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That’s Just Precious

To test a precious jewelry collection’s suitability for the Neiman Marcus customer, Stephen Magner just uses his imagination. <br><br>That is, the company’s vice president and divisional merchandise manager for precious jewelry conjures...

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To test a precious jewelry collection’s suitability for the Neiman Marcus customer, Stephen Magner just uses his imagination.

This story first appeared in the October 15, 2002 issue of WWD.  Subscribe Today.

That is, the company’s vice president and divisional merchandise manager for precious jewelry conjures what would happen if baubles were scattered randomly throughout a department.

“Would a customer be able to gather pieces and put them back together as a collection? Are they that identifiable?” asked Magner, who started with the company as a messenger in the precious jewelry department 33 years ago. “That’s the true test of a designer. It’s a wonderful thing if they are, and that’s what a designer’s claim in jewelry should be.”

Sourcing the right mix of precious jewelry — couture-like, defined in its vision, appealing to both fashion and fine-jewelry customers as well as to the growing number of women who purchase their own jewelry — is Neiman’s mission and mantra.

When it opened its Dallas flagship in 1907, the company only retailed soft accessories, but legend has it that the late Stanley Marcus continuously urged his father, founder Herbert Marcus Sr., to expand into fine jewelry. Wary of the category’s lofty prices, complex, multistone designs and high degree of workmanship, Marcus Sr. is said to have considered the category a particular challenge. It wasn’t until 1948 that jewelry became part of Neiman’s retail mix.

Called the Precious Jewels Salon, Neiman’s fine jewelry department today features about 50 jewelry designers, among them Stephen Webster, Laura Munder, Tamara Comolli, Buccellati and Roberto Coin. Top-selling resources, according to Magner, are Henry Dunay, Elizabeth Locke, Cynthia Bach and Loree Rodkin. The store also carries 30 watch brands, such as Cartier, Franck Muller, Corum and Jaeger-LeCoultre.

The branded designer and watch business accounts for approximately 50 percent of total precious jewelry sales. The rest is unbranded jewelry sourced from more than 650 manufacturers worldwide or manufactured by Neiman’s itself in the company’s downtown Dallas jewelry workshop, which boasts 12 craftsmen.

All NM stores feature precious jewelry salons located on the main floor, often adjacent to the well-trafficked cosmetics departments.

Independent from the Precious Jewels Salon, Neiman’s also has a significant designer jewelry division with resources such as David Yurman, John Hardy and Stephen Dweck, who offer both semi-precious and precious jewelry.

“Our jewelry customer is our Neiman Marcus customer,” said Magner, who declined to disclose annual sales figures and projections for precious jewelry. “They don’t go from jewelry store to jewelry store to look for an item. They expect us to have jewelry to complement the apparel and that’s not always the case with a traditional jewelry store. Our customer is fashion-minded, so we need to offer a much broader selection of fashion merchandise.”

Typically, Neiman’s precious jewelry salons are open and airy and feature wall vitrines and linear cases, though design details and layout mostly correspond to the specifications of each specific store.

“It depends on the architecture of the store, its footprint, the available space, and how we may be able to gain more space,” said Magner, who described the precious jewels areas as a hybrid between an intimate salon and a more pedestrian environment.

“For the most part, they are friendly,” he said. “Many have an island of jewelry in the center and wall vitrines on the side, so that it is conducive for the customer to walk around them, like it would be in an exhibit.”

The fine jewelry division is organized by four classifications: estate jewelry, designer jewelry, diamond jewelry and watches. Precious jewelry retail prices can range from $500 for yellow-gold earrings to $5 million, “most likely for a very important diamond or sapphire,” he said, though he wouldn’t be more specific or disclose details of larger transactions. Magner noted that many of the special pieces are taken on consignment.

According to a Merrill Lynch report, fine and precious jewelry represent approximately $250 million — about 10 percent of total NM sales — and has been growing at mid-double digit comps levels over the past several quarters, well above the company’s expectations.

As for which store has the top-grossing jewelry department, Magner said that while it varies from year to year depending on whether there is a significant, million-dollar transaction, historically, the Dallas flagship leads the pack, as it does now. “We have been here for 95 years, and the Dallas store enjoys generations of customers,” he said.

Magner added that the type of jewelry sold in each store varies only slightly, depending on demand in the region. “We sell more money clips in the Las Vegas store than the rest of the country combined,” he explained. “We sell a higher percentage of cufflinks in Washington, D.C. and Westchester, N.Y., because there are more formal events.”

In recent years, the company has also been homing in on self-purchase consumers, with a regular cycle of trunk shows and personal appearances by designers like Henry Dunay, Elizabeth Locke and Paul Morelli. Magner said there are “hundreds” of such events each year. Neiman’s also heavily advertises its jewelry year-round in The Book, the company’s almost-monthly magalog — in this fall’s issues there are a total of 70 pages featuring jewelry.

Many of the advertised pieces sell for less than $3,000 and thus cater to women who buy jewelry for themselves. Magner pointed to Elizabeth Locke as a key resource for self-purchase consumers — and according to Locke, her business with Neiman’s has been growing 20 to 30 percent annually.

Neiman’s sources its jewelry and stones from vendors worldwide, and buyers travel to key trade shows on the international fine jewelry calendar, including JA in New York, JCK Show in Las Vegas and the Couture Jewellery Collection & Conference in Scottsdale, Ariz.

The company’s designer business also is steered by a strong buyer-vendor rapport; Magner said that most jewelers design pieces exclusive to Neiman’s, which can range from completely new designs to variations on existing collections. Magner and his team of buyers co-ordinate these designs.

“The relationships with vendors tend to be very close,” he said. “When we do things, we collaborate. We have vendors make exclusive items for us….And, if [customers] spend a lot of money, they don’t want to see the item on someone else.”

NM often rewards exclusive pieces with special placements in national advertising campaigns, such as its Christmas Book (see related story on page 46). This holiday season’s offerings include a diamond necklace of 60 carats sculpted into a white-gold collar for $300,000, and a 7-carat pear-shaped diamond pendant for $550,000 crafted by Neiman’s in-house designers. For jeweler Henry Dunay, NM accounts for approximately 58 percent of business. “There is no comparison,” Dunay said. “[The NM customer] has a lot of disposable income, an awareness of beauty and they always search for that special thing. I don’t think there is a single specialty store left which has that type of customer.”

Dunay also cited Neiman’s cutting-edge mix of merchandise and extensive network of selling venues. “It’s their ability to constantly make their merchandise flow…. Either it sells, or they move it to another store,” he said.

NM accounts for 55 percent of Elizabeth Locke’s business. The jewelry designer said that there is a big difference between Neiman’s and other jewelry stores.

“NM has this incredible relationship with the whole jewelry community,” Locke said. “If you walk in there looking for a 30-carat D [color] diamond, they call it in and have a stone ready within a few days. They have such a long history of working with really wealthy people, and finding special pieces for them, that the manufacturers are happy to give them their best pieces to show to their clients. You wouldn’t necessarily find that with other stores.”

Jewelry designer Loree Rodkin credits Neiman Marcus with playing a crucial role in building her career. “They launched me in 22 stores about seven years ago,” she said. “They are really supportive, get the jewelry and give me ads to support it, including a billboard in Los Angeles. Because of Neiman Marcus, the Japanese saw my presence in America and launched me there.”

As for the future of the category, Magner remains optimistic.

“Our business has been blessed with steady increases,” he said. “Certainly last year was a challenge, but we intend to go forward and see nothing but blue skies.

“Jewelry is the last romantic business,” he continued. “When you give a piece of jewelry to somebody, look in their eyes and they usually have a different reaction [than with other gifts]. We sell smiles and dreams.”

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