Jared builds second Utah store in Orem
Jared The Galleria of Jewelry is opening its first Utah County store just outside the University Mall in Orem. And no, the recession apparently hasn’t yet taken the steam out of Jared’s expansion plans in Utah.
“People are still getting engaged and getting married. We just have to make sure they have affordable options at our stores, and there are ways to make jewelry more affordable,” said David A. Bouffard, vice president of public relations for Akron, Ohio-based Sterling Jewelers Inc., which operates a total of 1,431 Jared The Galleria of Jewelry, Kay Jewelers and other specialty stores in the United States.
Instead of getting the traditional one-carat diamond solitaire engagement ring, which could retail for about $6,000, some budget-conscious shoppers are now buying rings with a few small stones, which generally sell for about $2,000, Bouffard said. “They can get the same look when the ring is made up of four smaller quarter-carat diamonds that comprise the same weight.”
The Orem location, which is opening in mid-April, will be the second Utah store for Jared, an off-mall destination retail jewelry chain with 164 stores nationwide. Sterling, which entered the Utah market in 2003, also operates a Jared store in Murray and five Kay Jewelers stores in Utah including one located within University Mall. Sterling is the U.S. division of Signet Jewelers Limited, and employs 21,000-plus workers nationwide including more than 50 in Utah.
The 6,000-square-foot store is currently under construction at the high-traffic corner of State Street and University Parkway, just outside the mall at 531 E. University Parkway. The store is in the process of hiring 25 workers and will be managed by Steve Wiser, a general manager with more than 30 years of jewelry sales experience in the Utah market, and Laura Gleason, an assistant manager.
“What we look for in a location is high-traffic, high-volume intersections that will give us great visibility and customers ease of access. Demographically, the Utah market also has college-educated consumers with household incomes of $100,000 or more,” Bouffard said. “The Orem store also meets our criteria for [projected] internal rate of return of investment, which has to be more than 20 percent.”
Having a wide enough jewelry selection that’s also affordable is key to Jared’s growth, he said.
At 6,000 square feet, the average Jared store carries about five times the assortment of an average mall-based jewelry store, he said. The Orem store will carry thousands of jewelry items — diamonds, gold, exotic colored gemstones, precious and semi-precious gemstones, Sea Magic Cultured Pearls by Mikimoto and luxury Swiss timepieces — priced from under $100 to above $20,000.
In an effort to boost sales in existing stores and differentiate itself from its mall competitors, Sterling is focusing promotions on its exclusive brands and merchandise, including three new collections from LeVian, champagne and black diamonds as well as an expanded selection of Russell Simmons jewelry. Its national TV advertising initiatives also feature actress Jane Seymour.
Even though the new Orem Jared store will be located within a stone’s throw of its sister store, Kay Jewelers (inside the mall), Bouffard said there isn’t likely to be much cannibalization of business.
“Jared is designed to meet the destination shopper’s needs as opposed to Kay, which services mall-based shoppers,” he said. “The jewelry assortment at Jared is five times that of the average mall-based store. Jared has 5,000 square feet of jewelry merchandise, while Kay has about 1,200 square feet. And the assortment of loose diamonds, about 10,000 available in Jared’s stores and online, exceeds that of Kay’s, which carries primarily mounted diamond jewelry.”
Also exclusive to Jared is its custom jewelry design and repair center that will mount, clean and repair most jewelry in less than an hour, he said.
One other competitive advantage for Jared is that its credit department is company-run, and not farmed out to a bank, Bouffard said, which is critical especially in light of the still-frozen credit markets. About 50 percent of Sterling’s sales is funded by in-house credit.
“All the credit approvals and authorizations are done by the company. We don’t have to rely on the state of the bank lender. The company has always maintained strict criteria on lending,” he said.
U.S. sales of jewelry have suffered since the financial crisis erupted in September — sales through the year had been on the rise through August but were flat in September, according to industry analyst Ken Gassman of the Jewelry Industry Research Institute. Publicly held jewelers Sterling, Birks & Mayors and Finlay all reported sales decreases in the third quarter that ended in October.
Signet Jewelers posted a wider-than-expected loss of $15.1 million, or 18 cents a share, in the third quarter. Last year, the company posted a net profit of $2.5 million, or 3 cents a share. Third-quarter sales slipped 7.3 percent to $629.3 million.