Gold prices have nearly tripled in the past six years as the rare and precious metal grew more valuable, particularly for investors weathering a down economy. Meanwhile, disposable income has dropped.
These market trends have hurt businesses that sell gold jewelry, but Dondero Diamonds and Fine Jewelry of Vineland has not only survived but expanded in the jewelry business recently.
Kevin Kleiner, who co-owns the business with his brother-in-law Ken Dondero, said economic factors such as the price of gold have customers looking for other, less expensive metals in jewelry, from silver rings to titanium wedding bands.
“It forced us to add more options in other metals, so if your percentage of silver in overall business was 5 to 10 percent, it now may be 30 percent,” Kleiner said. “Our goal is we have to be able to provide customers with a quality product at different price ranges.”
And while the business sells a variety of jewelry, most of the daily traffic comes from its repair and service work.
This has been a long-running trait of the business started in 1948 by Ken Dondero’s grandfather, Charles, who worked in the glass industry and ran the business part time.
The business was passed down to Bud and Betty Dondero, who also had other occupations and ran it from the basement of their home in Vineland. At lunchtime, employees would go upstairs for cookies from Betty Dondero’s cookie jar, Kleiner said.
When Ken Dondero took over the business from his father after college, the jewelry store became a full-time venture, said Kleiner, who bought into the business about a decade later in 1988.
“These guys laid the groundwork for us, everything from our philosophy to how we did business, how it was structured was set in place by them,” Kleiner said. “Bud and Charlie always believed taking care of the little things was the best way to earn the trust and loyalty of customers. Everybody seems to be conscientious when it’s a big-ticket item, but by showing your mettle on the little things is how you earn trust.”
Those services, from changing watch batteries, fixing bands and cleaning jewelry, also help maintain business year-round with less seasonal fluctuations, which enables the business to keep 12 employees even during off-peak, jewelry-buying times.
“One of the main advantages of having all that service work, besides earning the trust of your customers, is it also allows us to maintain a much more consistent staff so we’re not hiring a lot of seasonal work around Christmas because our staff is here all year round,” Kleiner said.
The economic downturn hit many retailers hard, and the jewelry industry was no exception.
By 2009, there were 16 percent fewer jewelry stores nationwide than there were in 2005, according to U.S. Census Bureau data. The stores shed nearly 32,000 jobs during that period.
New Jersey had almost 1,000 jewelry stores employing nearly 5,000 people in 2009, the latest year Census data was available.
Dondero has been able to weather this change despite rising gold prices and consumer uncertainty in the economy, and has even expanded.
The owners started a smaller jewelry store in Millville named Liz Ryan Gemstones about six years ago, Kleiner said.
Within the last year, they also started Benchmark Gem Brokers, for liquidating and buying and selling pre-owned jewelry.
In this business especially, the jewelry store’s reputation is important, Kleiner said.
“That liquidation process can be a little dicey if you don’t handle that with professionalism and integrity. You’re talking about (reality TV shows) ‘Storage Wars’ and ‘Pawn Stars.’ We can provide someone the same type of professionalism when they’re buying an engagement ring as when they’re selling an aunt’s old jewelry. We think there’s a synergy there can help each other, and it’s one more service we can provide,” he said.
Meanwhile, the future of gold prices can be anyone’s guess. Investors tend to flock to gold in times of economic uncertainty.
Gold is currently around $1,600 an ounce and has averaged a nearly 17 percent annual return in the past 10 years, according to goldprice.org.
“A lot of trends will have to do with metals pricing and how much disposable income people really have,” Kleiner said. “The challenges will be to respond to the changing needs of customers facing things we can’t control.
“There will always be a desire for jewelry, from an emotional standpoint, from a style standpoint. It has been around for thousands of years. Our challenge will be to find what our customers want.”
Dondero Diamonds and Fine Jewelry
Address: 2439 N. Delsea Drive, Vineland
Owners: Ken Dondero, 55, of Vineland, and Kevin Kleiner, 55, of Milmay
Contact Brian Ianieri: