Month: August 2019

Transitioning Your Business (Part 1)

If you are at or approaching retirement age, you’ve probably considered selling your store. Unfortunately, retail jewelry store sales to an outside party are very rare today. It can be done, but most of those sales are modestly priced and include the storefront, the showcases, some equipment, possibly some aged inventory, and often the assumption of a lease.

Part 1: Can You Really Sell Your Store?

If you are at or approaching retirement age, you’ve probably considered selling your store. Unfortunately, retail jewelry store sales to an outside party are very rare today. It can be done, but most of those sales are modestly priced and include the storefront, the showcases, some equipment, possibly some aged inventory, and often the assumption of a lease. Just getting out from under a multi-year lease is worth sacrificing some dollars in a store sale. Of advantage to the buyer is the mailing list and the goodwill of the store, assuming both are current and have value.

But there is a balance to how many special events you should do during the year because you can’t keep going back to your customers and wear them out with invitations each month. I recommend that jewelers do some kind of special event about once a quarter, not only to stimulate business, but to keep your store associates excited and active in clienteling and selling. This will also keep your mailing and email lists current and up-to-date.

Bottom line, it is really hard to sell a store today for anything close to what you might feel the store is worth. I hope you know by now that your inventory – often dated with much of it underperforming – is simply not worth the original wholesale price you paid for it. It is equally rare for most anyone to simply write a check for your business, and you likely don’t want to be stretched out for years getting payments when there is no guarantee of the continued success of the business. Most banks won’t loan on jewelry stores, and while Small Business Administration (SBA) loans may be a consideration, it isn’t always easy for an individual to qualify.

So if I can’t sell my store, what’s my next best option? If you have family in the business, a good way to go is to let a family member take over the store for a reasonable period of years and pay you out over time. This is still dependent on the effective running of the business for both of you, but if a family member has been involved with the business for years and if you have confidence in the individual, this should be a realistic consideration. If you have no family members in the business, but have a loyal, dedicated employee (or employees) who has been with you for years, you may wish to consider a similar transition with that individual.

In Part 2 of this 3 Part Series, I’m going to elaborate on this a little more and give you some options to consider along the way. Stay tuned, and if we can be of help to you, even for just a phone call and some advice, please contact us.

Sincerely,

Jeff Gordon, CEO

Do You Conduct Special Events?

I’m a big proponent of special events in your store. We find that those jewelers who do them – be they trunk shows, a lady’s night out, community charities, colored gem roundtables, or any such events – generate goodwill, excitement, and important sales in a month that may normally be just “so-so.”

I’m a big proponent of special events in your store. We find that those jewelers who do them – be they trunk shows, a lady’s night out, community charities, colored gem roundtables, or any such events – generate goodwill, excitement, and important sales in a month that may normally be just “so-so.”

But there is a balance to how many special events you should do during the year because you can’t keep going back to your customers and wear them out with invitations each month. I recommend that jewelers do some kind of special event about once a quarter, not only to stimulate business, but to keep your store associates excited and active in clienteling and selling. This will also keep your mailing and email lists current and up-to-date.

Sometimes jewelers conduct sale events each and every year, but we have found that your customers get used to this and they gradually tire of it. Eventually, such sales simply don’t work, and in fact work against your normal business because people know they can wait for you to hang a sale sign up every year.

We are often asked about special, one-of-a-kind inventory reduction sale events that are, in my view, very different from the aforementioned special events. When inventory stacks up over many years due to aging – and this happens to everyone in the business – you need a unique selling event that accomplishes a much different task – a necessary and significant reduction in inventory for financial reasons. Monetizing that inventory through a special sale event is a science all its own with a formula that requires expertise not normally found in any jewelry store. This is where The Gordon Company shines because of our vast experience in the process.

If you have questions about this unique kind of sale event, please contact us and we will be happy to answer your questions and provide insights that will no doubt help you. We look forward to hearing from you.

Sincerely,

Jeff Gordon, CEO