How Indie Jewelers Are Keeping Pace in a Changing Market

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Twenty-five years have passed since Vito Klahejian opened Arka Designs, a fine-jewelry store, in Downtown Los Angeles. That year, 1992, race riots broke out in the city, carjackings made national headlines, and downtown stood out for the sheer number of homeless people living in tents and squalor on Skid Row. The area lacked the lofts, condos, music venues, and restaurants that have made it a draw for the public today.

“It’s changed,” Klahejian says. “Now everybody wants to be in Downtown, and before nobody wanted to be in Downtown.”

During the late 1960s jewelers flocked to the neighborhood, opening up shop in buildings that date back to the Jazz Age. But once the 1990s hit, Klahejian says jewelers would conduct their business for the day and leave at sundown. That’s changed. Today the fourth-generation jeweler from Lebanon will call his wife and suggest she meet him for dinner downtown.

Redevelopment of DTLA, as locals refer to the neighborhood, has been bittersweet for the decades-old jewelry establishments there. The jewelry district stretches from Fifth Street to Eighth Street on Broadway, Olive, and Hill streets, according to the University of Southern California. It constitutes one of the nation’s largest, with more than 1,000 jewelry retailers, manufacturers, and wholesalers. While the neighborhood sees more foot traffic, urban renewal has led landlords to force out jewelers, turning the properties where they conducted business into pricey lofts.

The Downtown Center Business Improvement District found that from 1999 to 2015, the number of DTLA residential units jumped from 11,626 to 35,449. Property values rose by 223.6 percent during roughly the same period. As residents and investors pour into the neighborhood, some jewelry retailers find themselves edged out. The Los Angeles County Economic Development Corporation told Racked that the amount of jewelry retailers in the county, most of which are concentrated downtown, dropped from 1,034 in 2004 to 880 in 2014. Across the country, 1,669 jewelry businesses closed last year, a 50 percent jump from 2015, according to the Jewelers Board of Trade.

Yet some longtime jewelry establishments in Los Angeles are weathering a market downturn and rapid redevelopment downtown. They’re offering locally made jewelry, unique services, and perks for customers, and are using research to better understand shoppers.

For Klahejian, predicting market trends has been one key to success. He started selling jewelry online in 1996, a move that led to ridicule from other jewelers at the time, he says.

“Who the hell is going to buy diamonds online?” they asked him. Blue Nile, the largest online diamond retailer, launched three years later. Arka offered jewelry on the internet until 2014 but stopped because Klahejian says there was too much competition. It maintains a website with inventory clients can request to see in person.

Although millennials have been blamed for the drop in jewelry sales — experts say they’d rather spend money on travel and technology than on jewelry — Klahejian’s customers represent all age groups. One of his last patrons was a 24-year-old who bought an engagement ring. Weddings remain the top reason people visit jewelry stores, but Klahejian says anniversary bands, tennis bracelets, and pendants are also popular items at Arka. The business has amassed dozens of positive reviews on Yelp, Google, and Facebook, and that attracts new clientele, especially millennials.

“Younger people are doing their research,” Klahejian says. “They’re buying higher-quality diamonds. Some prefer pearls or sapphires or lab-created diamonds.”

Although Arka doesn’t sell lab diamonds, the retailer does design rings for them if customers request it. The precious gems at Arka are handcrafted in Los Angeles, which means artisans, not machines, shape the pieces by hand. This is a selling point for patrons who want to buy locally and prefer their jewelry to have character. It also doesn’t hurt that the business is located in the Millennium Biltmore Hotel. A playground for Hollywood’s Golden Age stars like Gloria Swanson, Jack Warner, and Cecil B. DeMille after it opened in 1923, the hotel is a now tourist attraction. The Biltmore has appeared in several films and TV shows, including Cruel Intentions, Glee, and Ghostbusters.

To make it convenient for customers to get to traffic-ridden downtown, Arka offers valet parking. Because there are restaurants and a shopping plaza nearby, Klahejian says he also routinely attracts walk-ins. The impression left on customers after they walk into a jewelry store is critical, according to Peter Smith, a columnist for National Jeweler and president of Vibhor Gems in New York City. Last year, Smith wrote a two-part series on the future of jewelry retail in which he warned that cluttered display cases, poor lighting, and ineffective salespeople do businesses no favors.

His advice for jewelers is to “take out half the shit that’s in your store, and invite negative space,” he told Racked. “Literally less is more.”

He says that customers often visit jewelry stores when emotions are running high, so inundating them with lots of generic products may make them feel more overwhelmed and less likely to make a purchase. He also cautions jewelers not to keep patrons in stores for longer than necessary.

“Jewelry stores have long held this ridiculous notion that the longer customers spend in the store, the more they’ll spend,” he says. “That might have been true 100 years ago, or even 10 years ago, but today when we go shopping, we want to get in and get out.”

Sales staff need not only to empathize with the busy customers of the 21st century but also to make the shopping experience seamless for them, Smith says. They can do so by integrating their websites with their brick-and-mortar locations. The customer should receive a consistent message whether they visit the retailer online, encounter an ad from the store, or visit in person, according to Smith.

As a wholesaler, Tacori Enterprises Inc. has a vested interest in helping its network of about 400 North American retailers connect with customers. Jeweler Haig Tacorian started Tacori after immigrating to the United States in 1969 from Romania. (Like Klahejian, he’s ethnically Armenian.) He set up shop downtown, eventually moving a few miles away to a warehouse in Glendale. There, every step of the manufacturing process takes place. Tacori continues to have a connection to Downtown, as retail partner Icing on the Ring remains in the jewelry district.

Known for its round but elongated diamond cut, featured on ABC’s The Bachelor, Tacori has striven to help its retailers better empathize with customers. The company consulted a neuroscientist for tips, says Michelle Adorjan, senior vice president of marketing and public relations.

“We touch people’s lives and people’s legacies,” she says. “Nobody has more of an emotional connection [to a purchase] than to an engagement ring and wedding band. They are part of family stories, and there’s something about that sentiment that a beautiful Chanel handbag doesn’t occupy.”

She says the fact that people hold on to precious gems and metals for a lifetime and then pass them down to the next generation makes jewelry stand out from other goods. Tacori’s retailers keep this in mind as well as the issues that matter to customers. Adorjan says that more than ever, clients want to know about the origins of the precious gems for sale.

Thanks to exposes like 2006’s Blood Diamond, more consumers are demanding ethically sourced gems without ties to unfair labor practices, war crimes, or environmental abuses. Increasingly, customers are willing to purchase engagement rings and wedding bands online. Tacori doesn’t sell such rings digitally — although it does offer fashion jewelry on its website — but it is exploring the possibility of using artificial intelligence and holograms to sell fine jewelry online in the future. Adorjan says one day customers could turn to a smart virtual assistant with AI to guide them through the process of buying an engagement ring. In the near future, they might also be able to receive CGI holograms of their rings that they could try on virtually. Generation Z is likely to reap the benefits of such technology. But for now, Tacori is appealing to millennials with the understanding that they’re more inclined to travel than to make luxury purchases. The wholesaler offers a program called Tacori Journeys that gives customers deals on hotels and travel.

The company’s downtown retail partner, Icing on the Ring, sells almost exclusively to millennials, according to senior consultant Vic Rupchian. When the business opened in the California Jewelry Mart in 1969, it was known as the European Jewelry Co. and sold a wide range of goods. In the 21st century, it has revamped itself with a catchy name and by narrowing its inventory. Icing on the Ring only sells bridal rings, wedding bands, and loose diamonds. Accordingly, Rupchian says the business rarely gets customers over age 35.

His company sells natural diamonds, laboratory-created diamonds, and manmade diamonds called moissanites. Millennials have upended the industry because their concerns about the environment and overspending mean they often prefer not to purchase a costly natural diamond, Rupchian says. But those who are more traditional can find the same types of bridal rings that wowed their parents.

Rupchian says it’s not easy to explain why Icing on the Ring is still around while competitors have closed their doors.

“I think it has to do with our basic infrastructure and operation, carrying the right product mix,” he says. “A lot of it has to do with marketing and advertising, having a digital presence.”

He says many Downtown retailers are small-scale operations that have struggled as the neighborhood and industry trends have changed. Diana Singer, president of the American Society of Jewelry Historians, agrees.

“These new times came upon us very quickly, so it was perhaps too challenging for an older generation that had been functioning the same way to absorb this new economy,” she says. “I think the companies that seem to be successful have a story that’s attached to the product that resonates with the buyers. That’s a very important part of the equation.”

While the industry is hurting, Singer believes demand for jewelry will never disappear because humans have adorned themselves with beautiful trinkets for millennia, be they the simplest beads or the most magnificent gemstones.

“It’s all the same principle,” she says. “It’s the human desire to wear something beautiful. It’s a really relevant theme that changes over centuries and decades. What we are finding with millennials is they’re buying less but they’re buying better, and they’re also repurposing older things. You could take a crescent pin from the late 1800s, and some people might find it undesirable, but millennials are looking at this with a fresh eye. They’ll say, ‘I don’t want to wear this as a pin. I want to wear it as a ring. I want to wear it as a pendant.’”

She says the LA jewelry retailers that closed in recent years struggled to understand how the market and the consumers alike have changed. They either chose not to adapt or were unable to make the transition.

Sam Boktor, who opened his business Sam’s Jewelry & Watch Repairs downtown in 2002, says he’s remained relevant by listening to what customers want, even if it’s untraditional. He’s earned a reputation for providing custom-made jewelry and restoring pieces other jewelers have dismissed as beyond repair. His clients have included singers like Ricky Martin and Jason Mraz, for whom he’s made custom bracelets and a wallet chain, respectively.

In his 15 years downtown, he’s seen the impact of urban renewal on the jewelry district.

“It’s good and bad,” he says. “It has become more residential. Rents are too high, and it actually is shrinking the jewelry district. People are turning their buildings into lofts, taking the space from jewelers and giving it to residential people. I’ve seen three or four buildings that used to be jewelry manufacturing become lofts.”

In the first quarter of 2017 alone, 550 new residential units broke ground, and 3,802 new residential units were proposed.

Real estate consultant Tyler Harman says foreign investors are fostering redevelopment downtown by seizing aging buildings. Landlords are willing to sell because “they’ve been trying to squeeze more money into the properties they’ve owned for decades, and now they’re worth something,” he says.

Corporations don’t necessarily care about the effect their practices are having on local industries. “A lot of times, they’re looking out for themselves,” Harman says.

Rupchian thinks Downtown’s revitalization will likely benefit his business because it’s bringing more people to the neighborhood. While Boktor did not go that far, he doesn’t believe the trend will necessarily hurt his company. During his 30 years in the business — he learned the craft of jewelry making from his father as a child in Egypt — he’s grown used to market shifts. For years, however, he’s relied on a steady stream of customers to sustain his company and believes the relationships he’s built will keep it going.

“I have my own customers,” he says. “They come from family members and friends referred by friends. They come from the internet. I give very good customer service, and I love what I’m doing. I’ve had to earn their trust.”