THE HARRY WINSTON STRATEGY: POLISH IMAGE, EXPAND APPEAL
Byline: Wendy Hessen
NEW YORK — Anyone who has ever braved the iron gate at Harry Winston knows that it’s always been about one thing — diamonds, and the bigger the better.
“With Harry Winston, you’re always aware of the stones,” said Patricia Ham-
brecht, the company’s new president.
Hambrecht said that while the brilliance of Winston’s diamond-laden look isn’t likely to change anytime soon, she would like people to feel more comfortable about coming through those iconic gates because there’s a new attitude in the store.
“There is a sea change going on here internally,” said Hambrecht, in her first interview since assuming the title in December. “There is a lot more communication now. Our staff is being asked to be much more responsive and responsible. Growth is about harnessing what is special about Harry Winston and taking it forward. That cannot be understated or underestimated.”
Hambrecht, a New Orleans-born, Harvard-educated attorney with a penchant for wearing Christian Lacroix, may seem an unlikely choice for the task of moving Harry Winston into the 21st century. Though appropriately decked out in a pile of Winston jewelry, she also has a self-proclaimed predilection for wearing antique adornments, something she honed through her parents’ antiques and jewelry business and 11 years as a lawyer at Christie’s. The last four of those years were spent as president of the auction house’s North and South American divisions.
Her strength, she said, is in being a strategic thinker, which sparked her involvement with Winston in the first place. Although Hambrecht officially assumed her title in December, she had already put in four months at Winston as a consultant charged with developing a long-term business plan for the company, along with founder Harry Winston’s son, Ronald, and Fenway Partners.
As reported, control of the high-end jeweler was finally resolved after years of management turmoil in December when Fenway, a private equity investment firm, completed its acquisition of all outstanding shares of the firm for $54.1 million.
While the Fenway deal left Ronald Winston with a major equity stake in the company and the title of chairman, it is no secret that he has never had the same passion for running the business that his father had, preferring to live a good deal of the time in Japan and focus on his interests in science and engineering. But now, with a major financial partner, it was not surprising that Fenway would use its leverage to insist that someone take over those details.
“Our skills are complementary,” said Hambrecht, who seems to be on a constant whirlwind traveling from one Winston store to the next. “Ronald Winston is a fantastic international ambassador, he is the creative soul of Harry Winston. He has brilliant ideas that he prefers others to execute.”
Besides the Fifth Avenue landmark, Winston operates stores in Beverly Hills, Paris, Geneva and Tokyo. The company, which ranked 26 in WWD’s recent listing of the top 100 luxury brands, was estimated to have a worldwide volume of roughly $100 million, although industry sources say that figure could be considerable less than that.
The Winston name has never lost its luster since its founding in 1932, but the years of battle for control have hampered the company’s ability to grow during a time when other jewelers were experiencing record increases and unveiling major retail and product expansion plans around the world. It has also provided an opportunity for competitors, like London-based Graff.
Both companies reside in the high-jewelry arena equivalent of couture fashion, where many pieces — regardless of the cost — are made to order or can be adapted along the way to suit a client’s fancy. Like Winston, Graff uses only the highest-quality diamonds: stones with D, E or F color and flawless to VS2 clarity, and is known to be highly competitive in its pricing.
Graff will open a store on Madison Avenue near East 63rd Street this spring — seven blocks from Winston’s Fifth Avenue flagship — and is reported to have had a highly successful appearance at the most recent Palm Beach Antiques show, a burgeoning destination for ultra-luxury shoppers looking for the finest in antiques and jewelry.
By attacking several factors this year, Hambrecht said she is confident that Winston can reestablish its stature for those few high-end customers. Among her key strategies are:
Building inventory for each store, partly by mining the company’s “incredible, yet overlooked” archives.
Expanding its watch offerings.
Incorporating more “affordable” jewelry.
Fostering an increased level of service.
Creating a more consistent corporate identity via an image-driven marketing campaign.
But that doesn’t mean visitors will see counters used to display jewelry in any Harry Winston salon anytime soon, Hambrecht said, and opening price points will continue to be roughly $20,000 for jewelry and $8,000 for watches. Winston, along with Piaget, is among the few firms that bypass lesser materials, using only gold or platinum for their watches.
“We’re not looking for a radical departure from the past, but we do need to make ourselves more approachable,” said Hambrecht. “The archives will provide a foundation for new pieces and we will also be looking to buy back vintage Harry Winston pieces. We used to sell fabulous daytime jewelry, which we don’t anymore, and the watch business is a sleeping jewel.”
As for daytime jewelry, Hambrecht said she could envision still focusing on precious stones, but incorporating more gold with diamonds, pearls and even the occasional unusual accent, such as jade.
“But even basic things like our hoop earrings are different because of the way we set the stones and alter the shape,” she said.
Winston’s staff of jewelers will be bolstered to help produce new jewelry. Hambrecht said the company has room to add 10 more jewelers to its 22-member jewelry-making staff, five of whom she is looking to hire immediately.
The watch business, currently limited to roughly 30 retailers around the country, is well regarded. Some jewelry retailers described the collection as strong, helped by the confidence that the Winston name imparts to a diamond watch and the very competitive pricing. Steve Shonebarger is managing director of the business, which Winston calls the Ultimate Timepiece division.
Increasing inventory is critical to level out the company’s revenue stream, Hambrecht said. “We have capital to invest now. In the past, an inventory plan didn’t really exist. It was all highly haphazard. Historically, we were very dependent on the random sale of a multimillion-dollar piece and we never knew when that sale would occur during the year. But the business must become more predictable.”
Hambrecht held up the Winston unit on Tokyo’s Ginza, which she said has registered the highest margins and is the most profitable of all its stores, as a partial model for the future. Besides selling both a greater variety and a number of watches and rings in a specially designated area, the store also features an enhanced bridal assortment and some of those affordable pieces starting around $7,000.
Although her cream-color office with its overstuffed sofa, delicate writing desk and antique gold mirror is in the process of being spruced up, the main salon one floor below doesn’t exactly reflect the luxury experience customers shopping elsewhere in the neighborhood undergo. The paint has faded, the furniture is chipped and mismatched and the silk wallpaper is stained and patched. Even the flowers are limping. None of these facts are lost on Hambrecht.
The Fifth Avenue flagship will have a two-stage renovation, she said, with some cosmetic renovation this summer, hopefully completed without closing. Hambrecht declined to put a time frame on a more extensive renovation. The Paris unit is adding about 65 square feet for jewelry near its entrance and the Beverly Hills unit is planned to have some minor cosmetic work done, as well.
Besides the brick-and-mortar aesthetics, Hambrecht is in the final stages of settling on an advertising agency and developing a global marketing plan. Historically, Winston has created its own ad campaigns in-house, featuring product-driven images that were different for each country. Hambrecht said the time has come for a broader, more consistent image campaign.
“We want to position Harry Winston as more affordable and approachable, but still as the king of diamonds,” she said, adding that whatever ad campaign is created will be global and “give people another image to refer to [when they think of Harry Winston.] We’re not trendy or commercial, but we can be broader and more accessible.”
If her strategies pay off, five years down the road, Hambrecht said, “I would like to think we will have ventured into related jewelry businesses, be working with a much bigger watch business, have a retail expansion plan in place and have a fragrance.”