Last updateTue, 16 Jul 2019 9pm

Bob Epstein

A down economy is the optimum time to position for a rebound

Every day someone asks me whether we are starting to climb out of the sluggish economy or if it will continue for an extended period of time. Realistically, history has shown that even when the economy experiences an uptick after a recession, the jewelry industry experiences a much more gradual turnaround. The average growth rate during the first year of recovery averages only 0.3 percent for jewelers. Boom times that we all experienced in the past are unlikely to return any time soon, but that doesn’t mean it’s time to shutter the operation. In fact, we’re advising jewelers to embrace and adapt to this new reality now and to move quickly to minimize performance deterioration.

Make the best of a slowdown

Economic downturns are particularly tough on retailers; however these are the times that a retailer needs to move quickly to make changes and adjustments to minimize the impact of the economic downturn on their business. There are many options the retailer has from cutting costs, shutting stores, to refreshing their inventory and reviewing their promotional and advertising activities.

A good place to start is to examine your financial position and to determine whether or not you are going to approach the downturn offensively or defensively.

If you decide that you are in a more defensive position and need to make reductions in your operating costs, you need to see where you can eliminate waste. Is your payroll inflated? Have you been putting off making reductions to your work force? Now is the time to make those tough decisions.

Do you have certain costs that you incur on a monthly basis that can be outsourced such as accounting and advertising costs? Is there any chance of renegotiating certain contract costs such as leases or software costs? Do you have shop costs that can be done on a by piece cost instead of guaranteed salary?

You also need to review other areas that can help reduce your operating costs. Do you have clearance goods or obsolete goods sitting in the showcases that you can sell off to help reduce bank lines and reduce interest expenses? Do you have under performing store locations that by closing you can concentrate on improving ongoing strong performers? You can also utilize the under performing store that you close as an opportunity to sell off some of your dated, slow moving inventory.

A slowdown is also an opportune time to retrain your staff and to insure that they are using the best possible selling techniques. Is your mailing list up to date? Do your employees track your best customers anniversaries and birthdays? Make sure your mailing list is current and contains as much information as possible.

Is your store set up to make your customers shopping experience as comfortable as possible? Can you make some simple changes to make your store more customer friendly? Are there local organizations and clubs in your area that you have put off joining because you just haven’t had enough time? These organizations are great for networking opportunities and can lead to future business opportunities.

If you can be in a more offensive position because your cash position is strong then there are several options available to you as well. This is a good time to increase some of your investments to gain an advantage on the competition. Refresh the look of your store with some remodeling. If you have been looking to expand there will be some excellent potential acquisitions available.

It is also a good time to re-evaluate your current staff. Your competitors that are struggling may have some strong sales talent that you may be able to recruit to your team. Review your inventory and improve the availability of your fast selling SKU’s and feature poorer selling SKU’s at deeper discounts. Experiment with different local markets such as local cable stations or radio.

The least effective thing you can do during a slowdown is nothing. Whether your cash position is weak or strong there are actions you can take to help improve your business when economic times shift. Moving quickly to improve performance can help to reduce the odds of a deep dip in sales revenues and put you in a stronger position when the inevitable upturn occurs.

Bob Epstein is CEO of Silverman Jewelers Consultants. Since 1945, Silverman has been considered one of the premier sales consulting firms to the jewelry industry, specializing in improving cash flow and maximizing the recovery on distressed inventory through professionally conducted sale events. Bob can be reached at 800-347-1500 or by e-mail at This email address is being protected from spambots. You need JavaScript enabled to view it..

Happy employees equal happy customers

No matter how well you watch cash flow, manage inventory, or make your store attractive to customers, you will lose business if you don't work to develop your employees.

Develop your employees and keep them engaged in your business plan and they will work harder to keep your customers happy. In a high-service industry such as the jewelry industry, contact between the salesperson and the customer can make or break the bond between your business and your customers. Many jewelry store owners, however, fail to recognize how important that connection is.