With so many retail jewelry stores owned by Baby Boomers, it isn’t surprising that many jewelers are involved, or at least considering, some form of business transition. While such transition may be to the next generation within a family, more and more we see retirement transitions of many different kinds: management buy-outs, sales of empty stores with or without a firm’s intellectual property (store name, goodwill, mailing lists, etc.), or simply just a store closing with retirement when a jeweler is done. Most jewelers want to know what their options are and what will bring them the greatest monetary return for what is often a life-long investment of time and energy in the business.
Because most jewelers have a considerable amount of their personal wealth tied up in inventory – much of which is aged and underperforming – a thoughtful, comprehensive strategy needs to be developed and implemented to maximize a jeweler’s return on investment. Many times this means raising a significant amount of cash through a serious and well-thought-out plan to significantly reduce or eliminate merchandise.
But sometimes it isn’t a business transition or retirement that is desired. Every jeweler suffers from the unfortunate accumulation of unproductive inventory, so it is necessary at least once a decade to clean house and monetize aged product. This is vitally important in order to ensure proper cash flow and redeem a reasonable return on investment of merchandise purchased, in many cases, years before. This also allows jewelers to operate more effectively with their Point of Sale systems by lowering needed levels of inventory in today’s changing marketplace.
The most important element in all of this is to identify your goals as an upscale jeweler and business person, and to develop a plan to execute on those goals with the greatest possible assurance of success. Some jewelers try to formulate a plan to do it on their own, but our experience over many years has convinced us that the greatest net return for jewelers can only be realized through the use of outside counsel and the professional support that comes with it. This is exactly what we do at The Gordon Company, and if we can help you in any way, give us a call and we’ll provide a free, no obligation consultation.