The Democratization of Luxury
HAIGO DERIAN IS A TRUE ENTREPRENEUR who understands the changes happening in the trade and has been monitoring it for ten years before expanding his business. “By nature, we’re not a true luxury market,” says Derian. “The current luxury market is a little bit more pedestrian, which is good news—on any important street today, you’re allowed to walk in, anyone is—and, the assortment has been broadened.”
Derian illustrates that a customer could buy a cardholder or a pair of cufflinks at a reasonable price in an elegant, luxurious store. At his locations, this strategy is used to entice potential customers into the store and expose them to their inventory.
“We want our environments to really focus on the future of luxury, which is a little bit more casual, a little bit more encouraging,” says Derian. “We don’t want people to come in and feel like they shouldn’t be welcome in our environment,” he says.
This fact shows in his newest and third location at Sherway Gardens Shopping
Centre, in Toronto’s affluent west-end neighbourhood of Etobicoke. Derian
and his business partner Jeff Karadjian launched their masterpiece late last
year: an almost limitless structure consisting of three independent retail
concepts—Canada’s first Chopard Boutique, OMEGA at L’ORO Sherway Gardens
and the retailer’s flagship multi-brand environment positioned in between.
Many jewellers get nervous when making significant investments for large expansions. The new flagship is the exclusive destination in Canada for the luxury timepiece collection Ulysse Nardin, in addition to Glashutte Original, Jaquet Droz, Linde Werdelin and other brands. OMEGA at L’ORO Sherway Gardens is a standout feature that carries more than 200 OMEGA timepieces.
The third concept store, the Chopard Boutique is a partnership with the
Swiss luxury retailer and timepiece brand. The boutique offers an assortment for women and men from the brand’s collections Happy Sport, Happy Fish, Mille Miglia GTS and Imperiale. Within Canada, showcased items, better known as “boutique exclusive” pieces can only be purchased within this store.
The 30-foot-tall innovative and impressive storefront at Sherway Gardens is masterly crafted to capture the three stores independently, while still maintaining a consistent level of heightened décor Derian always strives for.
“We had an opportunity to have a very impressive storefront. Within the Sherway Gardens Shopping Centre, we’re the only independent retailer that has a storefront to this degree,” says Derian who calls this passionate endeavor the most satisfying project to date.
He adds that he is very pleased with the finished store as well as the outcome of the first four months of operations.
One recipe for success, Derian says, is ensuring that new strategies and new business practices are in line with the ever-changing marketplace.
“We had a nose and an eye for what we believed was the future, and everything we made, we put back in,” continues Derian, speaking of the company’s successes. “The process during growth has been a challenge, but that’s the way we grew our business, and I believe that’s the way most jewellers build their business.”
Derian is a second-generation jeweller who, from a young age, had a natural understanding of how a jewellery store functions. Derian’s father Vahram, who founded the first L’ORO Jewellery location in 1984, mentored him to understand the trade and the difficulties that lied ahead.
At first, Vahram wanted his son to pursue a career outside the jewellery industry. “My father recognized and encouraged my opportunities to go on and
have a professional career after my post-secondary studies, he wanted me to
embrace that and go in that direction.”
However, the younger Derian was passionate about the trade and wanted to be involved with the family business. In 2004, at the age of 25, through his father’s support, Derian opened and operated his first L’ORO Jewellery store.
In 2007, he partnered with his lifelong family friend, Jeff Karadjian, to launch Cupido, Canada’s first retailer dedicated to the fashion-luxury watch and jewellery segment. Business for the duo grew at an exponential rate. They went on to create two more Cupido locations over the years and a franchise partnership with jewellery leader, Pandora.
In fall of 2015, Derian and Karadjian completed their empire by acquiring L’ORO Jewellery from Vahram Derian who still maintains an active role within the business. Derian recalls, “Eleven years ago, my father had one location with five employees, three of which were family members and two part timers. It was a much different time and business moved at a different pace. It was a very nourishing time to my career and development, thus giving me and the
entire culture of our companies a true sense of meaning, especially for the
values we worked so hard to preserve.”
Currently, Derian and Karadjian own and operate 17 retail environments
throughout Ontario and British Columbia and have a team of 320 employees. This includes stores under their multi-brand concepts L’ORO Jewellery and Cupido as well as their mono-brand stores, including Chopard, OMEGA at L’ORO Sherway Gardens and nine Pandora concept stores. This number also includes the recent acquisition of five existing Pandora stores in British Columbia in early 2016.
“The newly acquired five Pandora stores in British Columbia have given our group the opportunity to extend our reach nationwide,” says Derian. “We are excited to operate in this new territory and look forward to continued growth in the coming years.”
“Our growth over the years, including our recent expansion out west, illustrates our passion and dedication to not only the business, but also to preserving our values,” adds Karadjian, who is heavily involved in the Pandora side of business. “It’s a commitment to our company’s culture and origins.”
Since acquiring the aforementioned Pandora franchises, Derian and Karadjian
have now taken the business nationwide. “The structure of our staff hasn’t changed much, but it has required additional roles to satisfy the new business environment.”
Derian and Karadjian have become more sophisticated in their operations and their acumen has increased significantly, which Derian says is through experience and practice.
“Ten years ago, we couldn’t admit our faults because we didn’t think we had any—especially as an independent, family-owned business,” he says. “We put our heart and soul into everything we did, and it’s hard to look in the mirror and say, ‘Maybe we’re not doing this right.’”
Recognizing these faults, Derian says, was the first step; the second was implementing an effective strategy to improve quality of service. “We’ve put a plan together to elevate our talent pool. Talent is a major component in fine-tuning our quality of service practices.”
Derian and Karadjian created an on-boarding strategy for new professionals within their working environment together with tools to help cultivate, encourage and support existing teams.
“We want our employees to treat our customers well—from the moment they walk into the store to the moment they leave,” says Derian.
Relationships & Partnerships
Although customers are important to the company’s success, Derian says building relationships with vendors, landlords and other professionals who are in the business, is also vital.
In today’s luxury market, Derian says, jewellers can increase their rate of
success by committing to a specific path. For him, this direction was through branded product lines. However, before making such a long-term investment, the reputable jeweller says, “Retailers must first believe in the products and brands they sell, not just from a fiscal sense, but also a human perspective.”
“Specifically in the watch world, once you invest in a brand, you’ve made a really big commitment,” says Derian. “Likewise, the vendor and the brand have made a commitment to you as well.”
He points out brand commitment means going through the highs and
lows—all the time. “This helps us really forge partnerships with our suppliers, but it also helps us with our buying. Investing in a brand means we’re really going to have a good broad representation of the DNA of that brand with respect to product assortment.”
Furthermore, Derian emphasizes that brand commitment means meeting high customer expectations. “Customers expect to see certain products—even if you don’t want to stock them.”
Procedures, Products and Customers
Derian and Karadjian implemented a single strategy to encompass three areas: procedures, product knowledge and customer experience.
“We created a new role within our organization and we’ve filled that with a training manager at L’ORO, specifically for product knowledge and processes,” says Derian. “We want our sales staff to know how to react and act as soon as a customer comes into one of our stores. Furthermore, we want our staff to know how to effectively deal with a customer after the sale—the ongoing service that follows for years to come.”
When it came to investment strategies, the Derians took an old-world approach of continually working hard and investing back into the business and as a result, the company had a very responsible growth strategy. Using such an approach, Derian and Karadjian took some risk and made a modest investment when opening their fashion-luxury retail concept store, Cupido.
“Like my father, we used a similar practice of continually investing back into the company and trying to grow in the most responsible way possible,” says Derian. “I think every independent business owner recognizes this and has gone through this pain. As you grow quickly, if you’re not responsible, it can be very challenging when you hit a rough spot.”
Derian and Karadjian learned how to limit their financial risks as well as invest in product assortment that made more sense or that was showing growth.
“In the past, you could do everything and make errors,” says Derian. “Today, a jeweller can’t afford to take that many hits, to make that many errors. The margins are different, rents are higher and business has changed.”
For jewellers pursuing growth strategies, Derian recommends to mediate risk and take a limited number of chances. “Take chances on opportunities that you believe will be successful.”
“We take calculated risks, but we don’t gamble with our business model,” he says. “Calculated risks, for example, mean that for the next three to five years, any necessary investment will require constant input.”
“We have to be honest with what we’re getting into, and if we’re entering a new physical space physically, virtually, and culturally, we also have to really be willing to commit to that as a long-term strategy.”
The jewellery business, Derian says, is not about short-term gain. “We do not invest in products that are here today and gone tomorrow. There is no incentive for us. We invest for long-term gain.”
An Appetite for Further Growth
“Our work is not done, we have other growth strategies—organically and internally—focusing on like-for-like sales and quality of sale,” says Derian. Despite the rise of e-commerce, Derian and Karadjian still have an appetite to grow in a physical, traditional perspective, with more locations. “We are very fortunate to be a participant in the current era of re-mapping luxury within the market. As such, we intend to find new and progressive ways to maintain the traditions and values of our artisan roots and old-world charm, for me what I know today as the jewellery and watch industry.”