Independents

On Data: A 5-Point Reopening Checklist

IndependentsApr 28, 2020

On Data: A 5-Point Reopening Checklist

Jewelers need to re-evaluate their sales forecasts, their inventory and their employees, writes Sherry Smith in this special edition of On Data.

sherry-smith.jpg
Sherry Smith is director of business development for data and consulting company The Edge Retail Academy. She can be reached at sherry@edgeretailacademy.com.
States are beginning to develop and roll out reopening plans, with some states collaborating on a coordinated, regional approach.

The reopenings are happening sooner than we anticipated, but you still have time to complete your preparation and planning for the post-coronavirus world.

When the future is uncertain, creating multiple forecasts helps us prepare for different possibilities.

Planning and forecasting can play a major role in driving your success or failure, and nothing will bring you more peace of mind than reopening with a well-thought-out and detailed plan.

While there are many things you still feel you need or may want to do, the following items should be checked off your list prior to reopening.

1. Sales Projections
It will be incredibly difficult to predict what post-COVID-19 business will look like as none of us have been here before, but this doesn’t mean you shouldn’t complete your sales projections.

Although a sales projection is basically an educated guess, it does set the standard for your expenses, profits and growth.

You should aim to have three sales forecasts completed: a conservative, a moderate and an aggressive one, and you should absolutely factor in your data.

Your aggressive sales plan should be the remainder of your 2020 forecast from when you reopen. While this was created prior to the pandemic, this represents our aspirational goal of fully returning to pre-coronavirus business.

Your conservative and moderate sales plans should factor in the many potential variables you will be facing, such as fewer number of employees, your area’s potentially restricted schedules (days and/or hours, number of people allowed in the store, etc.), and a decreased marketing spend.

A hypothetical conservative sales plan might be 30 to 40 percent of your aggressive or original 2020 sales plan, and your moderate forecast might fall between 50 to 70 percent of your original sales plan for 2020.

2. Cash Flow Worksheet
One of the most important things you can do for your business right now is to create a financial budget.

Budgeting, in its simplest terms, is an outline of expectations for what a business wants to achieve for a particular period of time and, as we stated above, it represents your financial position, cash flow and goals.

While budgets generally forecast an entire year, yours should focus on the remainder of 2020.

Budgets afford you the luxury of tweaking as necessary and that’s precisely what you will need post-COVID-19.

Create three cash flow plans that tie directly to your conservative, moderate and aggressive sales plans. 
Factor in your fixed costs as well as your variable costs.

Your revenue is made up of two components: your cost of goods sold and your gross profit. In theory, your cost of goods sold would cover your vendor payables and your gross profit should cover your operating costs.

If your sales plans (based on your gross margin) do not cover your operating costs, then you will need to look at either cutting some of the variable costs at least in the interim, or increasing your revenues or, preferably, both.

3. Savings
Hopefully, you’re a retailer who already saves a percentage of her or his revenue, but if you’re not, you must make this part of your business model moving forward.

Open a separate business account and determine the percentage you will start saving. I highly recommend 5 percent, but if you truly believe you cannot do that, start with 2 percent or 3 percent and work your way up to 5 percent, gradually ramping up to 10 percent.

The key is to start, and now is the perfect time. There are many benefits to having a business savings account, including being prepared for emergencies, budgeting for periodic expenses, and saving for future business projects.

4. Inventory Management 
Currently, there is a lot of advice out there when it comes to inventory management after COVID-19.
 
Simply put, one size does not fit all. Having said that, never has it been more important for a retailer to follow best practices when it comes to managing her or his inventory.

Start with performing a vendor analysis as well as a category analysis prior to reopening. 

This exercise typically shows that approximately 80 percent of your gross profit dollars are coming from as few as 10 to 15 vendors.

You’ll get the highest return on your efforts by starting with your top-performing vendors and categories.

Based on your findings, you should plan on remerchandising your store, not only to give your store a fresh look, but also to better align your top performers with your prime real estate.

One of your goals should be to work toward your optimum inventory level. Retailers can’t afford to have their working capital tied up in their inventory. 

Imagine if you had that several hundred thousand dollars (or more) as cash in the bank going into this pandemic instead of having it tied up in non-performing product in your store. This crisis would be a lot less stressful for you. 

When it comes to inventory, there are four areas to focus on and plan around.
 
  1. Fast-sellers. Commit to replenishing your fast-sellers. This is the very product driving revenue and creating cash flow.
  2. Memo. If memo is currently a successful part of your business model, then do not just blindly send it all back. You could find yourself starving your top-performing categories and vendors. Instead, do an analysis. Make sure your memo doesn’t compete with your assets, and never have aged memo except for the pieces generating orders.
  3. Aged. Given that cash flow is king, have a plan of action in place to aggressively target your aged inventory. Plan a clearance sale for your non-performing product. Your goal should be to recoup as much of your investment as possible and as quickly as possible. You should have a list of strategies ready to go for both reopening and ongoing management of aged inventory.
  4. Have conversations with your vendors. Collaborate on a preliminary sales plan and inventory goal for the remainder of 2020 you both feel comfortable working toward under these current circumstances.

5. Talent Management 
Our people are our biggest asset as well as our biggest liability, and there is no better time to evaluate your team than right now. 

When you reopen, you cannot afford to reopen with anything less than a really strong team, and that means having the right people in the right roles. This applies to both front and back of house. 

RELATED CONTENT: What Will Retail Look Like After COVID-19?
 It is imperative you have salespeople with the correct wiring. These are the very performers who will give your business the best chance of fulfilling your customers’ needs and wants by closing the deal, thus driving revenue and creating cash flow.

If you have a sales team member who is dependable, reliable and has a great work ethic but simply cannot close a sale, consider shifting them to a different role, but only if it’s the right fit and is beneficial to your organization.

If you’ve done all these things and they’re still not a fit, you’re not doing your business or that employee any favors by keeping her or him.

Wrap-Up
To recap, while there are many things you could be working on, you should focus on completing this five-point checklist prior to reopening.

1. Create your sales plans.
2. Create your cash flow plans.
3. Open a business savings account.
4. Perform a vendor and category analysis and draft a remerchandising plan.
5. Evaluate and assess your team.

Do the work now. Tackle one item per day and you can complete your to-do list in as little as five business days.

Having your completed plan and contingency plans will help you reopen in the strongest position possible.

And, stay positive and continue to focus on the controllable.

I wholeheartedly admit I’m an optimist or, at the very least, a pragmatist. Therefore, I believe there are many people like myself—anxious to dine out, see a movie, frequent my favorite brick-and-mortar stores and, first and foremost, book an appointment at my local hair salon.

I leave you with this from quote from “Reengineering Retail” by Doug Stephens: “In a world where almost every aspect of our lives has been somehow digitized, experiences that engage our bodies, our senses and our souls are at a premium.” 
Sherry Smithis director of business development at Edge Retail Academy, the leading jewelry business consulting and data aggregation firm.

The Latest

Sylvie Jewelry Auranova Collection Campaign Imagery
CollectionsApr 25, 2025
Sylvie Looks to Water in New Sculptural Bridal Collection

“Shell Auranova” is the next generation of the brand’s bridal line, featuring half-bezel engagement rings with bold and fluid designs.

Pomellato Nudo toi et moi ring
FinancialsApr 25, 2025
Kering’s Jewelry Brands Persevere as Q1 Sales Sink 14%

Boucheron and Pomellato performed well in an otherwise bleak quarter for Kering amid struggles at Gucci.

Deborah Meyers Experience The Birds Earrings
EditorsApr 25, 2025
Piece of the Week: Deborah Meyers Experience’s ‘The Birds’ Earrings

Designer Deborah Meyers created her birds from oxidized sterling silver, rose-cut diamond eyes, and Akoya Keshi pearl feathers.

ejap cohort 1872x1052.png
Brought to you by
Emerging Jewelers Accelerator Program Announces Second Cohort of Aspiring Jewelry Entrepreneurs

Six new retail businesses were selected for the 2025 program, which began in January.

Melee diamonds from De Beers
SourcingApr 25, 2025
De Beers Sales, Production Fall in Q1 Amid Uncertainty

The company said it expects sightholders to remain “cautious” with their purchasing due to all the unknowns around the U.S. tariffs.

Weekly QuizApr 24, 2025
This Week’s Quiz
Test your jewelry news knowledge by answering these questions.
Take the Quiz
LIM-401 2024 National Jeweler Supplier Bulletin- iD100 Web and Eblast FINAL (1).jpg
Supplier BulletinApr 24, 2025
Protect Your Customers and Your Business

Sponsored by the Gemological Institute of America

Wolf CEO Simon Wolf
EditorsApr 24, 2025
Q&A: Wolf’s CEO Talks U.S. Expansion

Simon Wolf shares why the time was right to open a new office here, what he looks for in a retail partner, and why he loves U.S. consumers.

gia1d100 btyb.jpg
Brought to you by
Protect Your Customers and Your Business

The risk of laboratory-grown diamonds being falsely presented as natural diamonds presents a very significant danger to consumer trust.

Charles & Colvard moissanite ring
FinancialsApr 24, 2025
Charles & Colvard Delisted From Nasdaq Due to Noncompliance

The company failed to file its quarterly reports in a timely manner.

Young Diamantaires
SourcingApr 24, 2025
Young Diamantaires Transition to Nonprofit

The organization also announced its board of directors.

Mined + Found "Hope" Matchbox Locket
TrendsApr 24, 2025
Amanda’s Style File: So Charming

Charms may be tiny but with their small size comes endless layering possibilities, from bracelets to necklaces and earrings.

Bulgari’s expanded factory in Valenza, Italy
MajorsApr 23, 2025
Bulgari Doubles Size of Jewelry Factory in Italy

Located in Valenza, the now 355,000-square-foot facility includes a new jewelry school that’s open to the public, Scuola Bulgari.

Jason McNary accepting FGI Fine Jewelry Rising Star award for Paola Sasplugas
Events & AwardsApr 23, 2025
PDPaola Creative Director Wins FGI’s ‘Rising Star’ Award

Paola Sasplugas, co-founder of the Barcelona-based jewelry brand, received the Fine Jewelry Award.

1999 Cosmograph Daytona, Ref.16516
AuctionsApr 23, 2025
Rare Custom Rolex Daytona Heads to Auction

A platinum Zenith-powered Daytona commissioned in the late ‘90s will headline Sotheby’s Important Watches sale in Geneva next month.

Carmelo Anthony and Jaylen Brown David Yurman campaign
MajorsApr 23, 2025
David Yurman’s New Campaign Stars Carmelo Anthony, Jaylen Brown

The basketball stars wear men’s jewelry from the “Curb Chain” collection.

Woman wearing Zales jewelry
MajorsApr 22, 2025
Zales’ Rebrand Takes Playful Approach to Fine Jewelry

The Signet Jewelers-owned retailer wants to encourage younger shoppers to wear fine jewelry every day, not just on special occasions.

JAR Apricot Blossom bracelet
AuctionsApr 22, 2025
Christie’s to Auction JAR Jewelry Collection

The 21 pieces, all from a private collector, will be offered at its Magnificent Jewels auction next month.

National Jeweler columnist Lilian Raji
ColumnistsApr 22, 2025
The PR Adviser: Building Buzz Through Word of Mouth

Lilian Raji answers a question from a reader who is looking to grow her jewelry business but has a limited marketing budget.

Avi Levy
GradingApr 22, 2025
Avi Levy Is GCAL By Sarine’s New Chief Growth Officer

GCAL by Sarine created the new role to sharpen the company’s focus on strategic partnerships and scalable expansion.

Cartier Exhibition Installation at Victoria & Albert Museum
Events & AwardsApr 21, 2025
An Exhibition Exploring the History of Cartier Is Now on Display

“Cartier: Design, Craft, and Legacy” opened earlier this month at the Victoria and Albert Museum in London.

Bill and Birdie Levine of Van Cott Jewelers
IndependentsApr 21, 2025
New York Jeweler to Close After 111 Years

Van Cott Jewelers in Vestal, New York, is hosting a going-out-of-business sale.

IJO Director Samantha Larson
IndependentsApr 21, 2025
IJO Names New Director of Vendor Relations, Merchandise Strategy

Industry veteran Samantha Larson has held leadership roles at Borsheims, McTeigue & McClelland, Stuller, and Long’s Jewelers.

Events & AwardsApr 21, 2025
Jewelers of Louisiana, Mississippi Jewelers Association to Co-Host Convention

The two organizations will hold the educational event together this fall in Mississippi.

Daymond John
Events & AwardsApr 18, 2025
Daymond John to Give Keynote at JCK Las Vegas

The entrepreneur and “Shark Tank” star will share his top tips for success.

Dukachi Easter Bread Pendant
CollectionsApr 18, 2025
Piece of the Week: Dukachi’s ‘Easter Bread’ Pendant

The Ukrainian brand’s new pendant is modeled after a traditional paska, a pastry often baked for Easter in Eastern European cultures.

Bremer Jewelry
IndependentsApr 18, 2025
Bremer Jewelry to Reveal Renovated Store

The jeweler has announced a grand reopening for its recently remodeled location in Peoria, Illinois.

Tiffany & Co. Strong Like Mom campaign
MajorsApr 18, 2025
Tiffany & Co. Employees Star in Mother’s Day Campaign

The “Strong Like Mom” campaign features moms who work at Tiffany & Co. and their children.

×

This site uses cookies to give you the best online experience. By continuing to use & browse this site, we assume you agree to our Privacy Policy