Rapaport Magazine

Tuxedos & Diamonds

By Nancy Pier Sindt
RAPAPORT... The name and image of the Jules R. Schubot Jewelers have been synonymous with the city of Detroit for almost a century. Founded by its namesake in downtown Detroit in 1917, the retailer has changed venue only once: to move in 1975 to a suburban location in the neighboring city of Troy. The current store is a luxurious, 3,800-square-foot oasis in an upscale office building, adjacent to The Somerset Collection, a prestigious shopping mall.
During the early part of the twentieth century, when Detroit was one of the country’s fastest-growing cities, its prosperity was led by the burgeoning automotive industry. The city was home to wealthy corporate executives, as well as entertainment and sports figures, who liked to display their wealth with impressive and rare jewelry. Schubot became known for large diamonds, top-quality jewelry and personalized service.

One of the many anecdotes about the founder concerns an incident that took place during the 1950s. Molly Berns, wife of the co-owner of New York’s famed “21” club, was photographed by the restaurant’s house photographer proudly wearing a 21-carat diamond — which had been sold to her by Schubot the day before.

In 1970, Jules turned over the ownership of the store to his son Douglas, who, with his wife Sydell, carried on the store’s tradition of offering important diamond jewelry supplemented by selections from some of the world’s top designers. Douglas and Sydell were among the very first American retailers to attend the BaselWorld watch and jewelry fair, where they sought out new and unique designs for their store. Among their finds were Italians Picchiotti and Buccellati, Americans Henry Dunay, Michael Bondanza and Gurhan, and Swiss watchmakers Blancpain, Hublot, Piaget and Jaeger-LeCoultre.

In November 2007, the couple turned over the reins of the store to their son Brian, and, in honor of their own retirement, staged a very successful blowout “retirement” sale of diamonds, gemstones, watches and gifts. Merchandise ranged from new items to pieces that had been in the vaults for years. “When you’ve been in business as long as our family has, a thorough review often reveals some interesting finds that even we had forgotten about,” says Brian.
Diamonds Rule

Having now completed his first year as president, Brian is looking to the future.

That future, and particularly the current market, presents many challenges, he admits, but he plans to continue to lead with his store’s strength: diamonds. For Jules R. Schubot, diamonds are by far the most important merchandise classification, contributing an estimated 60 percent to 70 percent of total sales. Interestingly, it’s not diamond engagement rings, but large, mounted diamonds, beginning at 2 to 3 carats and larger, that top the best-seller list.

“Big diamonds have always been a part of our core business,” Brian says. Historically, the Schubot family has maintained a close relationship with its major diamond suppliers. There used to be a small network of suppliers for bigger stones, Brian says, but now, with internet trading and selling, the picture has changed. Currently, Schubot’s website is largely informational, but it is building an infrastructure to turn it into a viable ecommerce site in the future.
In its quest to offer special diamond pieces to its clients, Schubot has sold a number of natural colored diamonds, including some yellows, pinks and even blues. The current website pictures several rings set with yellow, pink and orangy-pink diamonds. However, white diamonds make up the bulk of the store’s sales.

Substance Over Flash
Brian says in the current retail climate, shoppers who can afford it want less bling and more quality. “People are spending more on substance than flash for cash. They want smaller, but better-quality stones.” Average qualities here are H color and better, SI clarity and better. Best-selling styles are, for the most part, fairly basic items, according to Brian, but basics with enduring value. For example, popular right now are diamond hoop earrings in a variety of sizes. It’s hard to put an average price on diamond sales, he notes, but at today’s rates, a 2- to 3-carat diamond can range from $20,000 to $50,000.

Even wealthy clients are watching their purchases. “Consumer willingness to spend is going down and prices of diamonds are going up,” Brian concedes. As an example, he refers to a gentleman who has returned to the store more than once to admire a $50,000 diamond watch. “It’s flashier than the style he’d usually wear and he was concerned about taking a ribbing from his friends if he bought it,” the retailer says. To date, the customer hasn’t purchased the watch.

Despite its considerable designer offerings, Schubot merchandises the goods by stressing the store’s name and reputation rather than that of the brand. “There is very little signage for designer brands,” explains Brian. “We don’t hide who the designers are but we do not showcase the jewelry by brand. Our customer is looking for style, not designer. They buy for the style and look rather than who made it. We offer them the Schubot selection, an edited collection from the designers.”

Community Associations
In keeping with its long-standing relationship with the city of Detroit, the retailer is active in many business and social associations, including the Troy and Greater Detroit Chambers of Commerce. “It’s important to maintain a position as part of the community. We participate in all major social events in the city. My father has four tuxedos,” he laughs, “and there are some weeks when he wears them all.” The retailer’s beneficiaries include Detroit’s art institute, the symphony orchestra, opera house and ballet, as well as local hospitals and charities. “There is no specific group that we support exclusively,” Brian says, but instead, the store donates jewelry or contributions to a number of causes on a rotating basis.

For in-store events, clients are invited through personal calls and mailed invitations; for fund-raising events, mailing lists are provided by the charity. There is usually one major charity gala per year. “We always have to give them new reasons to come in,” Brian says.

A cornerstone of this retailer’s business is impeccable customer service. In addition to its exclusive selection of diamonds and jewelry, services include appraisals — Brian is a graduate gemologist and a certified gemologist appraiser — and an in-house shop that produces custom pieces and remounts. In addition to fine jewelry and watches, the inventory includes estate jewelry, high-end crystal and sterling silver giftware.

Article from the Rapaport Magazine - December 2008. To subscribe click here.

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