Alvin Goldfarb Jeweler’s Strategic Consolidation

Seattle, Washington

STRATEGIC STORE CLOSING EVENT

 

Alvin Goldfarb Jeweler is a fine retail store established in 1980 by the Goldfarb family. They started with one free-standing store in Bellevue, WA, just across the bridge from Seattle. In 2005, the family opened a second store in Seattle’s downtown district to leverage the Alvin Goldfarb brand and extend their market reach. The Goldfarbs specialize in selling branded diamonds and jewelry, prestige-brand Swiss watches, designer jewelry lines, and gift items.

The company’s sales declined as a result of the Great Recession, and the decline was disproportionately higher in the Seattle store, where the Alvin Goldfarb name was less established. Sales growth slowly returned to the more well-known Bellevue location, while recovery remained elusive for the newer Seattle store. In effect, management worked twice as hard running two stores without achieving an equivalent return. Two years later, Steven Goldfarb, company president, made the difficult but economically necessary decision to consolidate the two businesses and devote management’s time and company resources to growing the more successful Bellevue business.

The Gordon Company Assignment and Scope of Work:

• Help to close the downtown Seattle store and liquidate excess, duplicated, and slow-selling fine jewelry, watches, and gold jewelry inventory in both store locations
• Maximize the recovery value of the inventory sold, while protecting the high-quality image and reputation of the Alvin Goldfarb brand in the Bellevue and Seattle markets
• Increase customer base, including both email and mailing lists, and transition the Seattle clientele to the Bellevue location
• Prepare sales projections, volume estimates, cash flow, average discounts, margin rates, expense budgets, and operating profit estimates for the event
• Develop a communications strategy that conforms to selected brand-name advertising conditions and limitations
• Prepare daily sales and staff budgets to control expenses and event costs
• Manage and control the sale to react to changes in local market conditions

The Gordon Company Solution and Accomplishments:

• The event increased sales by 628% over the comparable period in the prior year
• Overall, the event did 185% more than the previous year’s volume and exceeded the event’s original sale projections by 158%
• Actual gross profit (dollars) exceeded the plan by 258%, and the entire targeted, non-productive inventory was sold at maximum value

“Quite a few friends in the jewelry business suggested I do the store closing sale internally, but I decided to hire The Gordon Company, and I’m thrilled that I did. I could not have come close to the results they achieved, and the Seattle store closing sale results carried over to our Bellevue store, increasing sales by 10% during the same period.” – Steven Goldfarb