Shreve Crump & Low can trace its lineage back to 1796 and is described as the oldest jeweler operating today in the United States. David Walker bought the venerable business in 2006 and almost immediately ran into the storm engulfing the financial world after Lehman Brothers collapsed. Surviving that crisis taught Mr Walker valuable lessons that are being put to good use this year as he, along with children Brian, Brand and Olivia, steer the company through another perilous period. Rob Corder caught up with David and Brian over zoom in the summer, just months after they were able to reopen their stores in Boston, MA, and Greenwich, CT, after the covid lock down. Here is their story.
WatchPro: Shreve Crump & Low’s logo and coat of arms proudly states that you have been trading in fine jewelry, watches and gifts since 1796 so it is fair to assume the business has overcome greater challenges than this year’s pandemic. It is also almost certain you have never faced a crisis like this in your lifetimes. As we speak today in mid-August, are you hopeful the worst is behind you?
David Walker: We have weathered the storm, I would say, and hopefully it won’t come back and force us to close down again. If that doesn’t happen, we are expecting to have a pretty good year.
WatchPro: There are three intersecting histories that lead us to the modern day Shreve, Crump & Low. There is the 220 year history of what is believed to be the oldest jeweler in the United States, there is the story of how your family began in the jewelry business, and then your acquisition of the venerable jeweler and its journey since then.
David Walker: That is true. I started my own business back in 1978 out of a small shop owned by my dad. We were at the gates of Wellesley College [30 miles east of downtown Boston]. He told me to get a real job because working for yourself is not all it’s cracked up to be. I took that as a challenge and started my business with $500.
Over the years I built a very loyal clientele who want to buy the best and I was specializing in very high end diamonds, estate jewelry and I always loved watches.
I grew that business from 1979 until 2006, which is when I had the opportunity to acquire Shreve, Crump & Low, and I went from eight employees to 98 employees.
It was not easy in the early years up to 2010 with the global financial crisis years, but I learned some very valuable lessons and a great deal about running a business in a crisis and that has held me in good stead for this years’ challenge. There are a lot of parallels between the global financial crisis and what we are facing now.
My business partner at the time, who I bought out in 2011, wanted to get out of the jewelry industry because it was so tough at that time. I was convinced it was a once in a one hundred year storm and we could ride it out so I made him an offer, he accepted, and I had control.
Once I had bought the whole company, it gave me the freedom to make my own decisions without having to consult with six other investors and our business has grown tenfold since that time. It also coincided with my children coming into the company. Brian does a great job running the Boston store and oversees our watches business and my other son Brad and daughter Olivia run our Greenwich, CT, store. We have had that store for eight years now.
I am sure you know a lot of the players in Greenwich, where you have Betteridge and Manfredi. It is a very competitive market, but Brian and Brad built our store there from scratch. We took the chance buy the building about five years ago, which we did because it is one of the great iconic buildings in the town.
We always got along with Terry Betteridge, [Manfredi owner] Roberto Chiappelloni, and other jewelers because my background was in the wholesale business, trading with all of these retailers, which we did for about 30 years. As we built Shreve, we gave up that wholesale side so we stopped exhibiting at trade fairs like Las Vegas and Miami Beach to focus solely on our retail business.
WatchPro: How does a company with eight employees acquire a business with 90 people, it is like a minnow swallowing a whale?
David Walker: It really was, and for the storm to then hit in 2007 when Lehman Brothers collapsed, it was a very difficult time. I did have the financial backing of a very strong partner and his associates. We had the Bank of America come to see us, they spent the whole day with my partners, they listened and valued their opinions, and that is what persuaded them not to gobble us up.
For seven years after I bought out these partners, I met them every year and gave them a report on the business and I would give them a percentage of the profits. They made more money when they weren’t actively involved in the day to day and they made a lot of their money back through this profit share over that time.
WatchPro: Tell me about the watch side of the business. What was the situation at Shreve, Crump & Low when you acquired it? Was it a major player in the watch market when you bought it?
David Walker: Yes, we carried Rolex and several of the other top brands. We were less diversified back then than we are today. We carry around 20 great brands today. We have always been an iconic destination store for luxury watches, fine jewelry and giftware.
WatchPro: You have made no secret of the fact that you would love Rolex back and Patek Philippe back; I assume I could add Audemars Piguet to that list?
David Walker: We actually had AP. We built it up into a very successful brand until François-Henry Bennahmias decided that he wanted to have all of the pie. I wish him all the best with that. There has been talk that an AP boutique will be opening in Boston, but we have not seen that yet.
Brian Walker: Sometimes we read AP is opening boutiques, and then we see an interview with François saying that stores are a thing of the past and that watches will not need physical retail anymore.
WatchPro: Did you choose to give up AP? What happened with Rolex and Patek Philippe?
Brian Walker: We were partners with AP for about a decade. They said to us that they value our friendship, but they had other friends that they would like to build a strategic partnership with. Sure enough, we came to learn that Rob Ronen and his partner Michael Herman at Material Good, which has a Richard Mille showroom in Boston, is looking to open an AP boutique, although plans may change because of covid. That will be interesting.
David Walker: AP told us they had a tremendous amount of respect for what we have done in the Boston market, but they had a shift in strategy. It is no secret that François is shaking up the way he does retail.
The big question in luxury watch retail today is the value brands and customers put on family-owned operations like Betteridge and Manfredi.
I think businesses like ours are as important as ever because we give customers the chance to come into our stores and see knowledgeable salespeople who can show them a wide selection of watches.
We will often start speaking to a client about an Omega and end up selling them a Lange & Sohne, IWC, Hublot or Panerai. We develop relationships with collectors who will not just buy watches from one brand, they want a variety of beautiful watches.
These guys love the experience of shopping at a place like Shreve, Crump & Low. That is what a modern watch customer will never get on the internet or at a monobrand boutique.
WatchPro: I absolutely agree with that, and in addition I would say that family businesses work with the same clients over many generations and know them better than executives in Geneva ever can. When you look at what AP is doing, they are trying to get as close as they can to the customer, but they get much of their customer information from crunching data rather than looking people in the eye and understanding them as human beings.
David Walker: Not only that, we might sell a customer an 8ct diamond, which we did only last week, and introduce that customer who could be wearing a Timex, to the world of fine watches. That is us creating a watch customer.
Brian Walker: We sold that customer a pre-owned Patek Philippe 5196J, which he absolutely loves and his wife loves her diamond.
WatchPro: How significant is the pre-owned watch business to you?
Brian Walker: We have been in the pre-owned business for some time, but it began strictly as a service to our clients about ten years ago and we had a small cabinet for them. Today we have a much larger offer and it has become a part of our business and our industry that cannot be ignored.
When you look at players like WatchBox, which are pure play specialists in pre-owned, it is showing retailers that this is a space they cannot ignore. Thankfully, we have ten years’ experience with trade-ins as a service to our customers who want to put the money from one watch, which they might have become tired of wearing, into another purchase. It is a big part of our business.
WatchPro: Relationships between retailers and watch brands has always been political and an ongoing dance to make sure they are happy with their placement, space, inventory, etc. How much has that changed in terms of the balance of power between watch brands and retailers over the past five to ten years?
Brian Walker: I deal with a number of brands for both our locations here in Boston and in Greenwich. I have not seen a paradigm shift in terms of those relationships. It comes down to mutual respect between us and the brands. Our stores belong to us, and in a good relationship there has to be give and take on both sides. If we are clear and communicative about what we can give and what we expect, the brands generally understand and will work within the envelope of what we have to offer.
David Walker: It is interesting. There are some brands that come in and push for a certain position or presentation. Brands like F.P. Journe — a terrific brand that we can’t keep in stock — does not need a huge space to be successful.
Brian Walker: That brand is on fire and we really value that. We have been supporting Journe for a number of years and it is a great example of where we pay them great respect and it is reciprocated. This year it has been even more difficult to get watches because of the effect lock down had on Journe’s production.
David Walker: Today, our watch business is growing at around 25-30% per year. We have worked with all of the major watch brands over the years and now we are starting to add some of the independents. Shreve, Crump and Low was the first door that Patek Philippe opened in the America and the same with Rolex. Patek Philippe is definitely a brand we would love to work with again.
WatchPro: Do you think Patek Philippe today would be influenced by that long history the brand has with Shreve, Crump & Low?
Brian Walker: I think the Sterns would value that. I think Thierry Stern would look at a company like Shreve and, while he might not know the Walker family, Patek looks to work with family-owned companies like ours that understand the local clientele in their markets.
WatchPro: Tell me about the Boston market. How much of a watch-loving city is it? How competitive is it at your end of the market?
Brian Walker: The Boston market has grown a tremendous amount, even in the past five to ten years. Boston has always been an important market for watch brands since the mid-twentieth century. At one point in the mid-1900s, Patek Philippe had 11 doors in the city.
But the industry is consolidating everywhere. Brands want to work with partners that show them maximum support. There is selective distribution so that retailers are rewarded with some level of exclusivity.
Boston has a couple of key players, although there are changes this year like Sidney Thomas closing its showroom in the Prudential Center. We do have Tourneau/Bucherer here and Watches of Switzerland opened up at the Encore Hotel [part of a Wynn casino development], which is a very interesting strategy of entering the Boston market thought the back door. I am not sure that will attract Boston consumers, because they are very loyal to the people that they work with for generations, and that is the sort of guild jeweler watch store we are.
WatchPro: Is Boston a place where tourists come to shop for luxury goods?
David Walker: There has always been a tourist element, but it is definitely not as big as places like New York, San Francisco, LA or Miami. We have an organic tourist base that might come here to visit for healthcare reasons or coming to the universities here. Harvard, MIT, Boston College and many others are a huge draw for international students and their families.
WatchPro: Tell me about the move into Greenwich. We know it is a great market for luxury just by looking at the brands with boutiques along the main street, but it is hugely competitive and most of the key brands have already been taken by Betteridge and Manfredi.
David Walker: We have a very long term approach. I may not be running the business forever, but my children will be. We bought the building there and, even with Manfredi and Betteridge, there are brands that are looking for a presence.
In that store we have built very large displays that Breitling, Piaget and Hublot have taken and we are patiently waiting for the next big opportunity to cross our door. Today, watch brands do not want two square feet. They want 20 feet by 20 feet and a window to the street. That is what we have built. The building was a bank that had very small windows, so we spent over $150,000 putting in large windows that open up the store to the street.
We are patient for the next big thing and we are already doing very well. My children live there and they have become part of the community. They have raised money for local charities. We have sponsored the Greenwich polo matches for years. And our business is not solely based on watches. We have tremendous jewelry too.
WatchPro: I interviewed Betteridge CEO Terry Betteridge in his store in March, and he was furious at how the super-rich are being hit with such high taxes in Greenwich that they are moving out. Is that your experience?
David Walker: I try not to talk about politics, but look at what is happening in California and New York City. People with money have options and if local governments do not recognize that, they are doomed to repeat the failures of the past. We are hoping Connecticut, which at one time had no taxes, is in a cycle and the wheel will turn again. High tax regimes really do put pressure on everybody.
Now we have to put up with covid, which has become politicized as well.
WatchPro: I am hearing from the likes of London Jewelers on Long Island and Manfred in Greenwich that these beautiful, open, affluent areas in range of New York City are benefiting from people moving out so that they can ride out the pandemic in large houses with gardens. Are you benefiting from that?
Brian Walker: That is definitely happening, at least for the short term. These suburban places have become safe havens. Even over the longer term, I know a number of people that live in downtown New York or Boston that are moving out. People want to live in safe communities, and that is what The Hamptons and Greenwich are. I read this morning that there are 15,000 apartments for rent right now in Manhattan. You used to have to read the obituaries to find a place to rent there.
I have spoken to a number of people who work at Manhattan jewelers and, unlike Boston where business has picked up since reopening at the beginning of June, New York still seems to be in a state of paralysis. That is terrifying because you can only have so many stop start periods before the economic machine breaks down forever.
WatchPro: You will have been following policy dictated at a federal and a state level. Has the situation been wildly different in Boston and Greenwich?
David Walker: We opened both stores within a week of each other. Both Connecticut and Massachusetts have followed one another and they have both been focused on reopening in tiered phases. In Boston we had four phases of reopening. Even in the first phase, when people were not allowed into stores, we could do curbside delivery, and in the second phase we could fully reopen.
In Connecticut the governor set it up so that you could only open if you followed certain rules like taking people’s temperature before they came into stores and having the proper sanitization in place for clients and staff. Those regulations have not been imposed in Boston, but we took those same procedures from our Greenwich store and applied them here. It was slow to start as stores reopened. Everybody had to wear masks and gloves in the early weeks.
WatchPro: The power of strongest brands appears to have been magnified through lock downs and since reopening. Most of the retailers I have spoken to, if they have Patek, Rolex and AP, have been taking orders for watches throughout lock down, often to people already on waiting lists, and either delivering them to homes or asking customers to come to stores as they reopen. Demand was barely affected. But away from that top tier of brands, things have been a whole lot tougher.
David Walker: We saw that on a smaller level with F.P. Journe. What I hear from Rolex ADs is that they did a really good job of delivering the most desirable steel sports watches this year, which is really wonderful from a brand because they are helping their partners in any way they can to get back on their feet.
WatchPro: Massachusetts and Connecticut were among the worst affected states when it comes to the number of cases and deaths per capita. Has that made things even tougher for you?
Brian Walker: It did early on. There was a lot of fear. We were closed for two months, which was devastating. Staff were all at home and our customers were all at home. Plus the stock market was very precarious at the beginning and the luxury market is very tightly aligned with that.
WatchPro: How did you feel in those very first few days of lock down? Like every business, I am sure you went through every line of your budget to see what costs could be cut and what assistance was on offer from the authorities.
David Walker: Since it is me that writes the checks, I certainly felt it. When Charlie Baker, governor of Massachusetts, came out and said we were going to have a two week lock down to “flatten the curve”, we knew that was going to be two months. We did furlough our 38 employees but we now have 95% of them back at work, which is much better than in June when we first reopened.
Brian Walker: We showed the benefit of being a family business this year because, throughout lock down, my father and I were in the store for a few days per week to facilitate client requests from the web or over the phone. Very good clients of Shreve wanted to keep buying from us throughout.
David Walker: At the same time we ripped down ceilings, which was about a $100,000 renovation that needed doing, and Brian was helping with all of that. It was like a bomb went off in the store, but we finished the job, repainted inside and outside and had it all looking brand new for when we reopened. We utilized the time wisely and did whatever needed to be done.
WatchPro: Did ecommerce sales compensate in any meaningful way during lock down? Some retailers have reported sales rising by 50% or more online.
Brian Walker: I would say we are in that area as well. Our average transaction values are lower online than in stores. A typical sale might be $2,000 online, but in store it is tens of thousands of dollars on average.
WatchPro: As we try to look beyond the pandemic and this year’s presidential election, are you optimistic about the holiday season and next year?
David Walker: I really expect it to be a good year. The people that love fine watches and jewelry are ready to get out of their houses and shop. They want to treat themselves to something special, and we are ready for them. We have a very positive attitude towards the rest of the year.