Philadelphia, PA - It’s the worst downturn in a century and across boardrooms executives are scratching their heads. How do we turn it around?

More than two years ago Steven Lagos, CEO and designer of LAGOS studied the marketplace and saw that business was changing. The supply chain was morphing and the new rules would be different. Computer technology and information systems made business transparent. Analyzing and understanding sell through and partnering with the retailer to optimize their business investment in our brand are the key to a successful business. There was nowhere to hide. The jewelry business could no longer afford to be “slow turning”. With this new focus in mind LAGOS and his team developed their business model focused on a more productive product range with a combination of core basics, spot on items and statement pieces.

In the past manufacturers would load up their retailers and leave them to fend for themselves with large space requirements and heavy inventory buys. To be a successful brand today suppliers will have to operate their models like a retailer. Steven Lagos explains “We have to take total responsibility for our real estate and manage all aspects of our productivity and image. It’s not us and them (supplier and retailer). We can only succeed when they succeed.”

The model focuses five basic metrics:

- Balanced product range, quality, training and service.

- Appropriate stock levels

- Appropriate gross margins to run a full price business

- Inventory Turn

- Enduring Value

“It’s really quite simple and back to basics. With the new economy there has been a price point reset. Our unit sales have been consistent and growing at the entry and mid-range. We are focusing on the self-purchaser, gift giving and occasion driven customer. These are regular purchasers that built this category before the market got overheated in the last few years” explains Chris Cullen, Vice President of sales and marketing. Success doesn’t come without a serious commitment from both sides. “Information systems make it transparent for everyone. A retailer flowing frequent reorders in keeping with sales activity are a more realistic and profitable way to do business we find”.

The formula works. Frequent reorders keep the best sellers in stock. Regular stock-balancing eliminates unproductive inventory and frees dollars for productive styles that increase turn and gross margins.