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Video-Conferencing to sell jewelry


#1

Orchidians,

There was a Wall Street Journal article Nov 5. Headline:

Jewelers’ Outlook Lackluster
Amid Struggle, Some Small Shops Find Ways to Shine

Sales in last year for private jewelers 4% decline.

The article described how in Ann Arbor, MI, Craig Warburton and his
wife made a shift to on-line jewelry sales. Their site is
AustinAndWarburton.com Brenda Warburton, Craig’s wife, designs and
creates their jewelry including wedding rings. The couple shut down
their storefront last May and said goodbye to their highly paid
staff. The couple changed to an on-line business, moved to a nearby
office and installed a video-conferencing system that allows
customers to discuss and see 3-D jewelry models in production.

Are there any Orchidians using video-conferencing systems to design
and sell jewelry to customers they do not meet face-to-face?

Mary A
Jewelry for the Journey

Jewelers’ Outlook Lackluster -
Amid Struggle, Some Small Shops Find Ways to Shine

By EMILY MALTBY

Foss Jewelry was honored by the Maine Legislature in September for
reaching its 90th year in business. But like many jewelry retailers
across the country, the family-owned store may have just celebrated
its last birthday.

“We’ve talked to an accountant and we’ve decided to try to get
through Christmas,” says Anne Winter, manager of daily operations at
the store, located in Livermore Falls, Maine. “At that point, we’ll
see if we will liquidate and close down.”

The store only sold one diamond ring last holiday season, relying on
sales of cheaper, sterling-silver pieces and other gift items to
bolster profits. Then one of the town’s paper mills shut down,
laying off hundreds and crimping the town’s economy. Some days, Ms.
Winter says, she is lucky to make $20 selling watch batteries.

As younger generations become less interested in jewelry and as
Americans gravitate to online shopping for convenience and bargains,
Main Street jewelers and jewelry retailers are struggling to attract
customers. The recession, which has spurred many consumers to think
twice before making a luxury purchase, has added an extra burden,
pushing many to shutter their doors.

According to a census by the Jewelers Board of Trade, the number of
jewelry retail firms has declined more than 5% since September 2007,
when the credit crunch started to take a firm hold on the economy.
That’s a net loss of 1,210 stores, primarily made up of mom-and-pop
shops because the census tallies retailers by name, not by each
store or kiosk location. This means that Foss Jewelry, as a
standalone jewelry store, is counted the same as chains such as Zale
Corp. and Kay Jewelers.

In 2007, sales for private jewelers were up more than 4%, according
to Sageworks Inc., an economic-research firm in Raleigh, N.C. But in
the last year, sales at those establishments are now registering a
4% decline. By comparison, sales dropped 2.3% at clothing stores and
3.3% at florists in the same period. Furniture stores, hard hit by
the housing market, are enduring a 6% drop in sales.

“It’s discretionary items that people stop buying when they are
feeling insecure,” says expert Drew White, chief financial officer
at Sageworks and a credit analyst who researches market potential.
“And there is lack of capital to finance inventory, which is another
thing that is hitting private retailers.”

Wise Jewelers, of Mount Vernon, Ohio, was shut down last February
after 183 years in business. “It was difficult to compete with the
chain stores and the Internet,” says Brian McNamara, who owned the
business for three years before closing it down. “For the most part,
the service and repairs side of the business kept us going, but in
the end, the economy did us in.”

Some jewelers are staving off liquidation by implementing new
business models. Carol Lipper, president of Designer Jewelry and
Handbags, shut down her shop on the main thoroughfare of Millburn,
N.J., in June because she couldn’t afford rent. She laid off two
employees, reduced her inventory and relocated to Livingston, N.J.,
where she is renting a small space inside Handcrafters, a store
specializing in handmade gifts.

“I’ve seen downturns that affected expensive merchandise,” says Ms.
Lipper, whose products sell for $20 to $250. “But I’ve never seen
anything like this, where the moderately expensive stuff is getting
hit, too.”

While it’s been tough building a new clientele, Ms. Lipper thinks
the model has potential. She is in negotiations to rent counter
space at other stores and spas in the area to expand through
satellite locations. She will also give the storefront presence
another try: Just this week, Ms. Lipper signed a lease to rent a
small boutique in Denville, N.J.—for 78% less than she was paying
for her store in Millburn—and has hopes of opening by
Thanksgiving.

In Ann Arbor, Mich., Craig Warburton also made a big change. His
business, Austin and Warburton, hit $1 million in revenues in the
mid-1990s and was growing steadily. His wife, Brenda Warburton,
designed and created all the jewelry in the display cases, which
attracted pedestrians in the downtown area. In 2008, seeing the
consumer shift to online purchasing, the Warburtons launched
AustinAndWarburton.com, a Web portal that allows customers to design
and order custom jewelry, from birthstone necklaces to wedding
rings.

The site took off and the couple decided to shut down the storefront
last May—shedding several highly-compensated employees in the
process—and move to a nearby office. For added convenience, the
couple installed a video-conferencing system that allows customers
to discuss and see 3-D models without leaving home. This year,
Austin and Warburton should post record sales, Mr. Warburton says.

“We changed the size of the business to suit the size of the
customer base,” Mr. Warburton explains. “And we got a chance to
rewrite the rules at a time when a lot of people are going out of
business.”