Fall 2011 Beads You Can Bank On

Company Highlights|Cacho's Tips for Specialty Retail Success

Business:Limited partnership

Partners:Fernando Cacho, Sandra Frayssinet

Number of people at corporate headquarters: 10

Number of company locations:19—16 carts, 3 stores (25 carts, 7 with Brissys products)

Number of locations with owner-operators:60

Number of locations expected for holiday 2011:400

Core Market:Women, ages 16-60

Mission Statement:To provide the best product with the best mark-up in the market.

Company Philosophy:To supply retailers with top quality, trend setting products, and support their growth and success with these products.

Strength of this concept: Brissys's growth has only just begun.

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Choose a shopping center with steady traffic

Choose a product that already works in another shopping center. Don't try to come up with a product that you think will do well, but it hasn't been tested yet

Make sure your mark-up is good

Make sure your supplier has enough product for you

It is better to pay a little more for better quality

Talk to other tenants to compare opinions and get more information

Have good relations with mall managements.

They’re fun and easy and best of all for specialty retailers, a great impulse buy. Find out how Brissys is bringing
DIY bead jewelry to the common area and fast becoming the next bead thing.

In case you haven’t noticed—and it’s hard not to—personalized bead bracelets are all the rage in North America. Fernando Cacho, CEO of Brissys in Las Vegas, NV, and the many specialty retailers in his wake, are cashing in on today’s latest craze.

Starting with beads of all kinds, beads that celebrate milestones, reflect personalities and add bling in every color imaginable, customers buy one after another, assembling unique bracelets in one-of-a-kind designs. Finished products thus become a vibrant reflection of the creators themselves.

While Brissys is revolutionary in bringing this concept to the common area, Cacho is quick to credit companies like Pandora, that first brought it to the mainstream. Pandora, designer and manufacturer of jewelry in Copenhagen, Denmark, sells their products through 10,000 points of sale in 55 different countries today. “They do a lot of advertising and people like them,” says Cacho.

But the key difference that sets Brissys and Pandora apart, and an absolutely vital one when retailing in the common area, is that of price point. What might cost $45-$160-$270 for a bead at Pandora translates to an average of $7 at Brissys’s, or rather, a perfect impulse price point for shoppers cruising through the common area.

According to pricing website, fashion.whatitcosts.com, the ballpark figure for a basic design Pandora bracelet is $175, going as high as $3,000 for a 14k gold and Murano glass design. Brissys’s beads retail between $3.99-$9.99, even a filled bracelet averages a retail under $100 (depending upon the retailer and how their beads are priced). This economy is achieved because Brissys’s beads are silver and gold plated, while Pandora’s are solid gold and silver, says Cacho—but to the average consumer, they look the same. Cacho encourages retailers in upscale centers to place a higher price tag on beads than those in B and C shopping centers.

Ahead of his time

“We were the first ones to introduce these beads to the mall,” says Cacho, referring to himself and business partner/wife, Sandra Frayssinet. With this particular trend, Cacho was ahead of his time. He had to sit on what he knew was about to take specialty retailers by storm for six months before he introduced it to the marketplace. “We started this one early. A year and a half ago, we tested it and it was OK, but not that big, so we waited. We tested it again last year and it was hot. At the SPREE show, we sold out of all of our merchandise,” he says.

After the second successful test, they made the decision to wholesale, although they are still in the retail game with seven company-owned carts, all in Las Vegas, housing the Brissys product.

Brissys not only brings an extensive array of designs and an impulse price point to the market to create a viable trend, they also deliver years of learning experience in retail. Since starting with silver jewelry in Florida eighteen years ago, Cacho and Frayssinet have sold sunglasses, Chop Chop, toys, Dead Sea products, Smash Balls (they still wholesale these), wind spinners, Pillow Pets, cellular accessories, butterfly clips and more. This strong and steady base of successful products provides evidence that Cacho has capitalized on growing trends time and time again.

Cacho always makes sure to test new products on a cart or kiosk. Once the test is passed, he can take a product from concept to the retail floor pretty quickly. He has been in the specialty retail business for eighteen years, thus his specialty is seeing the next best thing before it is the next best thing. “What we do is find the new product,” says Cacho. This translates to a lot of traveling and visiting shopping malls across the country. “We are always flying, always testing. Let’s say tomorrow, there is another fashion. I’m pretty sure I’ll be in it,” he says.

“The products we sell have timing. They keep going, keep going and then once you see them in every mall, they start going down,” says Cacho. Where is Brissys on this growth curve? “The product is already popular. Every single product has its cycle life, some of them last more than others, but either way, this product is just starting and there is a long way to go,” he says, ultimately estimating beads as a hot trend for at least 2-3 more years.

Today, Brissys products are manufactured overseas, branded and sold through over sixty retailers from California to Puerto Rico. “We’re expecting this number to be around 400 by the end of the year,” says Cacho.

Personalized, affordable keepsakes

People want to go to the mall and buy things to feel good, says Cacho, but in this economy that is not always easy. So if shoppers see beads similar to more expensive brands for ten times less, it makes them feel good, Cacho says. “They buy it and feel good. And once they buy for themselves, we usually ask, ‘Do you have any friends or sisters?’ and they buy for them, too,” says Cacho.

Because the price point is so economical, customers don’t buy just one bead, they buy an entire bracelet. In fact, if they buy more than eight beads, the bracelet is free. The average Brissys’s sale is $45. If a customer “goes crazy” and they want to fill up their bracelet (most bracelets aren’t fully bead packed), they might even buy 22-23 beads at one time, and the sale totals over $100, says Cacho. Most customers, however, want to leave space for future keepsakes and they still have an attractive bracelet with only eight beads.

Brissys’s beads not only fit Brissys’s bracelets, they fit Pandora and Chamilia (another bead manufacturer and marketer based in Minneapolis, MN), as well. “That’s the beauty of it. Most people have only 3-4 beads on their [Pandora] bracelet because they are so expensive, and they can then add on much more easily with Brissys’s beads,” says Cacho.

There are 1,200 different styles of beads and growing, says Cacho. Every hobby, every trinket, every souvenir, every occasion, dogs, trains, dragonflies, stick figure families, skulls, footballs, words, such as “mother,” “son,” and “I love you,” you name it, can be found in the extensive collection. Each area of the country has its own bestsellers. For instance, dolphins are popular in Florida, dice in Las Vegas.

Many customers design bracelets around a color. Retailers do best in learning what designs go well with others, based on color, to direct customers to nearby trays at a moment’s notice. This know-how generally takes retailers three days to master, says Cacho.

Retailers also display a number of pre-made bracelets on their unit to inspire customers. It’s best to make samples completely bead-filled to encourage higher sales, says Cacho. Sometimes the customers buy the samples as well.

Buying a Brissys’s bracelet, in fact, turns into an adult version of Build-A-Bear. It’s an experience, as well as a keepsake. Customers personalize their bracelets to best reflect their own individuality. Las Vegas-retailer Dennis Chavez entered the specialty retail market for the first time with the Brissys product. He started with “Las Vegas Gift” September 2010. Business was so good, he opened “EURO BEADS” this past spring. “We have people on every side of the cart,” he says. Customers are attracted to the idea they can make their own jewelry, he notes. And he promotes this idea to passersby with signs that read, “Make Your Own Style.”

“It’s not like going to a store and buying a bracelet. They go over to the cart, start picking pieces, start building it, it’s fun,” Chavez says. “People might spend $10 or $300 in one day.”

Just bead it!

Brissys’s beads come in a variety of materials: metal, glass, stone, gold-plated and enamel. “Stones are number one because they shine,” says Cacho. Enamels are a close second.

There are also metal dangles, stoppers, a design-free, metal device to hold beads onto bracelets (free-of-charge) and lockers, which have the same function as stoppers but resemble beads. There are spacers to put between beads if customers prefer two beads to be separate. Beads, charms and spacers simply slide onto the bracelet, making the assembly just that easy.

Brissys offers earrings and necklaces too, although bracelets are where the volume of sales happen. If customers buy ten beads, necklaces are free. Frayssinet says necklaces make up approximately 8% of the sales and earrings, which are just in, are expected to generate a similar amount.

In addition to deals for free bracelets and necklaces, retailers can set their own deals, but it is best to have customers reach a price point in the vicinity of fifty dollars, before a free bead or two can complement the sale, says Cacho.

Encouraging repeat buys isn’t very hard either. Once a bracelet is started, customers want to add beads for various occasions and memories. Picking up beads to fill a friend’s bracelet also becomes the perfect gift. “Repeat buyers are the norm,” says Cacho.

The retail package

For retailers launching a cart, Cacho suggests selling Brissys products alone. But Brissys can also work well with other cart merchandise. Cacho reports that for the Brissys’s retailers currently working this model, Brissys products generate approximately forty percent of their sales.

Brissys products do not require aggressively pursuing customers. “Unlike demonstration products, the sale is pretty easy,” says Cacho. “You find out what people like, dogs, for example, and then you show it to them,” he says.

Retailers will also enjoy the mark-up. Beads cost the retailer between 35 to 95 cents each. “If you’re going to sell them for $9.99, that’s more than ten times the mark-up. Up to 1,000% profit,” says Cacho.

Start-up cart programs cost retailers a total of $3,500. This price includes beads (of all kinds), eight different sizes of bracelets, from little girls to adults, and four sizes of necklaces. By number, retailers receive 4,500 beads, 280 bracelets, 90 necklaces, 50 locks, 600 stoppers, 5 displays and 7 signs.

There are two designs of custom-made trays, squares and rectangles, that can be mixed and matched to fit most any cart. Trays are elevated so customers can see the merchandise when walking by. Each square in the tray holds 10-20 beads. Retailers can showcase approximately 800 designs on a retail merchandising unit.

What do retailers make in return? Company owned carts in Vegas pull in between $25,000-$35,000 a month, says Cacho. “A cart [carrying Brissys products] should sell more than $20,000.”

In addition to retail merchandising units in the common area, beads are a great impulse item in stores, as well, notes Cacho, especially at the counter. There are counter top displays available for inline retailers.

Having a great product such as this is the first step to success, says Cacho. Retailers must also have a good location, good employees, a training program, and eye-catching visuals to reach true success in the common area.

Success is in fact, what drew Cacho to the common area eighteen years ago. It was a friend’s success that peaked his interest. “I had a friend working at a cart and he would tell me, ‘Today we sold $1,000.’ It was hard to believe. But I learned how much can be sold from a cart and I thought: I need to get into this,” he says. It’s easy to imagine this same scenario today as retailers pass by the Brissys’s carts and notice the hum of activity surrounding them. They too must think: I need to get into this. Better hurry. This trend is one to slide into and lock in place. Luckily, stoppers are free.

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