Rapaport Magazine


RAPAPORT... The last stop for diamonds is the retail store. Here is a behind-the-scenes look at what is happening at retail in the U.S.

Bidz Acquires Whitehall Trademarks
Bidz.com bought the intellectual property and trademark registrations of Whitehall Jewelers through its bankruptcy auction, including the trademark names “Whitehall Jewelers,” “Lundstrom Jewelers,” “Marks Bros. Jewelers” and “White Star Private Label.”

Bidz.com also purchased Whitehall’s customer mailing list, which contains more than 800,000 names, addresses and customer transaction logs. The company did not disclose the value of this acquisition.

Blue Nile Redesigns Website
Blue Nile launched a redesigned website, www.bluenile.com, which included new features and enhanced product images and descriptions. The company’s trademarked Build Your Own Ring tool is now more advanced, allowing shoppers to watch while their ring evolves into a finished engagement ring. Blue Nile also removed the need to click for more product information by incorporating detail flyouts with each image.

The diamond search feature now contains an intuitive comparison feature that enables customers to evaluate diamonds side by side, according to the company’s statement. The new site is also touted as providing enhanced navigation and product filtering capabilities to give the shopper more control.

OmniReliant Acquires Abazias
OmniReliant Holdings announced its acquisition of 100 percent of Abazias Inc.’s issued and outstanding shares. Paul W. Morrison, chief executive officer (CEO) of OmniReliant Holdings, stated, “Oscar Rodriguez and Jesus Diaz have built a strong team and formidable ecommerce website for diamonds and jewelry that competes with such companies as Blue Nile. With our studio, we have the ability to give access to the Abazias team to film diamond and jewelry segments and instructional videos for their website and even to launch their own jewelry TV channel. We believe with our current synergies we can continue to grow both companies’ prospects in the direct response industry and ecommerce.”

Abazias was featured in Internet Retailer Top 500 Guide,® showcased as one of the 500 trailblazers who have helped make internet retailing one of the fastest-growing segments of the U.S. retail industry. The staff editors of Internet Retailer chose to include Abazias based on its sales, corporate strategies, merchandising and marketing tactics.

Tiffany Sues Westfield, Opens Fourth Singapore Store
Tiffany & Co. sued Westfield, Australia’s shopping center giant, in an effort to prevent Swedish clothing retailer H&M from opening a new store in Westfield’s Century City, California shopping mall. In the lawsuit filed in Los Angeles Superior Court, Tiffany claims the close proximity of H&M to its premises in the mall will damage its reputation. Tiffany argues that its contract with Westfield protects it from retailers “whose merchandise and/or price points are not considered to be luxury, upscale or better by conventional retail industry standards” attempting to open near its own store in Century City.

“The location of the H&M store will cause irreparable injury to Tiffany’s business reputation as a luxury retailer, a reputation that Tiffany has enjoyed and worked hard to maintain for more than a century and a half,” Tiffany’s lawyers noted in the court documents.

The H&M store, which is currently under construction, is expected to open before Christmas. H&M is a rapidly expanding chain that has branched out from its base in Sweden to 33 other countries, with more than 1,800 stores worldwide. The brand is known for offering hip clothing at reasonable prices, but Tiffany does not see it as an appropriate fit for Westfield’s outdoor Century City shopping mall, which is located in an upscale suburb shared with Beverly Hills, Bel Air, Holmby Hills and Westwood and features valet parking. The mall also features other high-end stores, including Louis Vuitton, Coach, Hugo Boss and Cole Haan. Additionally, the mall includes the lower-end chains Gap, J.Crew and Bebe and fast food outlets, such as Subway.

“H&M is not a luxury or upscale retailer,” Tiffany’s lawyers argue in the filing. “H&M is at best characterized as a ‘popular-price’ mass-merchandise clothing retailer.” Westfield, Tiffany and H&M declined to comment on the lawsuit.

In related news, Tiffany & Co will open its fourth store in Singapore in the spring of 2010, according to a company statement. The 2,750-square-foot boutique will be located in Singapore’s Marina Bay Sands Shoppes, a new retail center for luxury brands.

Tiffany also opened a less formal store at University Village in Seattle, Washington. This shop offers a more relaxed sales environment to encourage customers to discover their own style. Jewelry is displayed on tables, enabling customers to touch pieces without asking for permission, and salespeople carry handheld sales registers. Tiffany opened a similar store in 2008 at the Americana Shopping Center in Glendale, California.

Luxury Institute Survey Finds High-End Spending Declines
The Luxury Institute released a survey that revealed lower interest and spending levels in luxury products, based on the responses of 427 participants with a median age of 51, an average annual income of $250,000 to $300,000 and an average net worth between $2.5 million and $3 million.

Forty-eighty percent of these respondents said luxury products are no longer exclusive because they are too accessible, with 40 percent stating that luxury brands are becoming a commodity and 52 percent saying that luxury brands that also sell products for mass consumers are no longer luxury brands. Only 7 percent of the wealthy respondents reported that they will spend more on luxury goods and services this year, although 21 percent said they are likely to spend more on discounted goods and services. Fifty-five percent of those who will be spending more said they will buy more of what they need than what they want.

“I think the frugality will continue in luxury spending. It will be a tough slog and will be at least another 12 to 24 months before we see any growth rates in spending,” remarked Milton Pedraza, the Luxury Institute’s chief executive officer (CEO).

Grant Thorton Offers Best Practices for Recession
Corporate advisory firm Grant Thornton shared the best practices that are emerging in the recession-weary retail landscape.
  • Balance and integrate traditional stores and online resources.
  • Utilize sophisticated sales analysis to drive store location planning.
  • Consider whether your products may be suitable for a private label by reviewing consumer price consciousness and the product’s complexity.
  • Analyze which green products to offer and emphasize.
  • Be creative with loyalty programs. Wine tasting events, fashion shows, free shipping, discounts, product guarantees and generous return policies are all good ideas to consider.
  • Calculate and assess return on investment (ROI) for pricing and inventory levels, as well as the tax ramifications for inventory levels and gift card revenues.
  • Manage costs through a structured sourcing approach, ongoing supplier measurement and contract compliance.

Article from the Rapaport Magazine - October 2009. To subscribe click here.

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