In 2007, Julie Haack bought the family business and Sharon Road mainstay, Donald Haack Diamonds and Fine Gems.
Profits were high, and expectations were higher. It was fabulous. All the numbers looked good. It looked like (running the business) would be just a dream to do, Julie Haack says.
And so came the perfect storm: The recession hit, and the retail side of the business fell by more than 40 percent. Two of Haacks key employees and friends left the industry. Then her father, Donald, died in 2009.
Everything was sort of falling down around me, Haack says. I prayed. I sat there, ... and I looked in our bank account and said, Oh my God, literally, what am I going to do? ... Theres no money in the bank. We cant run a business with no cash flow.
But she didnt quit. Haack, now 49, got creative. It was a turning point for the company, which had been in the Haack family for more than 30 years.
An unexpected arrangement: To keep the doors open, they would need capital, so Haack considered asking several individuals to invest in a few diamonds. The store would then split the profits with the investors when the diamonds sold.
But Haack was cautious about approaching them. Then, miraculously, she says, they approached her. Theyd come to me and say, Julie, Hows your business? Haack recalls.
They invested, Haack had the capital she needed, and once the diamonds sold the investors made a nice profit, she says. She then focused on cutting costs. Haack closed the store on Mondays. She cut rent costs in half by consolidating the two-story business into a single floor. And when four of her 15 employees left, she didnt hire.
Many irons in the fire: With fewer customers interested in buying expensive jewelry, there was increased traffic for appraisals, repairs and customizations to existing jewelry. Others were interested in selling. So Haack Diamonds acted as a broker. If someone walked in and said I need money right away, I would find a buyer immediately, get the best deal, and wire the money into the (sellers) account, says Haack, who charged a brokerage fee.
She also now spends a lot of her time helping customers buy diamonds as investments.
One of her most creative ideas was the Wednesday WOW e-blast. Once a week, Haack Diamonds emails customers three items, marked down to a WOW price for customers on the listserv. The emailed jewelry is consistently snatched up within minutes. Its just an indication of how little time people have to walk in the store, and how much they love the 1, 2, 3 (transaction), Haack says.
Looking forward: Haack says 2008, 2009 and 2010 were really just years to survive. And though sales arent at pre-recession levels, profits in 2012 were better than theyve been in four years. Haack now speaks to other business owners and leaders about innovation and adjusting to the new economy.
Were leaner, more efficient ... smarter about what were doing, Haack says. When I first took over, (my dad and I) would talk about things, and hed say, Go ahead and try it and see what happens.
Says Haack: I did.
Turning Point tells the story of how a business solved a problem and turned a corner. Contact Caroline McMillan at 704-358-6045 or firstname.lastname@example.org
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