A New Jersey Retailer Goes Deep (Discount)
As the former CEO of both Ebel USA and Maurice Lacroix, Randi Shinske knows how to run a luxury business. So when she hinted to JCK in the spring about plans to open another, the announcement was not a surprise. But the details—a retail store offering tony jewelry and watch brands at prices way below retail—were as shocking as a sale at Van Cleef & Arpels.
Shinske recently opened Red Velvet Luxe in Ridgewood, N.J., a 950-square-foot store featuring names like Raymond Weil and Charles Krypell with tags marked 40 to 70 percent off the original retail price. “We show the original retail from the manufacturer and then our discounted price,” explains Shinske. Not surprisingly, consumer reaction has been “tremendous.”
The idea is equal parts outlet store and online sample sale (think Rue La La, Gilt Groupe, HauteLook). The interior has the look and feel of a chic Madison Avenue boutique—wood floors, antique glass displays, red packaging (including velvet pouches)—plus an airy and light floor plan and displays (cases aren’t jam-packed with inventory like traditional discount stores).
“No one has done this in brick and mortar,” observes Shinske, who’s certain that she’s providing a service and not muddying the already competitive retail waters. Brands, retailers, and even liquidators are supplying her with overstocks and aging product; none is pre-owned, and most have not even been unwrapped. Age of merchandise varies widely from less than one to several years old. The store also caters to a wide range of price points: At press time (her doors had been open just three weeks), Shinske had sold items ranging from a $250 Scott Kay silver ring (retail price: $500) to an 18k gold Harry Winston men’s watch for $6,000 (retail price: $18,000). But just because one brand is in stock today doesn’t guarantee it’ll be in the mix in three months. “I have no deals or set commitments with any brand,” Shinske notes. “The merchandise will be constantly changing.”
Keeping inventory fresh will be Shinske’s greatest challenge, says former Zale chief executive Mary Forte. “If customers are coming in two to three times a week and seeing the same merchandise, they won’t come in again.” Still, Forte thinks the timing is right for Red Velvet Luxe. After all, industry struggles with excess inventory, and many people—particularly men who don’t shop the online sample sales as often as women—still prefer to touch and feel jewelry in person (preferably in a luxurious environment) prior to purchase. “If the merchandise is being sold in an environment that’s up to par with the look of the goods, that’s a help to brands and stores,” she says.
Shinske maintains that former retail customers—some of whom are now clients—have responded warmly (though she wouldn’t disclose names). “My business is very different from theirs,” she says. “My inventory is never going to compete with a retailer who carries a full line. My store has some of this, some of that.?… I should have what retailers are ‘done with.’ It’s a discount store.” Shinske even offers some services, albeit outsourced ones; should consumers need a repair, for instance, she’ll take items to 47th Street on a day when the store is closed.
Next up: getting better acquainted with her customers, building a strong website, and continuing the hunt for deals. (She landed one in her lease, negotiating for “half of what I could have had before” the recession, she says.) A bevy of investors have already approached Shinske about nationwide expansion. Promising—though Forte suggests a wait-and-see approach. “The store is valid test,” she says. “You have to be able to get the merchandise. Rue La La has it all in one location; in stores, you have to spread it out.” Still, Forte, an industry insider with access to just about any type of merchandise, gives Red Velvet Luxe the ultimate endorsement: “I would shop there.”