Turnaround – Jewelry Manufacturing
They had it all - a distinguished product, 90+ year legacy, superior production methods and a loyal customer base. This firm was on the way to insolvency as a result of obsolete management practices including failure to find advantage in a shifting market. Production lead time was unacceptable, the customer base was losing faith and management was tied to obsolete ("we always did it this way") methods. Few products of this type were still made in the US. The competition was using their overseas savings to invest in marketing. Funds were not available to compete in the mass media to build customer recognition.
Our assessment led us to the conclusion that retailers were no longer holding up their end of the bargain. The jeweler was content to let the manufacturers' advertising drive demand but to the detriment of these very same retailers. Although our client had a very provocative product story that challenged the competition, most retailers were aligning with nationally advertised products to fight well-financed big-box competitors.
A “hot model” inventory and selling strategy allowed the company to build quantities of stock parts and streamline delivery with 40% less inventory. Our strategy was to partner with the strong independent jewelry retailers to become their group’s premium US line. The plan was centered on allowing the big brands to drive in the traffic. But, once in the store, the seller would invest time in the product feature story and win a more profitable sale. Reinvigorating the company from the top, down to the shop floor and out to the sales force was required.
The strategy of partnering with the jewelry retailer and educating the customer began to bring results. The company was sold at the end of our engagement and, we understand the brand continues to return increasingly positive results to the new owners.