CHICAGO — Industry experts questioned Graff's judgment in 2004 when the luxury jeweler opened its largest U.S. location on upscale Oak Street here in a four-story, 8,000-square-foot limestone town house. "So many people told us it was a mistake," said Henri Barguirdjian, president and chief executive officer of Graff in America. "They said, 'People in the Midwest don't buy big jewelry.'"
Three years later, Barguirdjian said business has been "phenomenal'' and exceeded sales projections. Shoppers have not shied away from paying seven figures for pieces, although he discovered that Midwesterners prefer higher-quality stones to the bigger-is-better mentality.
Competitors took note. Harry Winston on Nov. 17 plans to open one of its largest locations, a two-floor, 8,000-square-foot store complete with custom lacquer furniture and suede-upholstered walls, a few doors down from Graff. And David Yurman unveiled a 1,400-square-foot space farther west on Oak Street in September.
The retailers join Graff, Judith Ripka, Lester Lampert and Trabert & Hoeffer Jewels to create the Windy City's new luxury jeweler's row. Me&Ro, which sells silver and gold jewelry, next week is to open a 900-square-foot store on the row, next to Jimmy Choo.
"It's clear that Oak Street is becoming what Madison Avenue is in New York: the chicest, most high end avenue in Chicago," said Barguirdjian, who credited Graff, with average sales of $400,000, for setting the trend.
Yurman spent three to four years scouting for sites on Michigan Avenue before opting instead for a storefront on Oak Street, a side street to Michigan Avenue's Magnificent Mile, which houses Hermès and Yves Saint Laurent, among others.
"[Oak Street] has become a very luxurious retail environment," said Nancy Murray, Winston's vice president of investor relations and corporate communications. "We knew it was the right place for us."
Though the wealth in the Midwest is comparable to that on the coasts, the egos are not, jewelers said.
"Most of our customers are discreet, but even more so in Chicago," Barguirdjian said. "It's more conservative. They don't need to flash their wealth. Having said that, when you go to the right restaurants and the right parties, you see people and they enjoy wearing their jewelry, no question about it."David Yurman also has noticed the difference. "They appreciate luxury and they're serious about buying," he said. "But the money is more subdued."
Subdued or not, Yurman wasted no time courting Chicago customers when he opened his store here, which features natural African zebrawood, stone and wood accents. He was the host for an in-store brunch, evening cocktail party and private late-night dinner at the Art Institute of Chicago. Yurman also spoke to the Greater North Michigan Avenue Association and flew back into town this month for a benefit event with Nate Berkus, an interior designer who often appears on Oprah Winfrey's Chicago-based television show.
Me&Ro projected $2 million in first-year sales at its Chicago store. The firm also has stores in New York, Miami and Los Angeles. It has plans to have 15 stores within the next five years.
"We've done very well in Chicago," said Me&Ro chief operating officer Rachel Barnett of the firm's wholesale accounts in the city, including Barneys New York and Neiman Marcus.
The Chicago store will have many limited edition styles, including multicolored sapphire pieces and tourmaline drenched styles.
"Oak Street has become a mecca for luxury jewelry," Barnett said.
All of the jewelers touting the importance of the Chicago customer plan to extend their reach elsewhere in the coming months.
Yurman is expanding his brand to include eyewear and fragrance, and is opening a store in Moscow in December, as well as shops in Hong Kong, Macau and Dubai in 2008.
Harry Winston, meanwhile, plans to unveil a location in Nagoya, Japan, just days after its Chicago launch, making seven domestic locations and 18 worldwide.
Graff is set to launch a store in the Peninsula Hong Kong in December, a unit on Geneva's Rue du Rhone early next year, and a new Manhattan flagship is set for 2008.
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