14 STATE OF THE MAJORS 2018 some smaller-scale companies—single-store operations that differentiate themselves by carrying unique brands or doing top-notch custom work, local artisans making one- of-a-kind products, or entrepreneurs with a compelling backstory and a command of social media. As an example, Sherard brought up beau- ty mogul Anastasia Soare. Soare is a Roma- nian immigrant who built a reputation in Beverly Hills as the “Eyebrow Queen” and, from there, grew her cosmetics company into a multimillion-dollar business by being an early adopter of Instagram, where she shows followers not just new product but also how to apply it. Another case in point with closer ties to the jewelry industry is MVMT, the watch and accessories company Movado Group Inc. just acquired. Two college dropouts, Jacob Kassan and Kramer LaPlante, started the company after raising $300,000 from a pair of crowdfunding campaigns. In just five years, they have turned MVMT into a $70 million a year business by employing an effective digital strategy that includes a strong social media following. Movado announced in August that it would pay $100 million-plus to acquire the company, with the deal expected to close in October. Kassan turned 27 in June and his business partner LaPlante is 26. It used to be, Sherard observes, that retail was a Catch-22. Companies could only get retail distribution if they had a proven track record of selling in retail, which, obviously, is difficult to obtain if a company can’t get in in the first place. But the internet—or, more specifically, the direct access to consumers that it provides—has changed that. “You have a platform now with some of these e-commerce websites. If you can get on Net-a-Porter or a local jeweler’s website … It’s never been a better time to be trying to build one of those small brands,” he says, while acknowledging that starting a small business is by no means easy. But, the internet has created possibilities for start- ups that didn’t exist before, he believes. The changes in retail brought about by technology have left some retailers stranded in a sea of sameness, unable to cling to being the lowest priced while, at the same time, lacking a compelling brand story or differentiated product to buoy their business. Sherard says jewelers that are selling “general sapphire rings” that are not particularly well-made or connected to a popular designer find themselves in a tough spot. It’s the same mantra National Jeweler columnist Peter Smith has been repeating for months. In hisAugust 2018 column titled “Who’s Driving DIAMONDS INTERNATIONAL Diamonds International ranked No. 31 out of 42 on the “$100 Million Supersellers” list and No. 7 on the “Top 50 Specialty Jewelers” list, with 130 locations selling watches and jewelry as of the end of 2017. Diamonds International operates jewelry stores at ports-of-call for some of the world’s biggest cruise lines, which normally means it is positioned perfectly to cater to consumers who are carefree and marking major milestones, selling well-known watch brands and its patented diamond cut, the Crown of Light, to consumers celebrating significant anniversaries, engagements and birthdays. However, many of its major ports in the eastern Caribbean were hard hit during the 2017 hurricane season, with Maria and Irma taking a devastating toll on islands including Puerto Rico, Tortola, St. Thomas, St. Maarten/St. Martin, Antigua and Grand Turk. In late August, National Jeweler caught up with CEO and co-Pres- ident Morris Gad, Director of Operations Michael Gad and Vice President of Marketing Thomas Tanner to talk about how the company rode out the storms of 2017. Morris Gad said half the chain’s stores in the eastern Caribbean were closed at some point during the year, with some reopening in as little as a month and others taking longer. The Diamonds International store on the British Virgin island of Tor- tola, which Gad said sustained “tremendous damage,” didn’t reopen until nearly a year after Hurricane Irma slammed into the island. (Though much has been written and reported about the slow recovery of Puerto Rico after Hurricane Maria, the retailer’s store there was in Old San Juan, which had power restored rela- tively quickly; Gad said the store was able to reopen in spring 2018.) After the storms swept through the eastern Caribbean in late summer/early fall, Dia- monds International shipped food, water, generators and other supplies to impacted islands and helped its employees rebuild their homes. It also set up a hurricane relief fund and encouraged vendors to donate. “The loyalty we got from our staff and the community helped us rebuild quickly and, in turn, we weren’t too affected by the hurricanes,” Gad said. Also aiding were the islands’ governments, as local officials were eager to speed the return of tourism, the No. 1 industry on the majority of islands in the eastern Caribbean. Today, he allows, the company is still losing money on some of the islands impacted by the 2017 hurricane season but, “we felt in the long run, it’s the right thing to do. We’re investing in our people.” Gad said the company was not forced to permanently close a single store as a result of the storms. THE STATE OF THE MAJORS THE DIAMOND INDUSTRY JEWELRY DESIGN THE COLORED STONE MARKET “[Amazon has] invested heavily in jewelry, and hit a sweet spot—a combination of price point and designs.” — Edahn Golan, Edahn Golan Diamond Research & Data Ltd. SNAP SHOT Continued on page 16