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If You're Thinking About Opening a Retail Store of Your Own . . .
by Frank Stankus

Whether you're dodging crowds on Madison Avenue, or strolling down a cobblestone road in downtown Burlington, Vermont, you'll likely witness what may be the next stage in the evolution of the designer jewelry movement. From big cities to small towns, designer galleries, jewelry shops, and major signature stores are popping up everywhere, as designers in increasing numbers are becoming retailers as well as wholesalers.

"Since 1998 alone, more than 25 designers have been enticed by the other side of the business," says Cindy Edelstein, president of Jewelers Resource Bureau, a marketing and communications agency that specializes in designers. "In the past five years," she explained, "designers have been looking at their options. Opening retail spaces gives them expanded artistic and lifestyle choices."

While some are nationally-recognized designers who open stores selling their own branded jewelry, watches, and related products, most are unfamiliar to the general public. For every David Yurman--who opened his flagship store in New York City in 1999--there are dozens of designers with far smaller outlets scattered across the country.

Their reasons for making the transition from designer to retailer are as varied as their jewelry styles, but all attest that opening a retail venue has taken their business to new levels. And like any business venture, opening a store requires plenty of forethought. From finding space to building to running the operation, each step requires planning for the best--and preparing for the worst. Because there will be hurdles such as learning curves, time constraints, and competition, overcoming them is all part of the business.

Making Up Your Mind

Before you make the decision to get into retail, it's important to ask yourself why it's the right move for you. Taking a close look at your current business, your clientele, and your lifestyle can help.

Tammy Kohl of Taköhl Designs in Chicago was growing increasingly frustrated with the way many retailers presented her jewelry. "I found that stores weren't displaying my stuff correctly, and it was difficult to get retailers to present me as I wanted," she related.

Most stores had only a few of her pieces grouped together, and in some cases without her name listed anywhere nearby. And they weren't advertising her work. So she took out her own ad for one of her Takohl Treasure Rings, and directed interested consumers to visit her at her "not-so-consumer-friendly" offices which were on the second floor of a building in the meat-packing district. The ad drew a terrific response, so she repeated it, and within a short time had a steady stream of customers trooping upstairs for the advertised jewelry and for custom work. "It got to the point where I was making enough money from these sales that I could get a nice space," she said.

For Martina Windels of Providence, Rhode Island, becoming a retailer had as much to do with "being tired of schlepping around the country" doing wholesale shows as anything else. What also helped convince her to try it was the fact that Providence was undergoing something of a renaissance. Like Kohl, the idea had been a topic of conversation among her designer friends whenever they would get together. "A bunch of things came together" in 1998, she said, and Windels, with no significant retail experience whatsoever, opened Martina & Company in a four-floor historic building in Providence two and a half years ago. What surprised her, she said, is how much she enjoys the job. "I learned that I like it a lot."

It was the opportunity to expand existing business that influenced designer Bill Richey and his wife Marlene of William Richey Designs in Portland, Maine to open a retail gallery. "To a large extent, our year ended in November," said Marlene Richey referring to the wholesale side of the operation. "Having a retail shop gives us a chance to continue making money, especially in December," she explained." It helps cash flow."

Designers ship most holiday wholesale orders to the stores before Thanksgiving and they often don't get paid until January. With a retail store, designers can immediately reap the benefits of the holiday rush. So for the Richeys, a gallery seemed a logical next step. "For years, I used to tell other people how to sell designer jewelry," Marlene continued. "Now I can do it. I'm heeding my own advice, and, what's more, I'm good at it."

More and more, designers are finding that the line between retailer and wholesaler is blurring. Paul Klecka of Paul Klecka Inc. in Chicago came to that realization several years ago. He noticed that many retailers had their own private label jewelry. Conversely, he found that as a wholesaler he was heavily involved in the retail aspects of the business. He created collateral material to accompany his merchandise, trained sales staffs at stores that sold his work, and even did actual selling during personal appearances.

"We [were] already pretty much overlapping anyway," said Klecka. "Why not take that tiny step and open a retail outlet?" The answer to his question was a clear "Why not?"

If You Build It . . .

If after considering your reasons for opening a retail store, you too find yourself asking the question "Why not?", don't stop there. The next three questions you'll have to answer are where, when and how.

While some designers scour their cities and towns for affordable space, others don't have to look farther than their current workspace.

The Richeys had such a situation when retail space opened up on the ground floor of the commercial building that houses their shop. In November 2000, they opened their 500-square-foot gallery in that street-level location in time for the Christmas season. Now Marlene divides her time between the gallery and the workshop.

Klecka looked far and wide, even considering a suburban mall, for a location for the Klecka-only signature gallery he was planning to open. He settled on an 800-square-foot studio on the 22nd floor of the Michigan Avenue building he currently works in. Dubbed the "Magnificent Mile," Michigan Avenue is renown for its high-end luxury shops -- and their equally upscale clientele.

For some designers, serendipity comes into play.

Timothy Grannis of Burlington, Vermont, had always thought that owning a retail store would be interesting. Then, he says, "one day, I was walking down a street and saw that a dry cleaner with a big glass storefront had just moved out. The space had a tin ceiling and other nice features." Within a few months, he was in business.

Kohl, for instance, found "a clean, modern yet earthy and warm" space and had it within a week.

Whether you find it in a day or a year, what's most important is the preparation you do in the time between purchase or rental commitment, and opening. If you're a jewelry designer planning to moonlight as an architect or an interior designer, take note: It takes a lot longer to build this kind of gallery.

For example, Cathleen Bunt of Kihei, Hawaii, wanted to open her designer gallery -- a 1100- square-foot space that would hold her workshop and offices -- in time for Christmas 2000. Due to delays beyond her control, the store wasn't ready until January 2001: A building boom on Maui kept construction workers busy elsewhere; the custom cases she ordered took months, not weeks, to make; and she had to send back five shipments of tile before the right color was delivered.

In addition to those circumstances, Bunt readily attributes part of the delay to the fact that she, a meticulous designer, undertook the project with someone who is as ambitious as she is, her boyfriend, architect James McCall. "The plans got bigger and bigger as the gallery evolved," she says. "Unless you're doing a simple build-out," she advises, "it's going to take more of your time, money, and energy than you think, especially if you're going to be part of the decision-making."

In her case, the actual basic construction took the three months that was estimated by the contractors, but the finishing work took a lot longer -- more than three additional months -- because of the attention lavished on the details. The carpet, for example was custom-dyed to match the decor. "I think mine was an extreme case," admits Bunt, who volunteered the fact that her final costs nearly doubled the original estimate. But she is ecstatic with the way things turned out.

But even smaller-scale "build-outs" often take longer than expected. Marlene Richey, for example, didn't expect to spend two months planning the couple's 500-square-foot gallery. Her advice to anyone considering going into retail is to give themselves a month's cushion if possible.

Grannis got on the good side of his contractor, he revealed, by cleaning up the debris every night after the workers went home. That way, the crew had a clean place every morning to continue their work.

Setting Up Shop

Once you're in your new digs, you'll have to establish some ground rules. First, consider if you'd prefer an open-door policy or if you'd rather see clients by appointment only.

Three weeks after opening Takohl in December 2000, Kohl decided that having an appointment-only policy was the only way to go. She was her only employee, and too many curiosity-seekers were taking her away from her design work. Unlike Kohl, the Richeys have a partnership that allows them to remain open to the public; Marlene manages the store while Bill continues designing. It also helps that their place is situated in the "arts" district of town, and that visitors staying at the luxury hotel across the street are often lured into the shop by the numerous galleries in the Richey's building.

Not only do you have to think about those you invite into your store to shop the shelves, but also those you ask to stock the shelves--other designers, that is. Although many designers see their retail stores as a means of enhancing their brand, they are also aware that selling the work of other designers helps their business. "It's a good idea to diversify," says Bunt.

Most designers are careful not to sell any other designers' work whose styles conflict with theirs. "I have only a general rule, that the work be complementary to mine," says Bunt. "If it's too different in general character and material, the kind of clientele I have won't buy it." for example, she doesn't carry much silver.

And because they know how frustrating pay delays can be, designers are careful about making payment arrangements with other designers whose work they carry.

Susan Helmich of Monument, Colorado, who carries only five or six other designers in her gallery, will not take work on consignment. She buys all of the pieces she sells. "If you own it, you're going to try harder to sell it," she says. "It's crazy but it's the only way to do it in fairness and appropriateness." she says. But, she adds, "it's taking a lot of capital."

But capital is one thing that these entrepreneurs often have little of after setting up their retail operations, so they generally arrange to have a mixture of consigned and purchased pieces.

"I called up friends, said 'I don't have too much money,' and asked 'What can you do for me?'" said Grannis. In his case, he had amassed enough friends and enough goodwill to stock his store with the work of a dozen designers at opening. That number has grown to more than 30. The percentage he has in inventory as consignment is constantly fluctuating but doesn't go higher than about 20 percent. For Bunt and Windels the number of designer on board is about 20. "It's important to have variation in style and price points," comments Windels.

Regardless of how many other artists' work they carry, designers often sell only the merchandise of colleagues whom they know personally. "The better we know the work, the faster we can sell it," says Kohl. Consumers enjoy learning about the story and the person behind designer jewelry.

Being sensitive to other designer's needs is important -- as is being sensitive to the traditional retailers in your area. Some stores -- especially those that carry your work -- may view you as their direct competition. It's a good idea to inform your retailers of your new business venture to put them at ease.

"I called all my stores and told them I was opening up a shop, and I also told them I would honor our existing business relationship," said Helmich. That pretty much put everyone at ease, she said, and now she often co-ops advertising with them. "Besides," she added, "most clients don't want to leave a store that they've been with for a long time." Maintaining good relationships requires care not to underprice other retailers, as well as referring customers to them when appropriate.

"When I announced this to my customers, I got almost unanimous congratulations and wishes of good luck," said Klecka. "The nearest stores were a bit concerned, but we reassured them that we would not be taking away any of their business." How? Klecka elaborated: "This location gives us a more pronounced presence in the marketplace. In theory, all of the other retailers should benefit from this investment in the same way that building a Niketown store enhances the sales of Nike sneakers everywhere." Kohl said other retailers also benefit in another way. "I try new marketing ideas here first," she said. "I want to make sure they work."

Some designers stress to local jewelry shopkeepers that they are in a slightly different business. "We're not trying to compete with jewelry stores. We're going after a niche market, people looking for the unusual," says Richey, who is also thinking of doing a gallery-only line.

Learning the Ropes

While you're in the process of establishing yourself as a retailer, it's also important to be prepared for the drawbacks associated with such a move.

"I feel I will basically be recovering for the rest of the year because I was not able to be at the bench for maybe three months," said Bunt. However, her wholesale production was not greatly affected because her bench jewelers kept working as usual. It was only certain pieces that required her expertise that wre delayed. Grannis, who specializes in anticlastic raising, said he was out of production for about two months. Since he and his staff were busy setting up a store that houses both a gallery and a shop, they had nowhere to do benchwork "We didn't make all of our wholesale deliveries the month we opened," says Grannis.

But this was to be expected, he adds, because of the nature of his craft. "My production work is done by the highly skilled craftsmen who were hammering nails and setting up shelves in my new store; it's not something I can contract out. For someone who does a lot of casting , or who has a separate workspace, the lost production time might be less."

Klecka, on the other hand, said he had no disruption at all. He attributes this to the fact that he was able to delegate responsibilities to a superb staff.

In addition to budgeting your time, you'll also have to factor in the learning curve. If you're like most designers who open their own stores, your retail sales experience is limited to selling in trade show and craft show venues. Although you may have worked one-on-one with clients who buy your custom work, dealing with the public does require some getting used to--or some help.

Grannis, for example, asked his wife, Susan Hurd, to join him as gallery manager. Between the two of them, they have divided up the responsibilities at the gallery, with Hurd taking charge of sales, training and managing the gallery and Grannis running the production end of the business.

However, if you choose to go it alone, take note: You can't simultaneously work at your bench, order supplies and sell your jewelry to clients. It's important to set a schedule without spreading yourself thin -- or to consider hiring help.

Reaping the Rewards

Despite these hurdles, many designers who open retail stores find that the experience has had a positive effect on their business. In essence, the retail aspect of many designer jewelry operations is intended to support the wholesale side, either financially or or as part of a branding strategy

According to Klecka, putting your samples on display all year long rather than leaving them in the vault a good deal of the time is better management of inventory. Also, having a 12-month, appointment-only gallery gets away from the retail cycle that emphasizes the last eight weeks of the year, he adds.

The insight that designers-turned-retailers gain into the selling process often helps them become better wholesalers. "By being in closer contact with the retail public," says Bunt, "you learn more of what the customers want, so it becomes easier to sell [to] retailers at the wholesale shows."

The constant feedback from buyers also helps designers plan their lines. "Being in retail has helped us figure out what to keep in our wholesale line," says Richey. "We had a profile collection that we pretty much stopped offering to wholesalers because it was seven years old and we figured that they would be bored with it", she continued," But the people coming into our gallery still really loved the pieces. So we kept them in our showcases, and then let our wholesalers know about the success we were having with it. It's now one of our strongest lines"

At the least, having a retail store capitalizes on the oldest and strongest marketing practice in the book, word of mouth. "It's a great way to connect with the ultimate client, the consumer," says Helmich.

When polled about what advice they would extend to other designers considering a move into retail, everyone offered a different piece of advice. "Visualize what you want first, " suggested Klecka. "Consult with someone who has experience with negotiating commercial leases," advised Grannis. "Make sure the specialist at your insurance company knows what he's doing," warned Richey. "It's very hard to run a wholesale business while you're trying to build a store," observed Bunt. "Opening your own store forces you to write a real business plan, and that has actually been very helpful even though the projections weren't very accurate," commented Windels. Clearly, everyone learned a lot. Cathleen Bunt, chuckling as she said it, put into words another lesson that the others only hinted at: "As a designer I used to think 'What are these retailers complaining about, that it's so much work?' Now I know!"

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