Wednesday, November 24, 2010
Celebrating its Ruby anniversary, Stuller diversifies to weather the downturn and rising price of gold. By Erin Z. Bass
Rubies, at least in terms of what they represent in years, are all the rage at Stuller Inc. this year.
The iconic Lafayette-based jewelry manufacturer, which turned 40 in November, got its start when Matt Stuller decided to sell jewelry parts from the back of his car. The company's chief executive officer, Matt has grown his business into a $325 million, 600,000-square-foot operation that services independent retail jewelers around the world.
Wednesday, November 24, 2010
Celebrating its Ruby anniversary, Stuller diversifies to weather the downturn and rising price of gold. By Erin Z. Bass
Rubies, at least in terms of what they represent in years, are all the rage at Stuller Inc. this year.
The iconic Lafayette-based jewelry manufacturer, which turned 40 in November, got its start when Matt Stuller decided to sell jewelry parts from the back of his car. The company's chief executive officer, Matt has grown his business into a $325 million, 600,000-square-foot operation that services independent retail jewelers around the world.
Stuller Inc. has been quick to adapt and change with the needs of its customers, a practice that has served it particularly well in the past several years.
"We realize that our customers today really want to look at their vendors more as a partner," he says. "We don't want to own any part of them, but we want to become more valuable to them by being able to assist them in new ways of engaging with their customers, new marketing tools and new design tools."
After seeing its customers struggle due to the high price of gold - currently more than $1,400 an ounce - Stuller Inc. decided it was time to diversify and in March purchased the supplies and assets of Los Angeles company GMA Inc., known for its expertise in alternative metals. Stuller then followed up with its own line of contemporary metal jewelry made of stainless steel, titanium and dura tungsten (a metal known for its hardness) this fall. These metals are significantly less expensive than gold, which is expected to continue to rise in price amid continued concern over the economy and increased demand for investment purposes.
"Obviously this product is being designed to be a bit lighter, and there's been tremendous efforts in creating new types of alloys and certainly alternative metals which we have coined contemporary metals,'" explains Matt. "There has been a move in the marketplace to have a less-expensive metal in order to have affordable jewelry. We feel that we need to be in that business because the jeweler is carrying that product."
Chief Operating Officer Jay Jackson says that Stuller Inc. doesn't expect to replace the diamond engagement ring or stud earring with these new metals, but at the same time the company doesn't want to lose touch with a younger generation of jewelry buyers who are looking for pieces that are more affordable, fun and interchangeable. "I can't afford maybe another pair of diamonds," he says, "but I can buy six or eight pair in the contemporary metals, and it almost becomes a fashion item."
Adds Matt, "I really think that the contemporary metals is just a nice addition to a broader selection of product when gold is extremely high. I believe it's here to stay, and it will benefit the consumer that they have a broader collection of different product that they can pick from."
With the cost of gold so high, consumers may not be interested in buying that necklace or ring from the jewelry store, but they can fetch a fair price for gold they already own. Launched about two years ago, Stuller's Clean Scrap Return Program allows jewelers to send in karat gold and silver they have in stock or have received in exchange for credit on their account or a check, with a turnaround time of only three days. Stuller says the program has helped customers with their cash flow and provided them with a way to recycle old inventory. According to a chart on the Stuller website, jewelers can receive up to 98 percent of the value of their gold through the program.
Not immune to the recession itself, Stuller laid off 45 employees and restructured its management team in 2008. At the time, Matt Stuller himself returned to handle day-to-day operations. Today, he says the company has weathered the storm and is ready to return to its growth track. "It was one of the most difficult, emotional times for not only me, but for our management team, but it was certainly the right thing to do," he says. "Since then, we hired back many of the ones we did lay off, and we have been on a consistent hiring [pattern] since then."
The CEO is positioning his company for a future where customers want to create their own jewelry using the latest technology, like the company's iPhone application, and where jewelry is no longer just silver or gold, making it a lot more affordable to a wide range of consumers.
"Stuller has huge potential in growing and being a cornerstone for the industry as well as representing our community to the world in being the greatest of technology companies for the jewelry industry," says Matt. "We're very bullish. If we were a public company, I think I would highly recommend people buying lots of stock in us."
The Price of Gold
According to the World Gold Council, gold prices have seen a steady and measured rise for the past nine years reaching a price of $1,401.40 on Nov. 10. The price of gold is driven by supply and demand factors, including mine production, central bank activity, investment, technological and industrial uses and demand for jewelry, and is "set" twice a day in London in terms of U.S. dollars per fine troy ounce (equal to 31.1 grams).
Economic uncertainty has caused increased demand for gold as an investment and as a way to preserve wealth. While now may appear to be a good time to sell gold for quick cash, the market remains strong so consumers may want to hold onto their gold jewelry a bit longer and consider it as a way to accumulate wealth over time. For those who do wish to sell their unwanted pieces, a few things to know in advance are the current price of gold, the karats their jewelry has and the weight of the gold portion of the piece.
Many online sites are available to check the price of gold, and some provide online tools to calculate the worth of recycled gold by plugging in the karat and weight. Always get multiple bids for your jewelry before selling and make sure you select a reputable company to do business with. For more information about the gold market, visit the World Gold Council's website at www.gold.org.