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| February 2005
Merchandise / Diamonds How Julius Klein Got its Groove Back Diamantaire establishes a new identity BY ROBERT WELDON, G.G. Moshe Klein says FedEx is one of his best salespeople. The courier quickly delivers his diamonds to retailer clients all over the U.S., says Klein, director of sales at the Julius Klein Group, New York City. The courier isn’t the only reason the diamonds get to the retailer’s door quickly. “Our strength is our inventory,” says Klein. “Because of the depth of our inventory, we can supply diamonds of any kind: big or small, any shape, fancy colors, top to medium clarities.” There’s one more ingredient in Klein’s recipe for success: “family,” which is how he refers to his base of customers, hand-picked and carefully nurtured. “It is really a special relationship that we have with our customers,” he says. “We like one another, have respect for one another and even know each other’s kids.” Flourish or Flounder At a time when so much of the diamond-cutting business is heading for Indian or other shores, Julius Klein remains grounded in New York City. The company decided in the late 1990s that in order to stay put, it would have to sell to retailers instead of jewelry manufacturers. “It was hard to remain the middleman with growing pressure from abroad,” says Klein. “We also decided to concentrate on bigger, better goods.” While focusing on bigger diamonds, the company hasn’t let go of its strong position in smaller diamonds. To develop manufacturing efficiencies, JKG also employs over 300 people in its cutting factories in Israel and South Africa with the capability to fashion diamonds from under 1 carat to well over 5 carats. The company strives for excellent relations with its own suppliers – “through good and tough times,” says CEO Martin Klein. The Kleins don’t reveal the size of their business, but their ability to fill any order of large, important diamonds reflects their dominance in the field. They are one of a handful of triple sightholders of De Beers’ Diamond Trading Co. To accommodate burgeoning overseas sales, the company now has sales offices in Los Angeles; Tel Aviv, Israel; Johannesburg, South Africa; Hong Kong; and Antwerp, Belgium – all opened in the past three years. The company also shares a close relationship with Eliaz Diamonds, Tel Aviv, Israel. Julius Klein Group is also building strength through joint ventures and acquisitions. It owns Ritani, a New York City jewelry company. “Ritani is achieving two to three times inventory turnover annually at participating retailers and is backed by a huge marketing consumer campaign,” says Klein. JKG also makes finished non-branded jewelry for retailers who prefer acquiring finished pieces for stock. Challenging Retailers to Think Big Among the Kleins’ top goals is to convince U.S. retail jewelers to show consumers large, beautiful diamonds. “Will you lose the sale to a competitor when a customer comes in looking for a large stone?” Moshe Klein asks his U.S. retailers. “While America’s wealthiest patrons may buy a diamond quickly, these items can’t be commonly sent out on memo, no matter how good a salesperson FedEx is.” Representatives of JKG sit down with retailers in regions with pockets of affluence to prepare them for this situation, says Brandee Dallow, JKG’s director of marketing and communications. “We’ve found that by stocking them with a large, aspirational diamond, we help drive demand at the consumer level,” she says. “There’s a special magic about consumers looking at something they’ve never seen before that leads to an incremental boost in demand.” This was the case for jeweler Leo Fasseas of Leo Fasseas Jewelers, Livingston, NJ. “Our program with Julius Klein just started and already it has paid off. We had a pair of important diamond earrings on consignment. I know they would not have sold if we hadn’t stocked them,” he says. The Kleins, it seems, are as good as their word. “I consider the Kleins true friends,” says one jeweler at a well-known jewelry store in the Southern U.S. “They did a very good job convincing us that larger diamonds would sell at our store and, indeed, they have. While our relationship with them is only a couple of years old, we’ve sold several large diamonds already. They also respect our store’s need to inspect each diamond thoroughly before we buy it and to brand it with our store’s name when we sell it,” the jeweler says. “That aspect is critical to us.”
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