Hallstead Jewelers
COMPANY OVERVIEW
Hallstead Jewelers has been one of the premiere jewelers in the United States for 83 years. Located in the largest city in the tri-state area, the company has remained a family business since its inception. Up until 1999, the company had operated in the same location without the need to expand or relocate due to its superb reputation and loyal customer base. However, Hallstead Jewelers reached a point during that year when profits began to decrease and sales became stagnant. After a few years of this trend it became obvious to the owners that relocation was necessary. So in 2004 the owners, Gretchen Reeves and Michaela Hurd made the decision to relocate to a larger building in an effort to expand and grow the business. Since the new facility was only two block away from the original location, it was anticipated that there would be no loss of their loyal customer base. The owners also made the decision to expand the product line in hopes of increasing sales. However, the company faced stiff competition from large retailers such as Tiffany and Company and the internet business, Blue Nile.
Unfortunately, the relocation did not produce the results that Gretchen and Michaela expected. Instead, revenue has continued to fall. An analysis was conducted to identify operating issues and to determine a course of action that would improve revenue and business profitability. Appendix A provides a detailed account of the company’s profitability for the years 2003, 2004 and 2006 respectively. Appendices C, D and E detail the impact upon company profitability based upon various levels of ticket sales during these same periods. The average ticket price fluctuated over these periods. An analysis of this information identified the following issues.
OPERATING ISSUES
The following issues were identified:
*The company has failed to maintain pace with change in the landscape of businesses in the area.
*Revenue and profits have continued to decrease.
*The
Hallstead Jewelers has been one of the premiere jewelers in the United States for 83 years. Located in the largest city in the tri-state area, the company has remained a family business since its inception. Up until 1999, the company had operated in the same location without the need to expand or relocate due to its superb reputation and loyal customer base. However, Hallstead Jewelers reached a point during that year when profits began to decrease and sales became stagnant. After a few years of this trend it became obvious to the owners that relocation was necessary. So in 2004 the owners, Gretchen Reeves and Michaela Hurd made the decision to relocate to a larger building in an effort to expand and grow the business. Since the new facility was only two block away from the original location, it was anticipated that there would be no loss of their loyal customer base. The owners also made the decision to expand the product line in hopes of increasing sales. However, the company faced stiff competition from large retailers such as Tiffany and Company and the internet business, Blue Nile.
Unfortunately, the relocation did not produce the results that Gretchen and Michaela expected. Instead, revenue has continued to fall. An analysis was conducted to identify operating issues and to determine a course of action that would improve revenue and business profitability. Appendix A provides a detailed account of the company’s profitability for the years 2003, 2004 and 2006 respectively. Appendices C, D and E detail the impact upon company profitability based upon various levels of ticket sales during these same periods. The average ticket price fluctuated over these periods. An analysis of this information identified the following issues.
OPERATING ISSUES
The following issues were identified:
*The company has failed to maintain pace with change in the landscape of businesses in the area.
*Revenue and profits have continued to decrease.
*The