LA’s Jewelry Business Makes for 24-Karat Kin
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FROM LEFT: LA’s jewelry business is a family affair: the Simonians, the Polachecks, and the Halfacres. 18k white-gold locket with diamonds, Kwiat ($26,100). Gearys Beverly Hills, 351 N. Beverly Dr., Beverly Hills, 800-793-6670. Maltesa Fleur diamond locket ($4,205) and diamond-bezel necklace ($3,310), Chad Allison. Tala, 1302 Montana Ave., Santa Monica, 310-319-0407. 18k white-gold garland heart locket on diamond ball, Penny Preville ($5,515). Polacheck’s Jewelers, The Commons at Calabasas, Calabasas, 818-225-0600. Loose diamonds, Swarovski Elements.
Let me tell you a secret: Though they may not admit it, jewelers loved last year's raucous comedy Bridesmaids, even as it mocked their profession. They adored scenes where Kristen Wiig, playing a jaded jewelry-store assistant, douses the sparkle in customers' eyes by oversharing her bleak inner life. They giggled as she deflates a young couple looking for an engagement ring: "Look at you guys, making your decisions together, how sweet... that will go away." Her boss urges her to put on her "love-is-eternal" face, reminding her they are selling lifelong happiness. She pouts, horribly. "No," he winces, "that's two years—four years, tops." The insider's joke is the dreamy "love-is-eternal" face is mandatory in some chain stores, a staff-training cliché for tough times.
"The great thing about our business is that most people are buying for a happy occasion," says Erik Halfacre, prodigy of Newport Beach's Traditional Jewelers. "They are here to buy an anniversary or birthday present or an engagement ring, so most people are in a pretty good mood."
That good mood has led to an overall sales increase of 17 percent industrywide last year, according to the California Jewelers Association, equaling nearly $8 billion for Los Angeles's gem and watch businesses. Chains make up about 60 percent of the state's retail outlets, but one-off purchasers using the Internet—which pushes down the price points—have been devouring their sales. So chain stores are repositioning themselves to feel more "personal," only to find the old family firms standing strong on that ground already.
These family-owned businesses are the low-profile trendsetters whose tastes have been trusted by generations of buyers. They don't sell you TV-promoted geegaws, but cuts and chronographs market-tested by the most intense audience in the world—the family gathered around the kitchen table. In return, clients are rewarded as their blue-chip purchases prove both recession- and inflation-proof. Like going to a bespoke tailor, once a client has gone to a family-owned jeweler, he or she is likely to return. Such enterprises make up about 20 percent of shops in Los Angeles, but, according to insiders, may represent twice that in profit—and rate even higher on customer-satisfaction surveys.
Understandably, many family jewelers share important traits. Most can trace their roots back to the unstable Old World, where wealth had to be permanently portable. Often their American lives started humbly, but exploded once ignited in the rich oxygen of free enterprise. A generation later, knee-high heirs played with priceless gems in the family basement or dismantled watches for fun. These skills were later honed by formal study to gain appreciation for the tiny differences in stones or metals. They learned the psychology of understanding customers' needs and the mysterious art of the deal at their elders' knees. Then, typically in their late teens, they apprenticed with another house. This often coincided with some years of freedom—what the Amish call rumspringa—while they decided whether the family business was really for them. In today's socially mobile, me-centered world, a surprising number go home.
However, there are constitutional weaknesses in family firms, so James Orloff, president of the California Jewelers Association, recommends a clear succession plan. "My father divided the business between me and my sisters, which did not work out. So I set up my own, Orloff Jewelers. I made up with my father, and my sisters are happy in their own businesses, but it took years. I will lay down a succession plan for my kids, to keep both the family and our clients who need the continuity happy."
Similar stresses have given other heirs second thoughts about carrying on the family business. Brent Polacheck, 39, recalls his own rumspringa temptations—baseball for Polacheck was the American dream. He fled the nest to The University of Arizona, where he thought he might play some baseball. "I loved baseball—everything about it." But Polacheck recalls hitting a wall. "I phoned my father and asked whether I could join the family firm," he says. "He said not until I worked for someone else to learn alternative ways of business—skills I could bring back. So I went to Manhattan and worked for a diamond wholesaler, sorting diamonds for a year, and then spent a year and a half at Tourneau, which was amazing." Prior to this, Brent got his gemological certification at the Gemological Institute of America (GIA) in New York, where for months he did nothing but grade stones for clarity. "It could drive some people crazy if they are not suited, but I think it's invaluable training, because so many skills become second nature to you."
Cousins and uncles left Eastern Europe for the American West during the 1920s, and Polacheck's was established in the 1950s. "When [friends] went to the beach on vacation, I was selling $5 charm bracelets at the age of eight and loving the salesmanship," says Polacheck, the fourth generation in the business. "At nine I got ambitious and wanted to move on to the big stuff, but my father made me learn [gift] wrapping for the next few years. He told me if I could not wrap, I couldn't be in this business. I got the lesson that details count."
In 1998 Polacheck and his father, Stephen, opened their first store together in The Commons at Calabasas, where they follow Stephen's "Big Three Rules": Always keep your front door open; always pay your bills on time; and never overextend yourself—no matter how delicious the baubles and timepieces are. "I would love to buy in places like Vegas, but I am always thinking [about] what the customer will pay here," says Polacheck. "And that is the big difference—our customers think about it, consider value, and do not suffer so many hangovers."
Yet risk-taking can pay off, as John Simonian, founder and owner of Westime stores can attest. Simonian, who also co-owns the Rodeo Drive branch of independent watchmaker Richard Mille, recently took a gamble on the latest Mille timepiece, the RM 056 Tourbillon Split Seconds Competition Chronograph, an extraordinary watch housed inside a case made entirely of sapphire. "It is a wonderful thing," he says, exuding joy for the craft. "The three parts of the case are carved out of a single block of sapphire. They can make about three RM 056 sapphire watches a year—it takes 1,400 hours just to machine its case." Not surprisingly, the watch retails at $1.65 million and, as a mark of better times ahead, the company recently sold all five pieces within hours at a Geneva trade show.
Simonian's family came to the US via Lebanon then Switzerland, where his oldest son, Greg, 27, enjoyed his rumspringa. Switzerland proved so much fun that his daughter Jennifer stayed on. At 28, she has only now obeyed the genetic imperative and returned to join the family business. "I love being back home," she says.
Simonian has no intention of retiring—he has too many old friends among the firm's client base who would be upset if he took up golf. "They would phone me up to find out what is going on," he says. He spat into the economic winds, doubling down by opening his shops seven days a week. "I wanted to make sure we could keep all our staff and always be there for the customer."
Simonian has turned over the day-to-day running of all the retail stores to Greg. "I have learned what our customers want is trust. They are trusting us to sell them, for a great deal of money, something so small it can be carried on their wrist," says Greg, who says his first timepiece was a Timex Ironman. "I still have it somewhere. Like many of our customers, one watch is never enough." Now Greg is developing a new Westime store on Sunset Boulevard—a combination watch and jewelry store that also sells high-end personal accessories.
Simonian, who knows how to surf the business waves, imparts his wisdom to his children. He made his first fortune selling Swatches during the 1980s, when fans would camp out all night awaiting the new consignment. "That was so much fun; there were kids on the doorstep at midnight—we gave them coffee," he recalls. He is always looking for the next big thing. A straw poll suggests that might include sliced diamonds, the return of the two-tone stainless steel and gold watch fashionable in the 1990s, and watches made of 22k rose gold—and, harking back to the 1940s, exotic metals such as titanium. Even the sizes of watch faces are in play: Will they get smaller, as the well-heeled Chinese tourists favor, or ever more expansive, as driven by the Russians?
PHOTOGRAPHY BY CHRIS STEIN
Cover shoot: September 2014 issue of Los Angeles Confidential magazine.