For more than a half-century, Borsheims, Omaha's iconic jeweler, has limited itself to a single store.
But this fall the Berkshire Hathaway-owned retailer will break tradition and open a second location — an outlet store at Nebraska Crossing Outlets in Gretna.
The outlet store, opening Nov. 15 under the banner Borsheims Boutique, will occupy a 5,500-square-foot space next to the Coach factory store.
Although a topic of discussion for nearly two years, the decision to open a store at Nebraska Crossing was made less than a month ago and required Warren Buffett's approval, said Susan Jacques, Borsheims' president and chief executive.
“Are we jumping in late? Yes, we are. But we'll be there at the ribbon-cutting on opening day,” Jacques said.
The outlet concept expands Borsheims' customer base by offering more merchandise targeting younger, value-conscious shoppers and puts it in the company of other upscale retailers with outlet stores.
The Boutique is a new concept for Borsheims, Jacques said, but value is not. She said the main store has always worked to attract value-conscious shoppers, especially since the recession, offering the “Borsheims Price” discount from the listed prices.
“It's not a huge stretch for us,” she said.
“With a projected three to four million annual visitors, introducing a Borsheims outlet location at Nebraska Crossing gives us the ability to reach a larger number of customers and prospective customers,” Jacques said. “The size and scale of this development, combined with the other luxury retailers, made this a perfect fit for us.”
Nebraska Crossing developer Rod Yates of OTB Destination said he's thrilled by the addition of Borsheims to the mall's lineup.
“I'm just over the moon about it,” he said.
Yates, who repositioned the Legends Outlets in Kansas City, Kan., transforming it into an upscale outlet center, said he approached Borsheims about creating an outlet store more than two years ago.
“When I started working on the merchandising strategy for the outlets at Nebraska Crossing ... one of the first aspirational brands we targeted was Borsheims,” he said. “With other luxury brands at the center such as Michael Kors, Polo Ralph Lauren, Kate Spade New York and Coach, this first and only Borsheims outlet location will stamp Nebraska Crossing Outlets as one of the premier destination shopping centers in all of the Midwest.”
Nebraska Crossing is a $112 million, 350,000-square-foot open-air shopping center under construction at the intersection of Interstate 80 and U.S. Highways 6 and 31. It is scheduled to open Nov. 15 with 65 brands, many of them new to the Nebraska market, Yates has said. It is replacing a 20-year-old outlet mall.
Jacques praised Yates and Frank Krejci of Omaha's Century Development, the mall's majority owner, for “doing an incredible job in taking down the old and putting up the new. It's an exciting opportunity for Nebraska.”
The look and feel of the Borsheims outlet, including its signature silver and burgundy gift wrapping, will mirror the retailer's 11-times-larger flagship store, located on Regency Parkway. “We want the experience to be a very similar experience as our main store,” Jacques said.
There may be some crossover in the stores' merchandise offerings, but the boutique will primarily carry its own unique collections, including diamond jewelry, gold jewelry and pearls with a small selection of watches and gift items, Jacques said.
Borsheims keeps a “very low operations-to-expense ratio” and, despite opportunities, it never made sense to open additional stores, Jacques said.
This time, however, the numbers worked. “They made a very attractive offer to get us there,” she said, referring to Yates and Krejci.
So far, four eateries and nearly 50 retailers have announced their intention to open factory or outlet stores at the reconfigured mall, which will feature 1-gigabit Internet service provided by CenturyLink and a sophisticated software platform that will connect retailers to customers.
Borsheims Boutique will join Helzberg Diamonds, also owned by Berkshire Hathaway, Kay Jewelers and Swarovski Crystals at the outlet mall. Jacques said the mix will give shoppers a range of choices.
Concern that opening an outlet store might affect Borsheims' image was a consideration, said Jacques, but other upscale brands such as Polo and Swarovski have successfully created outlet stores without tarnishing their reputations.
Borsheims' foray into the outlet market is typical of many national jewelry retailers, said industry analyst Caitlin Newsom of IBISWorld Inc. in Santa Monica, Calif.
In recent years, major jewelry retailers seeking to expand their appeal have established outlet and mall stores, many targeting the young, fashion-conscious customer, Newsom said.
The merchandise mix at an outlet store is very different from the mix at full-price stores, Newsom said.
While an outlet store might carry semi-precious stones, charm bracelets and other fashion jewelry, the full-price stores typically focus on diamonds, high-end jewelry and the expertise of their in-house gem specialists, a strategy that allows both divisions to flourish without cannibalizing sales from one another.
With the decision to open a Borsheims Boutique, the next step is a “long checklist” that includes ordering and installing custom cases and vaults for the store's mid-November debut, she said.
Although a manager for the Nebraska Crossing outlet store has not been named, a specific team, including buyers, is focusing on the outlet store, Jacques said.
As for “Mr. Buffett,” she said, “he's very excited about the opportunity.”
The Omaha World-Herald Co. is owned by Berkshire Hathaway Inc.
Original Borsheims was downtown landmark until '86
Borsheims' history dates to Omaha's early days of retailing, when Louis Borsheim opened a store in 1870 and, for a time, also operated a store in Council Bluffs that specialized in watches designed to help Union Pacific conductors keep “railroad time.”
Louis Friedman purchased the store in 1948 and sold it to his son, Isadore “Ike” Friedman, in 1973. Louis Friedman also co-founded the Nebraska Furniture Mart with his sister-in-law, Rose Blumkin, selling his interest to the Blumkin family in 1947.
Friedman's retailing secrets included paying cash for salesmen's wares, rather than taking jewelry on consignment. The cash-up-front philosophy and lack of debt netted discounts on the jewelry so that the store could compete on price.
Borsheims moved its one and only store from 315 S. 16th St. to Regency Parkway in 1986, shortly after the city redesigned 16th Street and removed street parking in front of the store.
Before that, it had been a downtown landmark over the decades. Some customers walked to the 7,500-square-foot downtown Omaha store from surrounding businesses. Others would park on the street or in a nearby alley to duck into the store to buy something or drop off a piece for repair.
Borsheims' move to Regency was a key loss for downtown retailing.
The Regency space had been vacated by the Hovland-Swanson clothing store, and the move made Borsheims the anchor at the upscale shopping center and, at least for a time, the nation's largest jewelry store under one roof.
The move quadrupled annual sales and boosted employment from 35 to 200 people. Borsheims has said its annual sales are the most for any single store, possibly excepting Tiffany's flagship store in New York City.
Warren Buffett's Omaha-based Berkshire Hathaway bought a majority of the store in 1989, the same year Louis Friedman died. Ike Friedman died in 1991, and his son-in-law, Don Yale, headed the company until 1994, when Buffett tapped Susan Jacques to be president and CEO.
The store expanded its Regency space from 23,000 square feet to 44,000 square feet in 1997, then added an additional 18,500 square feet in 2006. Today, the company's corporate headquarters are located above Borsheims' 27,000-square-foot showroom.
As Internet sales expanded, Borsheims' grew in that arena, too. Widely known customers included Bill Gates, who brought his fiancee, Melinda, to the store in 1993 to buy an engagement ring. They were escorted personally to the store by Buffett.
Columnist Maureen Dowd attracted attention in 2000 when she reported that friends of newly elected New York Sen. Hillary Clinton had registered for housewarming gifts at Borsheims.
Jacques said Borsheims has two big retailing seasons: the Christmas holidays and the springtime annual meeting of shareholders of Berkshire Hathaway, when thousands of Omahans and out-of-town visitors attend special events at the store and Regency mall.