Read more about this source on: PROFIT
Today, you’re wearing the blue dress. Why not pop a Swarovski crystal into your silver Kameleon necklace for a classic look? Next week, when you wear your green outfit, you’ll switch out the crystal and insert a matching “Emerald Isle” jewel. And maybe, in the evening, you’ll pop the crystal into your silver bracelet when you head out on the town.
Robert Smith, JewelPop president and CEO
Photo: Aaron McKenzie Fraser
Mix and match is the watchword at JewelPop Inc, the Dartmouth, N.S.-based jewelry company whose innovative Kameleon line of jewelry has become a staple for bling-loving women of a certain age. With a few silver basics—ring, necklace, earrings, pin and pendants—and a smattering of complementary, swappable inserts, consumers can enjoy a jewelry box full of fun and affordable options to suit any mood, setting or wardrobe change. “There’s a good, strong demand for our product,” says JewelPop president and CEO Robert Smith. “We’re fortunate that women like nice, shiny things.”
In 2004, Smith was wholesaling silver jewelry to retailers across Canada through a company called Lotus Jewellery when he came up with the idea for interchangeable jewels. “There was nothing like it on the market,” he says. “I knew if I could create this, it could have worldwide appeal.”
Working with a jewelry manufacturer in Thailand (for reasons of both cost and know-how), Smith spent a year and about $150,000 coming up with the initial designs, and then another year and $30,000 patenting his invention before taking it to market. His target customers: women aged 35 to 55—“The mature woman who has money to spend and can treat herself.”
Smith débuted his new jewelry line at key trade shows in the U.S., and backed that up with full-page ads in a major jewelry industry buyer’s guide. The Kameleon line took off like a rocket. “We had orders from customers based solely on the ads,” recalls Smith. With the U.S. accounting for 96% of sales, JewelPop’s revenue has risen from $10,000 in 2006 to $14.5 million in 2011—one of the most spectacular five-year growth rates in the history of the PROFIT 200. (However, PROFIT rules prevent companies with small base-year revenue from hogging the spotlight, so we recalculated JewelPop’s ranking based on our minimum base-year figure of $200,000 in sales. Even then, JewelPop’s “normalized” growth rate is a sterling 7,156%, good enough for fifth place in this year’s ranking.)
But a great idea alone does not a growth business make. Smith has had to devise a variety of innovative strategies—in production, distribution, financing and marketing—to make JewelPop shine so brightly. His main challenge now is coming up with complementary new designs that will strengthen JewelPop’s reputation as the North American leader in fun and flexible jewelry systems. “You have to keep the consumer interested,” says Smith.
He now employs three designers in Dartmouth who churn out about 30 sparkly new “pops” twice a year (priced at $30 and up), as well as new “pieces” to hold the pops, such as rings, bangles and even sunglasses. To encourage collectors, JewelPop produces compact cases that store 14 pops; Kameleon retailers (mainly higher-end independent gift shops) often offer them as promotions to customers who spend $100 or more. “People let us know they have 10 to 15 of these compacts, and they are all full,” says Smith. He estimates the average fan owns $500 to $1,000 worth of Kameleon products.
Because it takes consumers time to understand how the Kameleon line works, JewelPop sells through independent retailers that emphasize customer education and service; Smith says mass merchants, such as Wal-Mart and Sears (which his other company, Lotus, sells to), aren’t suitable purveyors of pops. His 200-plus dealers in the U.S. and Canada pay for the privilege, receiving greater territory exclusivity if they sell more product.
In a reversal of usual practice, retailers also pay for their orders up front; JewelPop insists on payment by credit card upon delivery—not the usual 30- or 60-day terms. Smith says the policy was essential to self-finance the new company without bank loans. “There was resistance at first,” he says, but most retailers fell into line quickly “because the product was something they really wanted.”
One Vancouver-area retailer confirms that she resents paying up front but agrees that JewelPop’s products are worth it. She says the line attracts buyers from all over the Lower Mainland, and some women come to the store in groups for impromptu Kameleon-buying parties.
JewelPop demands a lot from its dealers, but it also wants to be partners in their success. To help JewelPop’s dealers sell more, the company recently completed a 20-page workbook called Road map to $100,000, which explains to retailers, step by step, how to boost their Kameleon product sales into the six figures. “We try to take the retailer by the hand and say, ‘This is what you need to do—in Year 1, Year 2, Year 3,’” explains Smith.
A combination of extensive trade-show promotion, commissioned sales reps and costly full-page ads in fashion magazines, such as Elle and Martha Stewart Living, keeps demand for the Kameleon line humming. JewelPop also maintains an active Facebook page, which has more than 16,000 followers, and features lively dialogue between product fans and individual dealers eager to sell them more.
But success breeds imitators, and Smith recently was forced to go to court to discourage one U.S. competitor from imitating his products and branding too closely. “That was an expensive battle,” Smith sighs. But he points out that the case was well covered in the trade press: “So people are aware that we will vigorously defend our intellectual property.”
Soon, Kameleon will be just one of several brands in the JewelPop portfolio. At a trade show in Las Vegas in June, the company is débuting a line called GemDrops—a new series of mix-and-match jewelry combining necklace chains, colourful crystal ornaments and ornate silver bails (the interchangeable devices that connect the ornaments to the chains). The new brand, conceived just last September, will launch with more than 50 orders (each worth $4,000 or more).
Smith insists the flagship brand won’t suffer, though, because his designers have stockpiled three years’ worth of new Kameleon designs. JewelPop also is preparing the U.S. launch of a Lotus brand called Ice925, which combines sterling silver with Canadian diamonds. The other benefit of adding new brands, explains Smith, is that it allows JewelPop to sign up new retailers that have been shut out of the Kameleon line due to the company’s territory-exclusivity policies.
Smith, now 49, says he still has two or three more new brands up his sleeve. “We’re positioning ourselves as a company with innovative brands and exceptional products,” he says. “You have to keep moving forward. You can’t put all your eggs in one basket.”
For more stories from PROFIT magazine click here.