London Jewelers has a simple business model: to treat its long island customers with such style, care and passion for the finest watch and jewelry brands in the world that they never feel the need to shop for their luxuries in Manhattan.
They come to us and no further, WatchPro was told on a visit to the group’s Manhasset flagship. It is easy to see why it works in the company of the Udell family headed by mark and candy, and ably supported by their children Randi and Scott and nephew Zach.
They were welcoming (candy baked a cake for our meeting), fascinating on every topic, and consummate politicians when the questioning veered anywhere near controversy. Rob Corder meets the Udells.
WatchPro: Take us back through the history of London Jewelers and indeed your family history.
Mark Udell: The business was started in 1926 by my grandfather Charles London. He was an apprentice in a clock and watchmaking shop in Glen Cove for three years before deciding to strike out on his own. He started by going around all of the estates of the Gold Coast on the North shore of Long Island, visiting around 15 wealthy families such as the Vanderbilts and the Pratts who made fortunes from banking, shipping, railroads and oil. He would go once a week and wind all of their 8-day clocks. These mansions might have had 50 rooms and more than 50 clocks to wind, so he was winding 750 clocks per week. There was always a clock or two that needed repairing, so he would bring them back to his workshop to fix them.
WatchPro: So it was not a retail business at all in those days?
Candy Udell: No, it was a service business, but clients would speak to Charles about watches, clocks and jewelry to get his advice on what to buy. They encouraged him to open his own shop, which is what he did.
Mark Udell: A little later on my mother Fran Udell, daughter of Charles London and wife of my father Mayer Udell, got involved. She was an amazing businesswoman who taught me so much; she was remarkable. She did the accounts, ran the business, took care of the customers and raised the family. She worked up until she was 95 years old. We could not keep her away until she passed away three years ago. My father was the same; he died at the age of 96 and was working up until six months before he passed.
WatchPro: I can only imagine the stories they must have been able to tell …
Candy Udell: Yes, they were incredible. Mayer came to America from Poland with $20 in his pocket right before World War II and before many members of his family were killed by the Nazis. He was set up on a blind date here, which is how he met Mark’s mother Fran. They got married very soon afterwards. He was in the business of manufacturing sweaters, but he sold that company and became a watchmaker in Fran’s father’s business.
WatchPro: What did the business look like in the post-war years? Because what we see today looks a very long way from a small family jeweler and watchmaker.
Mark Udell: It grew and improved. 99% of the time the business has just been getting better and better. There were dips during the depression and other tough times, but when I look back over the history of the business, it has been pretty much continuously growing. The most recent dip was 2008 to 2009, when the Bernie Madoff [Ponzi scheme] hit some of our customers who had invested with him, but we recovered quickly from it.
WatchPro: It amuses me when certain Swiss watchmakers speak about their 200 years’ of history and being founded in the 18th century, but you often discover that they have gone out of business several times over or been bought and sold over the years so that there is almost no connection to the past other than a name. London Jewelers is the opposite, you are directly descended from the founders and have owned and operated the business throughout its time.
Candy Udell: We are very proud of that history, and in many ways we do today exactly what our founders did at the beginning, which is to offer wonderful service to our customers, whether that is diamonds and jewelry or watches.
WatchPro: How did the business develop from a single mom and pop jeweler to the empire we see today?
Candy Udell: When Mark and I married in 1973 we had one store in Glen Cove run by us and Mark’s parents plus one helper. It was a tiny store of around 900 square feet but we moved into a larger store the year we got married and that is when we started taking on brands. Mark and I knew how important it was to have brands within our business so the very first thing we did was approach Rolex. Mark was calling Rolex every day incessantly trying to get them to come and visit the store. After two years they finally came.
WatchPro: Today the pursuit of brands and particularly Rolex seems so obvious, but in the 1970s that sort of thinking was ahead of its time. I am sure most jewelers at that time were focused on gold and diamonds, which is an unbranded business.
Candy Udell: We really understood the power of brands to drive our business, which is why we first went for Rolex and then, secondly, went for Cartier and then Patek Philippe. In our one little store we had these brands that attracted so many wealthy customers. From that point we started to advertise in the New York Times, and that is what transformed our business. We had people coming in from all over Long Island to our store.
Mark Udell: I remember the impact of Rolex. To give you an example from our first days with the brand: Rolex wanted us to stock a gold men’s Day Date among our selection, which at the time was $2,700, and I said to my father: ‘my God, how am I going to sell a piece like this’? We got the watches in on a Thursday morning and put them in the window. At 5pm that day, a doctor customer of ours was looking at the Rolexes in the window and he came in and asked to see the Day Date. He was just waiting for his Chinese takeaway to be ready in a restaurant next door to us but right there and then he said he was going to treat himself and he bought that watch. That was the first Rolex I ever sold, and the rest is history.
Candy Udell: We were in that store for about seven years before deciding to open a second shop in Wheatley Plaza [Greenvale, NY]. We decided to make that a fully branded store. It was London Jewelers, but all of the watches and jewelry within it were in branded displays. They had never done their own branded displays for other stores at that time, so we were the first retailer in the United States to come up with this concept.
By the time we opened our third store in 1984, here in [the Americana shopping center] Manhasset, we already had established relationships with the brands so we were able to bring them here. We opened in a much smaller space around the corner before we moved to the main front where we now have all the watches, jewelry and giftware brands in one store.
WatchPro: How big is your footprint here now?
Mark Udell: The store is around 16,000 square feet over the ground and first floor, but the basement [which houses watchmaking and jewelry workshops, storage and administration offices] is another 10,000 square feet, so we are probably over 25,000 square feet.
Candy Udell: We have everything a customer needs here. We have watchmakers and jewelers so we can design and make bespoke pieces. Besides jewelry and watches, we also have our own home and interiors store, which includes branded products. We have our own diamond brand, we have our own jewelry brand.
We also have a charity division, which is something I developed because I rescue dogs. I have rescued over 3,000 dogs so, to support my habit, I created a special line of jewelry that contributes money to rescue every time we sell a piece. The charity division also works with some of our best customers who are fundraising for their own good causes. We make special jewelry pieces for them that help them to raise money. That’s a nice way of giving back to the community.
WatchPro: How competitive is the jewelry and watch trade in this part of Long Island? It is an extremely wealthy area so I assume there are many businesses chasing the same customers.
Mark Udell: It is competitive, but we made the decision years ago to go after brands, and a lot of the competition stuck with generic jewelry. We did not want to go in that direction. They had to market what they were doing based on price, but we stuck to the best branded Italian and French jewelry and Swiss watches. We chose our course and they chose theirs and we won.
WatchPro: We could describe Manhasset as ten stores, but let’s call it one. What other locations do you have, and how does the empire fit together?
Mark Udell: We have a new store in Manhattan, downtown in the Oculus [Westfield World Trade Center]. We have one in East Hampton, another in Southampton, one in Wheatley Plaza and the original store in Glen Cove.
WatchPro: I assume you cannot get authorized by all of the brands you carry in each of those stores.
Candy Udell: No, each store is unique.
WatchPro: We hear even today that Swiss watch brands find the United States a difficult market to understand. Since you moved so early into working with brands, there must have been a process of you learning from each other.
Mark Udell: No question about it.
Candy Udell: We really did start the trend for working with brands in the way we do, which is why London Jewelers is considered a trendsetter within the industry. We are able to spot a trend and go with it. For example, Panerai: we had a customer who came to us wearing a Panerai watch. This was many years ago before Richemont bought Panerai, and he told us he had bought the watch in Italy because Sylvester Stallone was wearing one. At that time nobody had ever seen a watch like that before, but Mark got in touch with them in Italy and we flew over to meet Mr Panerai and we bought our first order of about 15 watches. They sold so quickly that we placed another order and that also sold out fast.
Mark Udell: We were then asked whether we wanted to become the distributor for Panerai in the United States, but I said no. At the time I did not know the quality of the movements, so I did not want to start recommending it to my friends before I had tested them for long enough. Six months after Panerai asked me to be its distributor, Richemont bought the brand.
WatchPro: Have you ever been a distributor as well as a retailer?
Candy Udell: No, we were busy building the London Jewelers brand, so we felt distribution would have taken too much investment and time.
WatchPro: How much of London Jewelers turnover today is from watches and how much is from jewelry and other products and services?
Mark Udell: Watches are around 40% of our business. People might think that the watch business would be a bigger percentage, but we have a lot of great jewelry brands also and we sell a lot of jewelry and a lot of diamonds. It is good not to have the ratio so out of line. A lot of independents are doing 70% of their business in watches; I think that is too high.
WatchPro: I assume you want to ensure that the London Jewelers name is always pre-eminent, rather than any single watch brand. How would you like London Jewelers as a brand to be perceived today?
Candy Udell: We would like to be perceived as a brand with integrity, quality, one that builds and appreciates great relationships and a place that brings together some of the world’s most famous brands under one roof.
WatchPro: Is the unbranded jewelry business way more profitable than working with brands?
Mark Udell: No, not anymore.
Scott Udell: The internet has educated people on the quality and pricing of diamonds. We have created our own bridal and jewelry brand called Two by London that aims to attract younger customers to London Jewelers, so that we start building a relationship with them. From there we become their expert advisor for all their future jewelry and watch needs.
WatchPro: The Two by London part of the boutique looks and feels like it is targeting a younger customer than the rest of the store, which I assume attracts an older demographic. Is that how it is set up to work?
Scott Udell: Exactly that. When I came into the business I saw an opportunity because friends my own age were not coming to the store, not even for engagement rings, because they were intimidated. I said to my parents, we have got to do something to change this, which is when we came up with the Two by London jewelry concept.
WatchPro: The United States had a tough time for luxury Swiss watches from 2016 to 2017, but 2018 appears to have been fantastically strong, if you look at export figures for Swiss watches. Has this been your experience?
Zach Udell: We have been a growing business for as long as I can remember. I came into the business around 16 years ago, and it has just been getting better and better. We have not been affected as much as some others by the ups and downs of the market because our reputation is so strong.
Mark Udell: There have been some dips, such as after the Madoff situation, but even then our clients could still buy anything they wanted. They just chose for around six months to buy less luxury.
Candy Udell: It was the same after 9/11. People did not want to be seen wearing too much luxury. Our customers do not really flaunt their wealth. A lot of them are true watch collectors and they really appreciate the fine work that goes into making these timepieces. They love watches in the same way that they love their cars and fine wine.
WatchPro: What are the key challenges and opportunities immediately in front of you in 2019?
Mark Udell: We are always looking to be better. We study the worldwide market and consider how to bring the best of what is happening around the world to our business. We have to react to what customers are coming in and asking for, so if there is a particular jewelry brand from France or Italy that seems to be buzzing, then we adjust to it. If there is a Swiss watch brand becoming strong, we adjust to that. We also constantly invest in our buildings, facilities, people and systems.
Candy Udell: This is where our children and the younger generation come in. They have taught Mark and I to be more forward-thinking and to keep up with the fast-changing pace of the world today.
WatchPro: You clearly have incredible gut instincts for what works and wonderful personal relationships that have served you well for decades, but a new breed of retailers is going to come after you with incredibly sophisticated systems backed by Big Data that can identify and tailor their offerings to individuals they might never have met, just based on their browsing history, for example. Do you keep pace with this sort of technological change, or do you feel your gut instinct and relationships are a match for the new breed?
Zach Udell: For me success is the balance of the two. We need to take our personal relationships and put data on top of it so that we know exactly what a customer has and what he aspires to buy. The next time that customer comes in, not only do we know his name, the names of his kids and what his wife likes, but also what he is likely to want from us. That is the richest form of knowledge that makes us more than just salespeople.
WatchPro: Without suggesting that you are replacing one with the other, are you using more digital and data tools today than ever before?
Zach Udell: Of course, we have our own systems and CRM modules. Last year I worked on a project that defined 18 different customer personas of ours so that we understand what type of customers they are, and what they are likely to want. It is not picture perfect, but it helps us understand how to market to certain customers, which events to invite them to, and how to develop relationships in the best possible way.
Around here, with the clients we have, they have access to the best of everything, so our job is to understand what we can offer them that money cannot buy.
Scott Udell: Some of this work we are doing with our customer relationship management is just starting right now, and that gets us so excited about where it can take us. We are already at an incredible level, but we can see there are opportunities to go to a whole new level because most of what we can do is still to be implemented once we get into the real meat of the data. Over the next five years, the growth we can achieve just by effectively utilizing that data is massive.
WatchPro: How significant is ecommerce to the business?
Mark Udell: I want to say it is incredibly important. We can see how fast retail is changing, and for the sake of our own agility, we need to be ready and capable of moving into ecommerce when it takes off. In the watch business, because of how restricted we are with the brands, there is not such a huge opportunity right now. It is more important for our pre-owned business and also for us to learn more about what our customers are looking for and putting into their shopping baskets when they log in with their own user names. We aspire to growing our ecommerce business, it is just a question of how quickly it will develop.
WatchPro: I know you are also an early partner and investor with Troverie. Is that a learning exercise for you, or do you expect it to deliver results?
Mark Udell: For us, that is like going to class, it is like being part of a live case study that we can learn from every day.
WatchPro: Troverie’s team wakes up every morning thinking about how they succeed at ecommerce, which is a distinct mindset from a team steeped in bricks and mortar retail.
Mark Udell: Rather than watch from the sidelines, we feel it is best to be part of that and watch the ebbs and flows; see what works and what does not work, and then take those lessons and work out ways to apply them to our business. Beyond Troverie as a concept, we as a family are also big believers in Fred [Levin], who put it together. We can debate whether we believe in every aspect of the Troverie business model, but we can all say that we believe in Fred. He is a special guy, an amazing guy. Sometimes in life and in business you buy into something because of who the people are. If anybody can pull it off in this country, Fred will be the one.
WatchPro: It is clear from this conversation that you believe passionately in working in partnership with the brands you sell. But we are seeing the way these global brands work with their retail partners change, and not all the changes are welcomed by retailers that have been loyal for decades. How would you describe what you are seeing in terms of the way brands work with their retail partners and directly with consumers?
Mark Udell: We have been fortunate to have amazing relationships with the brands. We respect and protect their image and what they are trying to present. There are some brands wanting to do it on their own. I do not believe in that 100% because in my marketplace there is nobody that can do it better than us — nobody!
The family has been in this marketplace for almost 100 years. We know everybody; we are involved in the community, with charities, we give back to the community. You cannot develop that overnight. It takes generations to create, and we are so well-respected in the community; they are so grateful for us doing what we do.
WatchPro: You do not have to convince me that multi-generation families in the retail business are incredibly valuable and important to the watch industry, and yet we all know that the big brands and major groups are looking at closing doors, working with fewer multibrands, opening monobrands and selling direct to consumers via ecommerce. You might say that some retailers have not done as great a job as London Jewelers, but I am not sure it is just under-performing partners being cut, there is an ideological march towards selling direct and owning the customer from some brands.
Mark Udell: Yes, but it is our job to convince any brand that is thinking of going that route that it is a mistake. No matter how good a brand is, we dominate the market in a very positive way and it is impossible for a brand coming in on their own to do it better.
Candy Udell: There are top tier brands that could succeed by selling direct, but these are the ones that most appreciate the way we and others work with them. They understand that we are the people that built their businesses for them in the first place.
Mark Udell: Rolex does not have its own stores and Patek Philippe has only a handful. Neither do ecommerce. They choose to work with the best retailers around the world. They take their responsibility and relationships with partners like us extremely seriously. They protect us and make sure they keep us going in a positive way because they know that a lot of good independents depend on them. They are really good about that. These are beautiful relationships. We have their trust and we share their values. We also have an amazing relationship with Richemont because of all of their brands that we carry. Cartier and Van Cleef & Arpels are incredibly important to us, along with other Richemont brands including IWC, Jaeger-LeCoultre and Panerai.
Candy Udell: Cartier is wonderful. We have the brand in several locations and we have a fantastic relationship.
WatchPro: I hope that the current polarized debate between selling through wholesale and selling direct is an over-simplification and also that it is not a one-way street that ends up with all brands cutting all retail partners that do not open monobrand boutiques. I want the conversations to be open, and for the brands and groups to make sure they recognize and appreciate what is working already.
Mark Udell: They do need to be careful that they don’t burn all their bridges.
Candy Udell: You should take care of everybody on their way up because you never know when you are going to need them on the way down. When you are at the top, you have to be considerate because things can change.
WatchPro: I think that the current conversation around Audemars Piguet is an interesting case study. CEO Francois Bennahmias has said he wants every one of his watches to be sold from under an AP roof within 3-5 years, yet at the same time he has said he is open to different partnerships that deliver on that strategy without cutting out successful and loyal partners like London Jewelers.
Mark Udell: Yes, Francois is a brilliant, smart person. I have known him for a long time. When he first came to America we were introduced to each other and he would not let me put in AP at the time because he did not feel the brand was ready. He wanted it to have more momentum before opening with us and asked for a little time to build it up. That is what he did. He came back two years later and said he was ready, so we put it in. He is a genius. He proved that by bringing America back to life for AP and then going back to Switzerland as CEO. He took the company’s turnover from $500 million to over $1 billion in only four years.
WatchPro: London Jewelers is a multibrand retailer, so could be in danger of losing Audemars Piguet. Do you have a plan to keep it?
Mark Udell: Hopefully my plans with AP will be something positive.
WatchPro: Looking a little further out into the future, what do you think the business will be doing in 20-30 years’ time under the stewardship of a new generation?
Mark Udell: We definitely have plans to expand and we do have some things up our sleeves.
WatchPro: Does that mean growth within your existing locations or will there also be additional stores?
Mark Udell: A little of both.
WatchPro: Your body language suggests your expansion is likely to be much more immediate.
Candy Udell: We don’t stand still for long.
Mark Udell: Whatever we do has to be very intelligent and very well thought out. One thing I would never do is create a new business if I have to go up against somebody else in a marketplace that is already strong.
WatchPro: Is that because you feel you would need to be too aggressive to grab a market?
Mark Udell: Yes, I have seen too many people do that. They go in and hurt other people that have been doing a great job for a long time. That is not what we do.
WatchPro: On the other hand, there are plenty of struggling jewelers in the United States that would welcome your help.
Mark Udell: Yes, I look for opportunities where I can be really successful. We have a really good thing going and I am not looking to gamble.
WatchPro: How has your marketing mix changed over recent years? Have you embraced new media such as Instagram?
Randi Udell-Alper: We have gone from almost zero social media to it being a really important part of our marketing mix and a vital way of keeping in touch with our customers. We use Instagram to show customers what we love as we travel the world on buying trips to events and exhibitions were we are shown new products and when we fall in love with something in stores. We do a lot of traveling for work and vacations so we are always experiencing new and exciting things to show our customers.
WatchPro: It sounds like your Instagram is a mix of the glamorous lifestyle that is so popular on social media and a promotional vehicle for what your customers can come in and buy.
Randi Udell-Alper: It is like that, and I think that is why it is so popular [the London Jewelers Instagram account has almost 82,000 followers]. I am heavily involved in the buying side of our jewelry business and in designing our own jewelry lines, and showing this on Instagram makes a massive impact. We have customers that store pictures they see on Instagram and come into our stores to try on the jewelry and watches and buy them.
WatchPro: Do you measure your success on social media against other jewelers operating in a similar market to London Jewelers?
Randi Udell-Alper: We measure everything we do from a marketing perspective. We do so much more than before. We still do all types of a marketing, promotions and events. Everything new that comes along like Instagram we do in addition to our other activities. We always aim to be first and best at everything we do.