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The Direct Approach

Shopping at home is becoming a luxe affair. According to the Direct Selling Association, the direct-sales business is worth some $32 billion a year.

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WWD A issue 07/21/2008

CLUSTERS OF WOMEN GETTING TOGETHER OVER WINE AND CHEESE to coo at the latest Avon lipsticks or Tupperware canisters is still a viable business model. According to the Direct Selling Association, the Washington-based national trade association, the direct-sales business is worth some $32 billion a year. Today, the range of products available for direct sale has grown to include a wide variety of accessories, including jewelry, from costume styles to couture pieces costing $25,000 or more, sold over Champagne in a private Hamptons home.
Jewelry brands that are opting to bypass the traditional model of selling through a store or even online are reporting significant growth in their bottom lines, as more representatives sign on to host events and sales appear to be spiking. “We’ve grown exponentially,” says Elena Kiam, senior vice president of Lia Sophia in New York, a company she coowns with her husband, Tory Kiam. “We went from 1,600 advisers in 2003 to 30,000 today, and will have 40,000 by next year. We’re seeing healthy double-digit growth throughout.” Lia Sophia originally started life 25 years ago under another name, but “the company wasn’t doing much,” says Kiam. So she and her husband took it over, renamed it after their two daughters, and relaunched it, retaining the direct-sales business model. Kiam says she wants to keep the brand accessible to all. Advisers pay $149 for all they need to get started, and can begin selling a collection that starts at $24 for freshwater pearl earrings to a more than $1,000 for the more elaborate pieces. “For me, the company is as much about giving women the opportunity to start their own businesses, and some have made an incredible living,” says Kiam, citing occasional instances of million-dollar sales in a year. “The sky is really the limit.” Selling jewelry this way is exactly the same as with any other type of product. Sales representatives — called anything from style consultants to style advisers — sign up and get everything they need to host an event in a private home, inviting friends to shop while socializing. Like with other types of consumer goods, it works because it’s relaxed and there is a degree of familiarity at play. Still, some industry players wanted to get away from the “Tupperware feel” of it. “The luxury side of direct selling is really intriguing because it puts you right next to the consumer,” says Stacy King, founder and chief executive officer of S. King Collection in St. Louis. “You’re not putting your revenue into overheads. You’re putting it into product.” King, formerly a Neiman Marcus couture buyer and museum exhibit organizer, started her upscale jewelry outfit two years ago with her business partner, Susan Sherman, director of market development for the brand, who used to do public relations for brands such as Tiffany & Co. and Ritz-Carlton. They brought in Al Joyner as chief operating officer. Joyner previously held the same position at Tanner Cos., which is the parent organization of women’s apparel direct seller Doncaster. Their objective: bring a sense of exclusivity and luxury to a format that has otherwise had a reputation for being a little pedestrian. King and Sherman pooled their resources and contacts and began scouring the world for eclectic, hard-to-find jewelry pieces, filling their precisely edited inventory with Simon Alcantara’s bone and exotic wood jewelry and Alexis Bittar’s semiprecious baubles. Pieces come from as far away as Jaipur, India; Turkey, and Rome, and might include a butterfly rose quartz ring from Iradj Moini or Ara’s gold hammered earrings with turquoise drops. Prices range from $150 to $25,000, and King says that sales for spring were about 20 percent ahead of last year. “This whole idea of global chic is very interesting,” says Sherman, who adds that style consultants are located from “Peoria [Ill.] to Pasadena [Calif.].” They are selected according to their roots in the community and their involvement in philanthropic pursuits. There will be S. King parties in 40 markets by the end of this year, including places such as Aspen, Nantucket [Mass.] and Fort Worth. Retail consultants say the direct-sales approach has enough mileage in it to warrant its growth. “Consumers are always looking for better methods to shop,” says Andrew Jassin, managing director and co-founder of the strategic consulting firm Jassin-O’Rourke Group in New York. “It’s not unusual for expensive products to be sold directly to consumers and still maintain integrity.”
“We’re very wedded to this business model,” says Lia Sophia’s Kiam. “Lots of retailers are catching on and
coming to us for our jewelry, but we won’t do it. The minute you do that, you compromise the women who work for you.”

This story first appeared in the July 21, 2008 issue of WWD.  Subscribe Today.

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