FLORIDA JEWELER BEATS THE ODDS BY SELLING ITS ENTIRE INVENTORY

–Buxbaum Jewelry Advisors wraps up highly successful sale for Henricks Jewelers of Bonita Springs.

BONITA SPRINGS, Fla. (6/18/09) – Urged on by the likes of personal finance guru Suzie Orman, millions of Americans now separate their “needs” from their “wants” with a near-religious fervor. And as struggling jewelers know all too well, consumers tend to regard jewelry, in particular, as something they must do without until the economy bounces back. How, then, do you explain the ‘everything’s gone’ outcome of Henricks Jewelers’ going-out-of-business sale, completed last month by Buxbaum Jewelry Advisors, a division of Agoura Hills, Calif.-based Buxbaum Group?

Surpassing its volume projections and coming in under budget on expenses, the firm was able to sell every item in an $8 million inventory that spanned thousands of designer pieces and quality gemstones at the 12,000-square-foot jewelry superstore in Bonita Springs. “This 60-day sale proved that when customers know they are getting exceptional quality and price, they will spend,” noted Stevan Buxbaum, Executive Vice President of Buxbaum Group, one of the largest appraisers and liquidators of retail inventories in North America.

Indeed, the sale succeeded despite multiple challenges. Not only was it held during one of the worst national recessions in memory, but by necessity it also had to be conducted after the close of the tourist season, a time when local economic activity slows considerably. In addition, Henricks had run a “going-out-of-business” sale earlier in the year, but, in fact, did not go out of business after that sale.

“Shoppers and the media naturally were skeptical when Henricks announced yet another going-out-of-business sale,” noted Gary Jorgensen, vice president of Buxbaum Jewelry Advisors, which conducted the sale on behalf of the asset-based lender that took possession of Henricks’ inventory at the direction of a bankruptcy judge. “There was a real danger that people would not believe this second liquidation sale was legitimate.”

To counter this, Buxbaum Jewelry Advisors launched an aggressive marketing and public relations campaign. “We did mailings and signage, reached out to the press, hired sign-walkers and placed 250 commercials a week on cable TV for eight straight weeks,” Jorgensen said. “Ultimately, these efforts succeeded. We beat all of our sales projections and, even with this aggressive promotional effort, came in under budget on our expenses. Our clients were extremely pleased.”

Originally founded in 1982 by Henry Grimes and his son Rick (“Henricks” is a play on their first names) Henricks Jewelers was one of the highest-volume independent jewelers in the United States for much of its history. Its holiday promotions attracted bargain-hunters from across southwestern Florida. The retailer, which was purchased by Luxury Ventures LLC in 2003, expanded to other Gulf Coast locations in Naples, Sarasota and Fort Myers, as well as in Alaska—all of which were subsequently closed. In recent years, however, it had begun losing market share to competitors, and its troubles mounted with the onset of the economic downturn, in part because it was saddled by debt acquired during its failed attempt to expand into local and national markets.

The going-out-of-business sale involved liquidating the entire inventory of Henricks’ flagship  Bonita Springs showroom at discounts of 40% to 80% off. It spanned thousands of items, including precious diamonds, rubies, emeralds and sapphires; semi-precious blue topaz, amethysts and pearls; a wide variety of watches (including pre-owned Rolexes), as well as rings, bracelets, necklaces and earrings made from gold, silver and platinum and set with diamonds and fine gemstones. A huge selection of diamond engagement rings was available below jewelers’ wholesale cost.

About Buxbaum Jewelry Advisors/Buxbaum Group

Buxbaum Jewelry Advisors has assembled a team of jewelry professionals that have provided wholesale and retail jewelers with financial solutions for more than 20 years. It offers a wide range of services and can meet the needs of both financially distressed and profitable jewelry retailers and wholesalers. It is a division of Agoura Hills, Calif.-based Buxbaum Group, which has built its reputation for over 30 years as one of the largest liquidators and appraisers of retail and wholesale inventories across North America.

Might?  May?  Could?

Has! Did! Will!

I was involved in a couple high impact jewelry liquidations for retailers in Bonita Springs, Florida and 4 stores in Las Vegas, Nevada. What happened in those situations confirmed to me a strategy I have used for years, cable has made an impact!  Not only as a media that could come first, bought at a bargain and even expose greedy, profit driven agencies.

The major networks are still demanding higher cost per thousands even though viewers are down.  For whatever reason they continue to do this, I can only speculate.  The retailers I worked with had enjoyed what they thought were “the best prices” on all their media buys.  “Oh no, Tom, we get the best price”.  That’s fine, I love to hear that retailers are happy and can focus on doing what they do best, merchandising and selling.  Unfortunately, many have their heads in the sand about what media deals are available to them.

I challenged both jewelry retailers and submitted Cable media buys to counter others that had been presented to them by their “Agencies”.  In Florida and in Vegas, the cable media buy I submitted, offered the same net cost, twice as many spots and used networks that would most likely reach their target demo – a customer looking for, and can afford expensive Designer Jewelry.  The other agencies were selling what they could to make the retailer feel good about the buy; after all, they have done a great job before, right?

Ok, this is how the 2 cases worked out, and then back to why cable is first.  In Florida, the jewelry retailer was excited, my media consultant and I became local heroes because we were able to come in their market and buy the media at half the cost.  Those dollars were reinvested and sales soared for the remaining 8 weeks of the sale.  Cable was a win; win for my client and his company.

In Vegas, however, there was a different response to our ability to crush his long-standing agency’s media buy.  Disbelief.  Anger.  In disbelief he called his agency and it was serious CYA from there on.  He immediately became an ostrich.  He chose to continue buying overpriced media from his trusted agency even though we had documentation that proved the cable company we were dealing with would have accepted our buy.  Our time and diligence was not rewarded except to have a story to tell.  The sad thing is that if he does not shake the sand from his head, but continues to burrow deeper into the ground, so goes his business.

Be bold!  Demand your portion of the savings in broadcast media!

Truth is that deal making is out there now!  Bargains on cable are there to be had if retailers are willing to demand more from their media buyers.  Retailers who are really concerned about making deals should not let their agency swing in the marketing hammock sipping on a Pinot just because something has worked before or the price was easy to stomach.  Challenge your media buyers to give more, make better buys and sharpen their skills to benefit you, not them.

Seriously, you would have thought after many major media buys for 2009 were cancelled or severely shaved back do to the economy, media buyers would have made a better effort to buy right, for the benefit of the client.

I definitely look to cable first!  Why?  Because most retailers I have worked with are focused and concerned at a local level.  That is where it all happens.  Cable is ready to deal.  Know it and take advantage.

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