Enjewel Closes Down

April 4, 2001

Enjewel Closes Down

Enjewel, the online bricks-and-clicks consumer jewelry site, announced in an e-mail to affiliates today that it's ceasing operation. "It is with deep regret that I must inform you that Enjewel has not been able to raise the capital required to continue in operation and therefore has closed its e-commerce site," wrote Shelley Ginsberg, president & CEO of the New York City-based company. Ginsberg told Professional Jeweler he was not yet ready to comment on the news. In its e-mail, Enjewel advised jewelers to transfer any Enjewel-hosted Web sites to other hosts.

Under the Enjewel arrangement, consumers could buy jewelry from the Enjewel network by entering a participating retailer's site, a participating manufacturer's site or the Enjewel site. Each sale of jewelry was linked to a local affiliated retailer with a profit-sharing and service arrangement for the retailer.

Because only authorized retailers were listed for a selected piece of jewelry, the Enjewel site allowed manufacturers to control distribution of their products online, while avoiding "channel conflict," where the manufacturer sells directly to consumers online, angering his "on-the-ground" retail distributors. If consumers entered the site through a retailer's site, they only saw the lines that retailer was authorized to carry.

The original Enjewel investor group consisted of well-known retailers such as Tivol, Diamond Cellar, Lee Michaels and Lux Bond & Green. Founding manufacturers included Lagos, Honora, Lazare Kaplan and M. Fabrikant & Sons. Those core members were joined by other equity and non-equity participants in manufacturing and retailing.

Despite its demise, Ginsberg told affliates in his e-mail, "I continue to believe that the concept we have created will at some point serve as the e-commerce model within our industry." Countless consumer Web sites, both within and outside the jewelry industry, have closed in the past year as investment money has disappeared.

- by Peggy Jo Donahue