Barnett Helzberg: Using marketing to make a diamond empire

 Although Helzberg was started by Morris Helzberg, the interesting story is that of his son Barnett, who took control of the company at a very young age and with great marketing talent turned a single store into a very successful enterprise. Barnett Helzberg was born in Kansas City, Missouri on December 21, 1902 to Morris Helzberg, a Russian immigrant, and Lena Cohen, originally from New York. Barnett was the youngest of four children and at elementary school, one of his classmates was Walt Disney. Two young boys, full of drive to succeed that during those days had not known how far they would go.

In 1915, it was Barnett's father Morris that opened the first Helzberg Diamond store on Minnesota Avenue in Kansas City, Kansas. About a year later Morris suffered a stroke that prevented him from running his store and young Barnett, just 14-years-old and a student at Central High School, took his place at the helm. World War I was raging in Europe, and Barnett's older brother Gilbert was in active service at the time. Upon Gilbert's return, the two brothers became partners.

Young Barnett was ambitious and had a strong sense for doing business. He wanted to expand and in 1920, the two brothers opened a second store, also on Minnesota Avenue. The desire to grow persisted so before long, they opened yet another store, this one in Wichita. Running two stores on the same street in Kansas City did not prove very successful and the brothers decided to close their first store, the original location opened by their father. It was around this time that their father died at the age of 54.

In the early 1920s, Barnett understood the importance of marketing in the changing post World War era, and decided to invest in newspaper advertising to reach more customers. He started by establishing a special sales day, offering discounts on a number of diamond jewelry items and spent $300 on ads. The campaign was a success and he decided to increase his spend on advertising. Over the years he increased his marketing budget to $3,000 to place ads more frequently as well as creating full page spreads promoting deep discounts, giveaways, invitations to "meet the Helzberg boys" and wear diamonds. Over the years their offerings expanded to include kitchen utilities such as electric waffle sets and cookeries.

One of the innovations launched by Helzberg was offering installment plans to buyers that could not pay up front for the jewelry that they wanted to purchase. Today, such plans are very common, however in the 1920s they were very unusual, underscoring Helzberg's forward looking approach and willingness to try new approaches to selling jewelry.

The expansion plans went well, and in 1929 they again had three stores after opening on Eleventh and Walnut in Kansas City, Missouri, a prominent location. At the close of the decade, Barnette was recognized as a well-established jewelry retailer, with a reputation as one of the foremost jewelers in the Midwest. Despite their success, the brothers decided to end their partnership, leaving Barnette with the freedom to make independent business decisions. Ultimately, the growth path proved much faster from this point.

That growth path was based on ongoing investment in marketing during one of the most challenging times in American history – the Great Depression. While the economic hardship led to many business closures during the 1930s, some companies found ways to survive. For Helzberg, a company that mainly sold a non-essential product, that meant heavy reliance on marketing. During this period, the company kept publishing newspaper and magazine ads, but also spent on sponsorships. Sponsoring was a growing trend of the day especially on American radio stations where companies sponsored programs that carried their names. Barnet Helzberg jumped on that opportunity. He started sponsoring a weekly radio program that provided uplifting entertainment to listeners called Helzberg Sweetheart Hour.

The Helzberg Sweetheart Hour helped solidify its position as the store to go to for bridal and engagement jewelry. The love motif Barnette developed during those years lasts in the company till this day, taking a serious boost during the 1960s when the company, then under the guidance of Barnett's son Barnett Jr., launched an "I am loved" campaign based on giving away free lapel buttons.

At the height of the Great Depression, Barnette took another bold move – expanding stores. It was considered a brave move that local newspapers hailed as encouraging, among others because it provided more jobs. The positive press coverage further helped the business.

In 1944, Helzberg was among a group of likeminded jewelers and diamond retailers that formed the Diamond Council of America. The Council's mission was to provide quality education to jewelers, helping them learn how to sell fine jewelry with expertise, integrity, and professionalism.

During the next twenty years, Helzberg grew and prospered. Barnett succeeded in opening an exceptionally large, three story store, a mission he set out to achieve for some time. The store, opened in 1948, was called Helzberg's House of Treasures, reflecting the fa- reaching mood he wanted to set for those entering the store – that it is a treasure trove. By the end of the 1950s, Helzberg's Diamonds was a large jewelry chain with 15 stores in Kansas City and across the Midwest.

In the 1960s, with his son Barnett Jr at his side, Barnett Sr was slowly handing over the day to day management of the store to his son. In 1963, he took the position of Chairman of the Board, appointing his son to CEO of the company.

Under the fresh leadership of Barnett Jr, the jewelry firm kept expanding, opening on average three stores a year during the 1970s. In 1995, with some 150 stores operating across the US and being one of the largest jewelry chains in the country, the family business was sold to Berkshire Hathaway.

Barnette Helzberg Sr died a tragic death on June 30, 1976 at the age of 73, falling out of his apartment. Like many other industry greats, he left behind him a legacy of innovation, a deep understanding of the importance of creating eye-catching marketing campaigns that keep reinvigorating store traffic, giving back to the community, and a deep appreciation of the constant need to evolve in changing market conditions.