Maui Divers expands chain to Vegas

By Andrew Gomes
Advertiser Staff Writer

Maui Divers is going to Las Vegas, but not on a gamble. The Honolulu-based jewelry manufacturer and retailer tomorrow will open the first of two stores in Vegas as part of a bigger Mainland expansion plan.

Helga Wheeler, a saleswoman for Maui Divers, shows how Chris and Cindy Baker of Dumas, Texas, found twin pearls in a pick-a-pearl shell they opened at a company jewelry store in Honolulu. The company sees similar allure in Las Vegas. Deborah Booker • The Honolulu Advertiser

Robert Taylor, Maui Divers chief executive officer, wouldn't call it a sure bet — especially in Vegas and because he knows how fickle retailing can be — but he expects each new store to be profitable in 30 to 60 days.

"Let me put it this way," he said, "my board of directors expects that."

The Mainland expansion is envisioned to provide Maui Divers with as many as 25 stores in the next five years.

"It's almost unlimited — the opportunity on the Mainland in resort areas ... Southern California, Las Vegas, Florida ... " Taylor said.

The strategy will follow a similar one the company employed following the Asian financial crisis in 1997. Five years ago, Maui Divers had just three retail stores. In the past four years, it opened 20 more across the state.

Opening stores allowed the company to go from about 250 employees and $22 million in revenue in 1996, to 400 employees and $27 million in revenue last year.

The big push this year has been through fellow island retailer Hilo Hattie, which in February assigned its in-store jewelry concessions to Maui Divers, replacing a similar arrangement with another Hawai'i jewelry manufacturer and retailer, Sultan Co.

Paul deVille, Hilo Hattie president and chief executive officer, said the two companies share a similar customer as well as an extremely marketing-oriented corporate culture.

"We've partnered with a company with similar strengths, and it makes for a very, very powerful (relationship)," he said.

To date, Maui Divers has opened five stores all within Hilo Hattie, including one in California, the first Mainland store for the jeweler.

DeVille said that because of cross-promotion with Maui Divers, comparable sales for Hilo Hattie have been higher every month this year since February when the partnership began. "It's off to a good start," he said.

On the Mainland, Maui Divers' first Las Vegas store, a Maui Divers Jewelry at the Desert Passage shopping center in the Aladdin Resort and Casino, will be inside a Hilo Hattie.

The second Las Vegas location for Maui Divers, an upscale gallery concept, Island Pearls at the Fashion Show Mall to open in November, will stand alone.

Then it's on to Orlando, Fla., where the two retailers will team up to open in April. Taylor said he will consider operating a Maui Divers concept store in any new Mainland location planned by Hilo Hattie, which projects opening two to four stores a year.

Ed Sultan, president and chief executive officer of Sultan Co., which is twice as big as Maui Divers, said there is huge opportunity for selling Hawaiian-style fine jewelry on the Mainland.

Sultan first expanded to the Mainland in the 1980s, and has about half of the company's 61 retail stores there. For the past two years, he has been trying to establish a national brand of island lifestyle jewelry stores, Na Hoku, the most recent of which he opened last month in Denver.

"People are loving it," Sultan said. "People love Hawai'i. We see a lot more opportunity on the Mainland."

Sultan said his company is pretty much everywhere it wants to be locally, so further Hawai'i expansion isn't being pursued.

Taylor estimates there is room for a dozen more Maui Divers stores around the state. So far, the company has added retail stores by opening them in areas near ports frequented by cruise ships, and by expanding with multiple concepts that allow Maui Divers to open more than one store in a single mall or hotel.

For instance, the jeweler has Island Pearls and Maui Divers Jewelry at Whalers Village in Lahaina and Hilton Hawaiian Village in Waikiki. At International Market Place, the company has two Maui Divers Jewelry stores and its Pick-A-Pearl concept, which entices customers to buy cultured pearl oysters for $10, open them and mount the pearl(s) found inside on a ring, pendant or earrings.

"Every place where we've opened two stores we've more or less doubled the sales," Taylor said. "If you go to Whalers Village they have half a dozen jewelry stores. I'd just as soon have two of them be owned by us."

Combined sales from the small stores last year exceeded, for the first time, sales of the flagship Maui Divers design center and showroom.

Still, Taylor said, the design center between Makiki and Waikiki off Ke'eaumoku Street is the company's single most important asset, with more than 200,000 people a year passing through two spacious floors of jewelry displays and a skilled sales staff.

"I wasn't planning to buy anything," said Donalde Errie, a visitor from Brooklyn, N.Y., who toured the design center with her mother, Angele Faublas, last week. Helga Wheeler, manager of the Pick-A-Pearl department, talked Errie into buying a $10 pearl, then another.

After prying open the two oysters and finding three pearls (two white and one black), Wheeler rang up the $20 sale, unable to convince Faublas to mount the gems.

Minutes later, Errie gave in to the story of the maile leaf as told by Wheeler, and spent $265 to set the two white pearls on a 14 karat ring with the maile design. "I didn't want to spend any money," Errie said. "She's good."

Like Errie, about 85 percent of customers passing through Maui Divers stores are westbound travelers mostly from the Mainland.

Taylor said that in 1996, the figure was 50 percent, with the other half eastbound.

Taking Maui Divers to the Mainland, Taylor said, seemed like a good way to reach beyond the roughly 4 million to 4.5 million domestic travelers who visit Hawai'i each year. "We're travel retailers, that's what we do," he said.

Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.