Palas Jewelers is a full-service jewelry store in Atlanta’s upscale Buckhead neighborhood. The retailer carries a range of diamond and colored stone jewelry in 14k and 18k gold, platinum, and sterling silver. The company offers merchandise ranging in price from $15 to $500,000 and does a substantial custom-design business.
Although the small, three-person store has been open only since July 2006, it already has achieved a high level of success, mainly through Internet marketing, word-of-mouth referrals, and other “viral” marketing strategies. Business is booming for the start-up operation—both in the store and online—with Palas serving some 20 to 50 customers daily. The store has had such an impact in the region that it recently was voted the No. 1 jewelry store in Atlanta by Citysearch.com. Last August Palas reinforced its custom-jewelry niche by launching a private-label fine-jewelry collection featuring one-of-a-kind pieces.
In an exclusive interview with JCK, owner Krista Oguz, a former store manager for the Mayors Jewelers chain, discussed her private-label collection, the challenges of running a start-up jewelry operation, her recipe for marketing success, and how her experience in a chain-store environment groomed her to run her own jewelry business.
Oguz also has owned and operated her own gift store and worked as a buyer for an independent jewelry store in Austin, Texas.
1 Why did you decide to launch a private-label collection?
Custom jewelry has always been our specialty—about 80 percent of our business is custom work, including custom engagement rings. It’s a way to differentiate us and create a “brand name” for our store. We have a very talented designer. People were always coming in and asking us to make them one-of-a-kind pieces. They spend so much money on branded designer merchandise, and we saw an opportunity to give them a custom brand at a much lower price, but at a higher profit margin for us. So we decided to launch our own line of jewelry we design and manufacture right here in the store.
The Palas Jewelers Collection is almost all one-of-a-kind pieces. The designs are based on what our clients like, as well as what we like and things we see that inspire us. We are constantly adding to the collection. We use a lot of unusual color people wouldn’t normally find in a fine-jewelry store. For instance, we use sun stone, black tourmaline, a lot of unusual agate in different colors, different colors of opal, rough diamonds, and rough aquamarine, too—and in different shapes and sizes. A lot of the collection is in sterling silver rather than karat gold, which was a conscious choice. We wanted people to be able to own a unique piece of custom jewelry without breaking their budget. The line retails from $50 to $1,000. We photograph every piece so we can show clients what we have and easily reproduce it.
2 After managing stores for a jewelry chain like Mayors, why did you decide to strike out on your own?
Quality of life was a big issue for me. I wanted to make my own hours, run a small staff, and have a life outside of work. So I drove all over Atlanta looking for a small location in a safe, nice neighborhood where I could be a destination. We found it in Buckhead—ironically, within one mile of my old Mayors store.
3 What were some challenges you faced opening a new store?
There are a lot of hair salons in the area that also sell jewelry and accessories. I had walked the area and looked at the competition but didn’t realize how many people were selling jewelry in my area until I opened. The hardest part was getting people into the store when they didn’t know we existed. It’s also hard to know your budget when you’re new; you’re never sure how much you’ll sell in a month, and you may overbuy or underbuy for the holiday season because sales are so unpredictable. And because of my past experience at the local Mayors store, I thought most of my clients would be Mayors clients, so I bought the same merchandise I carried at Mayors. But that hasn’t been the case. We’ve drawn some Mayors clients, but it’s been mainly new clients who want something different.
4 What type of marketing strategy do you use?
In the beginning, we brought some of our custom pieces into the local hair salons on trays for the people working there to look at. They really liked them, bought some pieces immediately, and started recommending us to their colleagues, clients, and neighbors. We don’t do radio or TV advertising, because we couldn’t justify the expense. We tried newspapers and full-page ads in magazines. But we found out that $5,000 ads weren’t putting people in the store. My husband knows about search engine marketing and owns several Internet stores, so we do a lot of Internet advertising and a lot of sales through our Web site. I have a MySpace page for the store, and we advertise on Yahoo!, Google, Citysearch, and Kudzu. We talk to people about how they found us, and many of them found us through the Internet. People blog about us and have given us great ratings on Citysearch, which has really helped us. We also got a big boost from Lucky magazine. I e-mailed their Web site with a letter to the editor asking her to come into the store to see what we have. They ended up picking a piece from our Web site and posting it in their blog, with a link to our site. Within three weeks of opening, we had people all over the country calling us interested in the piece and thousands of hits to our site. Word-of-mouth referrals and positive online reviews have been very powerful for us. We also do charity events in the store that make people comfortable with us and make them want to come back to buy something.
5 What did you learn working for a jewelry chain that has helped you run your store?
Mayors had an incredible training program, and it helped me tremendously. I haven’t taken a GIA course, but Mayors’ diamond and gemstone training program came right from GIA. I learned from working at Mayors how to handle shoplifting and security issues. Another thing you learn while working in a chain store environment is how to handle customer service issues—as well as how not to treat clients. One thing that has been very different for me is that at Mayors, I had an older, more conservative client base than I have now. Because of our Internet advertising, we have a younger audience than the typical jeweler, and we have tried to cater to that audience with our focus on unique designs at affordable prices. We have a lot of girls in high school who come in, looking for fashion-forward items for themselves or gifts for their friends for graduation and other occasions. Rather than spending $12 for a piece of costume jewelry at Banana Republic or in the department stores, we’d rather have them come to us and buy a piece of real jewelry at a great price that will last. Our goal is to get them early as clients and develop a lifelong relationship with them.