Growth Strategies

Not Just Another Jewelry Company

A finance chief outlines a strategy of selling jewelry based on its “meaning” rather than its glitter.
David KatzMarch 17, 2016

“Diamonds are a girl’s best friend,” says Jayne Fitzpatrick-Conway, the CFO of Alex and Ani, a supplier and seller of bangle bracelets, when asked about her favorite kind of jewelry.

Indeed, Fitzpatrick-Conway, a Harvard MBA with a consulting background at Bain and Co., admits to having a particular attraction to finance and strategy jobs in the jewelry industry. That career pattern seems to have originated in her previous post as the finance chief of CIRCA Brands, a global reseller of previously owned luxury jewelry.

Drive Business Strategy and Growth

Drive Business Strategy and Growth

Learn how NetSuite Financial Management allows you to quickly and easily model what-if scenarios and generate reports.

At Alex and Ani, however, the strategy focuses not so much on bling and impulse buying as it does on establishing “meaning” and generating long-term relationships with customers. “Where some might view us a jewelry company, the consumer has loyalty around the meaning of our jewelry and their emotional connections to those meanings. That’s what gives us sustainable growth, beyond [being] just another jewelry company,” says Fitzpatrick-Conway.

jewelry company Jayne Fitzpatrick-Conway

Jayne Fitzpatrick-Conway

She was a key player in a similar approach at Dunkin’ Brands, where, rising to the position of chief strategy officer, she led the strategic planning process for the national expansion of the Dunkin’ Donuts brand that employed the “America Runs on Dunkin’ campaign. “People thought we were a donut company, when we were really delivering a consumer value proposition around beverage [i.e., coffee] loyalty,” she recalls.

The finance chief, who has been with Alex and Ani since June 2014, credits her boss, company founder and chief executive officer Carolyn Rafaelian, with establishing the strategy. While the products the company sells must be beautiful, they must spawn personal associations in buyers to keep them coming back, the CFO says.

She maintains that connection is significant in the selling of bangle bracelets, since consumers tend to wear stacks of them on their wrists. As an example, Fitzpatrick-Conway offers an anecdote. At a restaurant one day, she observed a woman describe her stack of bangles to another woman. “She literally went down each and every bangle, and she had either an occasion or a person or a reason why she had this bangle,” according to the finance chief.

Such reasons for buying jewelry “makes it so much stickier and the customer ultimately more loyal” than focusing on stylishness or glitter, she says.

In line with that effort, Alex and Ani, which takes in about $300 million a year in revenue, constructed a web application last year that asks customers to plug in certain personal preferences when they register for it. The app, which, like the firm itself, has a distinctly New Age feel, provides app registrants with their birthstones, their zodiac signs, their native trees, and their personal flowers. Then it offers them bangles, as well as charms, rings, and necklaces, all ranging from about $18 to $38, with their personal symbols.

An Online Offensive

The app is part of an overall thrust to increase the Cranston, R.I.-based company’s online sales, which it forecasts will grow more than 30% a year over the next three years. Fitzpatrick-Conway notes that industry analysts no longer gauge the value of retail shares merely in terms of comparative sales figures generated by brick-and-mortar stores, “but, rather, combine the entire b-to-c platform.”

The company’s move into digital technology will be aided by the recent appointment of Oscar Salazar, one of the founders of Uber, the online car service, to Alex and Ani’s board. Although the jewelry distributor is fundamentally different from Uber, the aim is for Salazar to advance “the notion of creating a technology that fundamentally, radically, alters the normal thinking of the particular industry,” she says.  

“It’s less about trying to Uberize Alex and Ani than having somebody who can really push you from a strategic perspective on how you can deliver,” she adds.

The finance chief feels that the products the company distributes are especially well aligned with its digital goals. “It’s small, it’s easy to ship,” she notes, and “digital may be a place where we can have a more uniform differentiated consumer experience that we can really control from a standardized level.”

In contrast, although the firm tries to train its retail employees (which it calls “bartenders” to connote a certain relaxed, European quality) in a standardized approach to selling, “there’s always a variability [according to] the specific attendant [and] how they execute the interaction with the customer,” she says.  

“We feel like it’s highly more controllable in a digital environment.  And, more importantly, [digital is] what the consumer’s asking for,” Fitzpatrick-Conway adds.

Hanging on to Bricks and Mortar

To be sure, the company isn’t planning on giving up on bricks-and-mortar sales anytime soon. In the past five years, Alex and Ani (named after the founder’s daughters) has grown from a company of 25 people to more than 1,000 employees and 65 retail stores, according to the company.

Under Fitzpatrick-Conway’s guidance, it plans on opening 25 to 30 U.S. retail locations by the end of this year, besides opening stores in Australia and the Middle East. In the latter case, the locations will be in wealthy countries like Saudi Arabia. “We continue to be very interested in the Middle East simply because women really only have their arms and their feet to display accessories, and obviously the wealth of that market is tremendous,” she says.

However, she adds, “we will not enter international markets in the absence of having a high degree of confidence we have the right partner who has the right infrastructure to execute to our necessary level. ” 

Still, Alex and Ani may have reached a plateau in terms of revenue growth. “I will say we’ve had strong growth through many years. Obviously, when you have a higher number to grow from, it becomes harder to keep the absolute percentages the same,” says Fitzpatrick-Conway.  

With new growth tough to come by in its current privately held form, is the company setting its sights on an initial public offering?

“We’re always evaluating liquidity events,” she acknowledges. And the company’s January vertical integration with Cinerama, its affiliated manufacturing company, could eventually make one more likely.

The move stands to buttress the company’s brand by making it a manufacturer as well as a distribution and fulfillment company. “Under the Alex and Ani umbrella, if we would ever have a liquidity event, we would trade at a much higher multiple than they would as a small manufacturing facility in Rhode Island,” she said, referring to Cinerama.

The integration would also enable Alex and Ani to boost its reported earnings by making the relationship between the distribution and manufacturing more efficient. But an IPO would require at least two years of audited financial statements, and the company is only just beginning to prepare for its first complete audit by Deloitte and Touche.

In turn, the audit is complicated by Alex and Ani’s new, complex relationship with Cinerama. “We did not buy Cinerama as a legal entity,” Fitzpatrick-Conway explains.  “We bought all the component pieces associated with the Alex and Ani business.  But Cinerama is still a legal entity that could operate in non-competing categories.”

Thus, the company won’t be IPO-ready until at least 2017 “and likely maybe beyond that,” she says. “So we have no large liquidity plans at this time, particularly with the acquisition of our assets from Cinerama and our focus on integration.”