Jewelry Blog

It’s truly sad when you read stories like the following, but, unfortunately it’s a cruel fact of life. I’ll link the story first…

Couple May lose Ring

Having been in the same position as the jeweler in the past, I do understand the situation. Holding jewelry “hostage” so that you can pay your bills, feed your family. Very sad, but reality. No, it is certainly not the couple’s fault nor (I hope) should they have to “pay” for the financial problems/indiscretions of others involved but unfortunately they are involved.

I’ve been in that position before as a jeweler and business owner. The position of contracted client not paying their bills/invoices and as a last resort you’re left to hold what you have “hostage” in an effort to try and recoup part of what you’ve already invested. Sad, but true.

Whitehall has NEVER been timely about paying their contracted jewelers. I reiterate NEVER… at least for 20 years. They paid on their time “schedule”. Anyone from the company, anyone that’s left, even those prior, that wants to even try and refute my assertion, I have 20+ years of records that will demonstrate and prove you didn’t. My apologies for going off on a rant but this is a really sore subject for me.

What I hope will happen in regards to the story I linked above (legalities not included) is that jeweler at least try and reach out to the couple. Give them the opportunity to retrieve their memories from you. And, I will say the same to each and every other contracted jeweler in the same position. Take the opportunity (notwithstanding legal issues) to reach out and try to not only provide for your family, but to try and restore the symbolism and memories of those people who entrust the very things that signify that every day.

Dave 

08-12-08 Gold Hits 8 Month Low

Reuters is reporting that the recent plunge in the price of gold is likely due to the strength in the US dollar which is still near a 6 month high causing investors to “jump ship”.

Note that wording… “investors jump ship”. This is what has annoyed me for so long. Investors speculation driving the price through the roof rather than the demand for the metal itself. Exchange traded funds adding to this mania harming more than are helped.  Add to that oil hitting its lowest level since May and as suggested, I agree that sentiment has turned negative.

I say negative investor sentiment in both gold and oil is a very good thing for all the folks who actually use it. 

The hope that Whitehall Jewelers would be purchased by Gitanjali Gems LTD and continue core operations has come to an end with Gitanjali. I expect an official announcement to be made today with the high bidder at the recent auction, Gordon Brothers, assuming control of the bankrupt jeweler and liquidating the company.

David Yurman returns to the supermodel spokesperson with the return of Kate Moss. The new ad campaign, featuring Kate, Daria Werbowy, Amber Valleta, Natalia Vodianova and Naomi Watts, is shot in a stark black and white by Peter Lindbergh.

The clean photos and stunning women are a perfect compliment to Yurman’s bold jewelry designs of two tones and large gemstones.

David Yurman isn’t the only place you’ll be seeing Kate though. She has also signed with Italian designer Roberto Cavalli to star in his signature line jewelryadvertisements.

The Consumer Product Safety Commission announced a voluntary recall of the “It’s a Girl Thing” line of bracelets, necklaces, and phone charms distributed by Bead Bazaar USA.

13,000 pieces of jewelry have been recalled due to high levels of lead found in the jewelry although no injuries have been reported to date. The jewelry was sold from February 2006 through June 2008 for about $6 each.

Consumers are advised to take the jewelry from children immediately and return it to the store it was purchased at for a full refund. You can also contact Bead Bazaar USA at 800-838-1769 or visit their website at http://www.beadkit.com for more information.

Whitehall gets interim funding.

Whitehall jewelers received approval from the bankruptcy court in Delware for interim funding of $22M of the $80M of debtor-in-possession financing on June 24th 2008. A court date of July 18th 2008 has been set for the final hearing. Read More…

Commentary: Whitehall purchase in the cards?

For the very short term, Chicago based Whitehall Jewelers will be able to continue operations. The question now is what’s next?

Back in 2005 Whitehall Jewelers was “saved” by a significant investment by Prentice Capital; a New York based hedge fund after an accounting scandal crippled the company. An opportunity to right a failing ship and reestablish its niche in the market. An opportunity that initially seemed to be taking shape when Robert Baumgardner was brought on board as the new CEO November 2005.

Unfortunately, Mr. Baumgardner’s vision was short lived as he was replaced by Ed Dayoob in September 2006.  Mr. Dayoob was brought on board to put an experienced team in place to position the company for success going forward. He did bring an experienced team on board and also positioned the company directly into the teeth of some of the stiffest competition and target a market, albeit arguably the largest, that would be most affected by tough economic times.

Will Whitehall be purchased or scuttled to salvage what can be had? I’d like to see them purchased and believe that it’s not a farfetched idea. They have a new distribution center with a high capacity vault and secure elevator system able to handle a large number of stores, many good retail locations, and provide an opportunity for someone to further their market presence or establish one. Perhaps this is a good opportunity for a jewelry company rather than company looking to “make a buck” to take control.

Whitehall needs to stand out as someplace different that is able to provide something unique and different if it’s given another chance to succeed. It needs to carve and establish its own niche in the marketplace and not try and “do what they did”. Many will say not to argue with success but success in the past is not indicative of success in the future. Times change and being “one of the crowd” can often leave you as an “also ran” instead of a leader. 

UPDATE 07-02-2008…

The following comment was made on JCK blog…

July 1, 2008

In response to:Who Will Buy … Whitehall’s?
nooneimportant commented:

All the USA companies are out of the running to acquire Whithall, most likely. I would be looking overseas for the potential buyers — remember Samuels and Rogers? India is making inroads by taking advantage of situations like this.

 The company that bought Samuels in December of 2006 and Rogers in November of 2007 is Gitanjali Group Ltd in India. Executive Director, G.K. Nair has commented that…

“What we are trying to make in America is a 300-400 size chain…so that it becomes a very economical model to work on,” said Nair, adding the company would be on the lookout for more acquisitions in the U.S.

Gitanjali, according to a JCK online article…

Its goal is 175 stores by the first half of next year and 400 stores by 2009. To that end, it plans two major retail acquisitions in the next 18 months, says Nehal Modi, CEO of Gitanjali USA.

While Samuels and Rogers will function as stand-alone brands, Modi says management headquarters will be merged by the end of next year. “We don’t know yet which one will take over … until we can assess the management and business practices [of each].”

Will a pared down Whitehall be purchased by the Gitanjali Group? Based upon what I’m reading it seems to make sense.

UPDATE 2: 07-04-2008

It is being reported that the Gitanjali Group does indeed have plans in the works to buy out Whitehall Jewelers, reportedly for between $81M-$92.5M. Read more… 

I really can’t say this is unexpected. On Monday June 23rd 2008, Whitehall Jewelers filed for Chapter 11 bankruptcy protection. A hearing is scheduled for today where they seek approval for their plans which includes $80M in  debtor-in-possession financing so that they continue day-to-day operations.

Being unable to turn around the stuggling company which has posted losses in each of the last 3 years, Whitehall was left with little else than to file for bankruptcy protection in an reorganization attempt. Back in 1992 Zales Jewelers filed Chapter 11 bankruptcy emerging a year later after having restructured its debt. It remains to be seen whether or not Whitehall is able to do the same.

It’s easy to blame the tough current economic conditions, almost fashionable, but since 2005 Whitehall has been unable to position itself properly in order to prevent this from happening.

More from the Chicago Tribune 

David Goldstein, investigative reporter from CBS2.com, has been writing about DSN and presenting allegations of improprieties.

A former host stated, “I was instructed to lie.”, “I was instructed to fake phone calls.” Even fake auction bids. DSN has claimed that these reports are from a disgruntled former employee, but Mr. Goldstein claims otherwise.

Add these reports to the recent firings at JTV, and reports coming from independent gemologists that some Labrodite being sold as natural was actually treated, and we could be seeing a long series of investigations and charges being leveled at an industry that may not bear up against much scrutiny.

http://cbs2.com/goldstein/Direct.Shopping.Network.2.725487.html

http://cbs2.com/goldstein/Direct.Shopping.Network.2.730018.html