Company Profile: Bijoux Terner

Amy Keller | 5/23/2011

Bijoux Terner has added 250 stores as revenue has grown in "higher double digits" over the past two years, says CEO Gabriel Bottazzi, at a mock store at the company's headquarters near Miami. [Photo: Jeffrey Salter]

In the 1960s, Cuban refugee Salomon Terner and his family founded a handbag factory in Miami. Later, they added costume jewelry to their product line. In 1974, they separated the two businesses, with Terner running the jewelry company, which he named Bijoux Terner.

For decades, Bijoux Terner sold mostly to small retailers through merchandise marts, operating only a few retail locations, including a small kiosk in Miami International Airport. In 1997, serendipity created a new business plan. With sales lagging at the kiosk, company lore has it that Rosa Terner, Salomon's daughter, priced all its merchandise at $10 in a last-ditch effort to clear inventory. Everything sold within a matter of hours — and the company realized that the single price point was perfect for travelers in a hurry.

All items at Bijoux Terner stores are $10. [Photo: Bijoux Terner]

Bijoux Terner began focusing on the travel retail industry, opening stores in airports, cruise ships, resorts and casinos. Today, there are more than 650 locations in 60 countries — most owned by licensees or franchisees. The stores carry trendy accessories, jewelry and travel goods. At any given time, Bijoux Terner offers its operators around 30,000 items. Everything is priced at $10.

The Medley-based company's business plan is built single-mindedly around impulse purchases. Stores turn over merchandise frequently and feature inviting, colorful displays that are calculated to turn lookers into purchasers. In some locations, 90% of people who walk in buy something. Watches, shawls and costume jewelry make up the majority of sales. "We probably sell more watches than many big brands that you know, combined," says Gabriel Bottazzi, appointed CEO by private equity fund Arcapita after it bought a majority share from the Terners for $90 million in 2006.

Bucking trends in the retail world during the recession, Bijoux Terner has been on something of an expansion tear. "At first, we focused on making sure that the base was solid," Bottazzi says. But with revenue growth during the past two years in "higher double digits," the firm has added nearly 250 locations and invested close to $2 million into upgrading its Medley distribution center and its inventory, production and planning infrastructure.

The company will now see whether its one-price accessories concept will work at other fixed price points.

In March, it rolled out three new brands — two at $19.99 and one at $29.99 — after a year of test marketing. For now, they're being sold in store-within-a-store setups (on cruise ships or in department stores, for instance) and not in Bijoux Terner stores. Bottazzi hasn't decided how franchisees and licensees with stand-alone stores will incorporate the new, higher-priced brands.

Success at the higher price points will require both higher quality products and a different shopping experience, says Cliff Courtney, a consumer behavior expert who is chief strategy officer of Fort Lauderdale-based Zimmerman Advertising. The Bijoux Terner stores, Courtney says, "have done a very good job of establishing a value proposition." But, he cautions, that proposition is "very precarious, especially if they're adding new price points."

[Photo: Bijoux Terner]

Bottazzi understands the need for proceeding carefully. But he says the expansion calls on the firm's core competency. "We understand fashion," he says. "And we know how to take some of the trends in fashion into very high-volume components."

As it looks for new price points, maintaining the old $10 price in the company's core brand also may be a challenge. Material costs are increasing, as are currency pressures, particularly in the company's main manufacturing locations in India and China. To keep costs down, Bijoux Terner does much of its own sourcing, closely watches manufacturing and leverages its high volume for better pricing.

But Bottazzi says Bijoux Terner's $10-for-everything approach will remain the core of that company's strategy. "Obviously, if there is hyperinflation at some point in time, we will have to address that," he says. But for now, "Bijoux Terner will always be $10."

With recession still roiling much of the retail world, he says, "this is a great time for us because the consumer is aligned with the value proposition that we operate on."

Bijoux Terner has 650 stores in 60 countries, including this one at Miami International Airport. [Photo: Bijoux Terner]