(Reprinted from The Centurion, November 26, 2019)
Boston, MA—At a “town hall” meeting during Hearts On Fire University 2019, the brand’s retail partners suggested a diamond-sharing program to help facilitate sell-through of serialized diamonds. This week, Caryl Capeci, CEO of Chow Tai Fook North America, parent company of the Hearts On Fire and Memoire brands, announced that will become a reality. HOF retail partners now can participate in an inventory exchange program, and their diamond inventories will be made available to other partners via the brand’s retailer B2B website, LifeLine.
Caryl Capeci, CEO of Chow Tai Fook North America
For those retailers that report their inventory data through the Buyers’ Intelligence Group (BIG), Hearts On Fire will share both HOF and DRM diamonds for potential exchange via the B2B site. To participate, stores must both be a customer of BIG and send back a signed “opt-in” form to participate. Existing BIG customer stores will not automatically be opted into the program.
Trisha Spillane, spokesperson for Hearts On fire, says this benefits the jeweler because by exchanging and freeing up aged diamond inventory, the HOF team can then recommend new diamonds and/or top-selling jewelry product as part of the exchange, keeping a store’s inventory new, strategic, and updated. Only diamonds with a puprchase date greater than the retailer’s selected aged inventory date will be available on the exchange.
Abe Sherman, CEO of BIG
Abe Sherman, CEO of BIG, said in his company’s newsletter, “One of the most potentially impactful announcements was made by Hearts On Fire last week. If broadly adopted, their newest initiative will be looked upon in the future as a watershed moment in our industry’s evolution. I believe HOF’s new initiative may go a long way to salvaging our industry’s biggest challenges: cash flow, aged inventory, and debt.
Sherman said he’s proud to have his company be part of this program, which will allow inventory to be absorbed by the greater marketplace, a more effective solution than “the stock-balancing dance.”
He went on to say that BIG tracks over $2.5 billion in aggregated annual sales, with aged inventory levels currently at 45%. “When you consider the U.S. jewelry industry is 30 or 40 times the size of our (current) database, we’re talking about tens of billions of dollars of aged inventory industry-wide.”
He points to the automotive industry as an example of how inventory exchange benefits everyone. “Auto manufacturers spend millions of dollars building systems to allow their dealers to trade inventory amongst themselves, giving them the ability to see where every make and model car is in stock, and encouraging dealers to swap cars. They do this to maximize sell-through of their inventory.
“No one in the jewelry industry has ever had the guts to do this, until now.” He expressed hope that HOF’s program will be the start of similar programs for other companies.
“Can’t you imagine that someone across the country needs an item that you’ve had in stock for two years, but instead of making it, your supplier sends you an email to return it to them for credit so they can ship it right out to another jeweler? Everyone wins!” he wrote.