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As The Market Moves Down, Montelongo’s Moves Up | March 16, 2016 (0 comments)
College Station, TX—Few jewelers looking at a lackluster sales market would think that’s the perfect time to revamp their business and go really high-end. While that’s far from the norm, that’s exactly what jeweler Jesse Montelongo of Montelongo’s Fine Jewelry, College Station, Texas, did in 2008 when the economy dipped.
Montelongo’s Fine Jewlery is a 25 year-old business in a college town. The stand-alone store traditionally catered to students and the bulk of sales came from the bridal category.
“When the economy started slowing, many jewelers felt lower price points would be good. At that time, I made a conscious decision to go completely opposite that. We went high-end. The theory was the people with money will always have money. We began to cultivate clients in that part of the market, not through marketing, but through personal relationships. I joined an exclusive country club, built relationships and started selling bigger items,” said Montelongo.
Part of the relationship building took place on the golf course. “I played collegiate golf and that skill worked well in the country club setting. We also focused on client acquisition. Our marketing became more about finding and meeting clients and developing relationships and less about billboards, etc.” His golf skills are still sharp. Montelongo was a winner at the recent Centurion 2016 Annual Golf Tournament.
Clearly, when making a major change to a business, many factors are involved. The Centurion asked Montelongo what changed as a result of an emphasis on the higher-end part of the market.
One was personnel. “I found a young lady that had lived in that world,” said Montelongo. The young lady was Toni Martinez. Martinez had lost her husband a few years before and was a customer. She connected with Montelongo and began working for them. “She had lived in that arena; one where you had a Ferrari and an airplane. She knew it wasn’t uncommon to see someone spend a million or a half a million. She’s really what got that part of the business going. Hiring her was a conscious decision so it wasn’t just me selling, but having someone else who could sell those items.”
Her support was invaluable to Montelongo. “She gave me her opinions about how to reach that part of the market and the optimism to think it would work.”
Montelongo's interior
Another was new customer relationships. Montelongo has found building relationships to be a rewarding and fun activity. “We go and do things, I’m invited to see weekend homes, to go to Vegas, to go play golf. I have fun with my clients.”
And how the sales process changed. “Waiting on clients is different,” he said. “They don’t come in and ask. Instead we source it, we find the item, then we invite the client in to see it. It’s an almost backwards process from before. Once you have the item in hand, you figure out which clients might be interested. Then you call them. Sometimes it works, sometimes it doesn’t.”
“We always need to have the biggest and most unusual pieces,” says Montelongo. “Those million-dollar category pieces are generally on memo and we have to have a few on hand at all times to show current clients. And for new clients, it’s like a fishing pole.”
Bigger sales. When inventory price increases, so do sale prices. “Prior to 2008, our largest sale was $90,000. Post 2008, several million. A few sales like that per year, that makes you a whole different business. The vendors look at you differently. Many now call me when they have an interesting pieces.”
This past Christmas, Montelongo’s sold a 16.50 carat diamond for $3.2 million. “Selling bigger pieces give us greater credibility in the marketplace,” said Montelongo. He also noted that selling larger pieces also changes his reputation within the supplier community.
Different Inventory. Montelongo added watches as a category about four year ago. Why add watches? “It was time,” says Montelongo. “You go as far as you can without watches and people ask for them. The watch brand business lends a lot of creditability to our store and our reputation. Breitling and Tag moved us up in the eye of the client.”
And better/different vendor relationships. Going hand-in-hand with better merchandise is better vendor relations. “My vendor relationships are twice as strong as they were eight years ago,” said Montelongo. “As that part of the business built, I started building stronger alliances with vendors.”
Montelongo says that there are certain sales reps he talks to daily. “I speak to my sales rep at Julius Klein every day. I ask what’s new, what came out of cutting, and the like. It’s a much closer relationship than I had before.”
(Jesse Montelongo, center, with presenter Pratima Sethi of Sethi Couture (left) and his fellow winners at the 2016 Centurion Show.)
Montelongo’s Fine Jewelry was awarded the Vendor’s Choice Retailer Awards’ ‘Most Outstanding Retail Partner’ at the recent 2016 Centurion Show in Scottsdale (in a three-way tie with Tivol and Shetler-Wade Jewelers). “I really appreciated that award,” said Montelongo. “I had a lot of phone calls, a lot of congratulations on that. Vendors recognize us as important in our own right because of the friends and relationships we have built with them. They are partners with us.”
While the high-end occupies much of Montelongo’s focus, the store did keep and values its traditional client base. “We still see students; they are our bread and butter. They are the $5,000-8,000 transactions. But now, rather than stressing over ‘Did I sell at least 30 $5,000 pieces, I focus on selling one big piece every so often.”
Montelongo’s has 13 employees, six of which are family. The family aspect offers Montelongo the chance to be out of the store with few worries. “It’s nice when you leave town and you know that your family has your back,” he says. “With family there, morale doesn’t suffer when I’m gone. They are a great crew.”
Aerial view of Montelongo's full exterior.