bracelets.

• Retailers are still battling online competition, but a focus on improving the in-store experience is helping to appeal to today’s jewelry shopper.

• Custom jewelry demand from consumers who want things “their way” has seen tremendous growth and jewelers must adapt quickly to this need. This also leaves many stores with a growing problem of inventory levels that won’t go down without a major sale event.

Overall, business is good, but jewelers must be assertive in capturing consumer demand. Thriving in the jewelry industry today is not for the faint of heart. If you can use some help, please give us a call. We’ll be there for you. 

Sincerely,

Jeff Gordon

The Gordon Company participated in four jewelry shows in Las Vegas this year: LUXURY, JCK, COUTURE, and CBG, which gave us a vantage point that few in our industry could observe. We were busier than ever and probably spoke to well over 100 jewelers from every part of the country. 

We mainly interacted with upscale jewelers, who we mostly work with. They are not looking to go out of business. Instead, they are looking to stay in business and grow, yet need to get into a better inventory position to do so. Delightfully, most everyone we spoke to was up in business, many of whom were well into double digit increases this year. This speaks to their marketplace reputation and the attitudes and buying habits of jewelry consumers today. 

The biggest concern these same jewelers had was the excess inventory they still carried, which had been building over time, despite their increased business. This is preventing them from making the changes they feel they must make in their stores to continue to ride the current wave of growth and consumer sentiment, which in turn gets them in line with today’s times. What we heard was a constant refrain that went something like this: I need the newest and best available product in my showcases and more than ever I need to divest myself in aged inventory in order to have the open to buy for the most current, saleable product. 

Our experience at The Gordon Company is that our sales generate better returns than a 3 or 4 or 5 to 1 stock balancing policy offered by many manufacturers. By the very nature of the deals that most vendors offer, retailers are being forced to over buy, which causes an even bigger problem for them down the line. Jewelers have a tendency to put off sale events hoping that something will change in their merchandise holdings and cash flow needs, but this almost never occurs without a hard-hitting change.

Join the many jewelers who are taking action now in order to ride the current wave of business growth. Please give us a call to see how we can help you.

Sincerely,

Jeff Gordon

The Stock Market is at all-time highs, the housing market is still strong, interest rates remain low, the economy continues to expand, and consumer sentiment is more than adequate despite a concerned societal outlook. Why then are retailers in general struggling to compete for customers?

The answer is simple if we just look at the facts. The shopping habits of consumers – and that includes you – have changed. It has become a challenge for traditional retailers to adapt quickly enough to compete using their same historical model of doing business. E-commerce continues to take more market share of almost every consumer product, but as a recent article in The Retail Jeweler suggests, the end of the brick and mortar store is nowhere in sight.

But to remain competitive, all jewelry retailers need to adapt quickly to a changing marketplace and to squeeze more profit out of their business. Decisions about square footage size, staffing levels, and days and hours of operation are all being evaluated for efficiency and viable competitive advantage. Getting expenses and overhead under control and maintaining cash flow and liquidity are critical.

A key aspect of these financial imperatives is proper inventory levels and the right merchandise mix. Most fine jewelers suffer from bloated inventories, most of which include aged and underperforming products. Toxic merchandise is the cancer that keeps creeping into your business and there is no end to it. Having an inventory reduction sale every decade or two will eliminate most of your problems, increase cash flow, provide for future financial stability, and give you options that you never had before.

Please consider these words of advice as a strong warning to act before it’s too late. We’ve lost too many jewelers because they failed to recognize the signs of potential demise. As always, The Gordon Company is in business to keep you in business and is prepared to help you in every way we can.

Sincerely,

Jeff Gordon

Unless you were on a cruise to Antarctica over the past few weeks, by now you are well aware that De Beers has announced its foray into synthetic diamond jewelry. They won’t sell loose, man-made stones and will only position goods under a carat in relatively inexpensive jewelry. At least for now.

The story that broke at the recent Vegas shows has had the industry reeling with reactions that range from horror and disgust to confidence and appreciation for their new venture. In truth, this seems to me like a well-thought-out and well-planned move that should not surprise anyone who thinks this process through.

If anyone really believes that De Beers wants to do anything that will negatively affect its natural diamond business, you probably should exit the jewelry industry right now. De Beers has done what De Beers always does. It is trying to secure and even bolster its $5 billion natural diamond business by controlling the message about synthetic diamonds, rather than leave the propaganda to synthetic diamond producers and distributors. Although many were caught off guard by the announcement, you might liken it to a mother bear protecting its cubs. No company has a more vested interest in the stability and strength of the mined diamond market than De Beers and its partnering countries.

De Beers is planning to drop the price of synthetic diamonds significantly (something that many observers would say will happen anyway over time), and pour tens of millions of dollars into both the production of synthetics and the messaging of synthetics to diamond consumers. In some sense, this bold move shows the impact that lab-grown synthetic diamonds have had on the marketplace, particularly in the past couple years.

How all this will play out over the coming decade will be interesting to watch. Will De Beers cannibalize itself through its controversial move? Is this just a De Beers step in the direction of covering itself with the inevitable decline of natural diamond production in the years ahead? Only time will tell. If there is anything we have learned in past decade, it is that the pace of change today is significant and that a disrupter of markets can have a devastating effect on businesses of every kind. Buckle up and stay tuned as we enter yet another era in the diamond and jewelry world.

One final note. My background is in the diamond and manufacturing industry with GIA, Lazare Kaplan, and Jade Trau. Our president Ira Bergman was a long-time manufacturer at Mercury and President of the Fabricant finished jewelry division, and our CEO Jeff Gordon is a true marketing and sales expert. We work hard to help you in your high-end retail jewelry business. Feel free to contact any of us for advice and counsel on your direction forward.

Sincerely,

Barry Lustig G.G., C.G.

As professionals who run sale events for jewelers, we decided long ago not to own our own inventory. We feel it is the jeweler’s job to own inventory, and our job to help them sell it.

Our decision not to purchase close-outs and unwanted inventory is a strategic one, and is guided by our belief that we want to be completely unbiased when it comes to whose merchandise we sell. In effect, we are going well out of our way to avoid even the subtle appearance of a conflict of interest with our clients.

Call us old school, but this is how we feel, and how we operate. We do bring in augment inventory from key suppliers that is specifically tailored to the brand and image of every store, but there is no added incentive to sell it. Plus, each jeweler we work with has the final say on what additional merchandise is brought into the store and what is excluded from their product mix.

Every jeweler has holes in their merchandise assortment that must be filled with additional augmented inventory. When you work with The Gordon Company, you can be certain that none of that added merchandise is our own, and doubly certain that our primary goal is to sell your unwanted inventory and maximize your return on investment.

Please give us a call if you have questions, or if you would like a free, confidential, no obligation consultation on our extensive services.

Click here for this month’s must see video!

Sincerely,

Jeff Gordon

Every jeweler has the problem of aging customers. It’s great that they have the financial resources to buy bigger and better merchandise, but the tendency of mature clients is to slow down on jewelry purchases, if not stop entirely. And every jeweler loses clients over time simply by attrition.

The biggest challenge for upscale jewelers is to attract and retain new customers. Bridal customers, in particular, are critical because they are young enough to become lifelong clients if we can get them into the store and give them an experience they won’t soon forget.

At The Gordon Company, we expand the reach of every upscale jeweler through creative ways of building their email and direct mail lists, getting people into the store during a sale event who have often never crossed the jeweler’s threshold. Customers tell us surprising stories. We hear things like: “I never knew you existed at this location.” Or, “I never felt comfortable coming into your store.” Or, “I didn’t think I could afford your quality of merchandise.” 

Comments like these are music to our ears because we know we brought new customers to the store who had a great experience and will very likely come back to make more purchases in the future. Attracting and developing new customers is the lifeblood of every fine jeweler’s business. We help jewelers do this. Let us help you, too.

Sincerely,

Jeff Gordon

The refrain we most often hear from retail jewelers today is that traffic is down. How do I get more people into my store? 

 The only way you’ll know is to take counts of actual traffic in and out of your store, and to closely monitor your number of transactions, including repairs, and see what your trends tell you. While you’re at it, take special note of who buys and what they buy, who sells and what they sell, and especially each salesperson’s close rate. All these analytics are at your fingertips if you have a point of sale system, and will help you assess where the needs are. You’ll even be surprised to see that your best salespeople only make one or two sales a day (other than repairs). They need to be calling and emailing clients every day to stimulate traffic and sales when there otherwise wouldn’t be any. We take great pride in our capture of addresses and email addresses, often as many as 50% of the purchasers will be from new customers who never stepped foot inside your store previously.

But why might traffic be down? There are several key reasons. One is that (and this is no bulletin!) all of us are buying more stuff online today, and jewelry of various price points is no exception. According to some reports, as many as half of all U.S. households are Amazon Prime subscribers. While this alone doesn’t signal the demise of walk-in traffic and traditional retail, it does signal a wave-change in consumer purchasing, and retailers need to take note of it.

Mall traffic is most certainly down and this is a function of being over-malled and over-retailed, as well as lifestyle changes and a desire for more and better experiences. Again, it should be no bulletin to you that Millennials, Gen Xers, and even Baby Boomers want more unique experiences when shopping, dining, exercising, traveling, recreating, and otherwise living life to the fullest. Malls are currently changing to become destinations for unique eating and lifestyle experiences, not merely places to go to shop. A wave change is definitely taking place.

So what is the answer for upscale retail jewelers? It’s creating a better experience for customers, and I don’t just mean better customer service. Everyone says they give great customer service. There needs to be more than that today. You need the right store location and the right sized store, the right mix of merchandise and maybe a few key brands, the right niche in your community, a consistent quality experience for customers, and salespeople who don’t just wait for customers to walk in. They need to get them in and know what to do with them when they are in. And if you’re an owner, you still need to work hard, and moreover, you need to work smart. Competitors are going out of business around you, so even this creates an opportunity. Someone is going to have to sell them jewelry, and it may as well be you.

Click here for this month’s must see video!