Hallstead Jewelry Situation Analysis

Hallstead Jewelers

Situation Analysis

Gretchen Reeves and Michaela Hurd, two partners of Hallstead Jewelers, were looking at declining profits over the last two years. Their grandfather started the company in 1924 and grew it into one of the largest jewelry stores in the tri-state area. Hallstead Jewelers (HJ), pg. 1. Due to unchanging sales since 1999, profits were beginning to slip and the two sisters decided a change was in order. HJ, pg. 2. In 2005, the company moved into a larger location located two blocks away in a more principal retail location. However, even after the move, Hallstead Jewelers continued to experience income loss.

The two sisters would like to build on the strengths of the company, which are, first and foremost, that it is one of the largest jewelry and gift stores in the United States that carries an extensive supply of goods. Not only are they known for being the largest jewelry store in the US, but they are also known for being a high quality seller, which comes with a loyal customer base. Along with these strengths, the company needs to identify and improve on its weaknesses. Having only one location limits their market significantly, therefore, having an internet website would be resourceful, however, they do not offer internet nor do they offer other types of sales platforms. Furthermore, their pricing formulas are not competing with rival companies. The two sisters would like to take advantage of the opportunities in this industry but also be aware of the threats. Some of the opportunities include, expansion into retail locations, more online sales, branching out into new business ventures, and increasing advertising to potential customers. The threats to this industry include the slowdown of the economy, the sales of non-authentic goods, and consumers buying less expensive substitute products. (See Appendix A)

Problem Definition

Up until 2004, Hallstead jewelers had been in the same location on Lake Avenue and Second Avenue for over 80 years. HJ, pg. 2. It was originally an area that was the principle location for retail, however, over time the retail shopping area had shifted two blocks over to Washington Street. Gretchen and Michaela saw this as a problem contributing to their declining income and in 2005 they moved to a location 50 percent bigger on Washington Street. During the time of the move the industry started to show more interest in internet based jewelry retailing, and an internet based jewelry seller named Blue Nile had become the second largest diamond retailer in the country. HJ, pg. 2. Blue Nile was second only to Tiffany and Co., who had become the number one jewelry retailer in all the country, and which had an origin much like that of Hallstead. HJ, pg. 2.

Gretchen Reeves and Michaela Hurd had failed to see this industry trend, HJ, pg.2.