Michael & Son’s strategy: Multiple revenue streams
The father of David Lorenz thought his son was crazy for plowing full speed ahead with work for Gems TV on the basis of nothing more than a handshake a couple of years ago.
But the decision by the younger Lorenz the one to whom radio ads refer as “the son in Michael & Son’s” has proven to be a key element in the growth of the Reno company.
This year, Michael & Son’s Trading Co. will size about 50,000 rings for customers of Gems TV, which sells jewelry through a home shopping network and a Web site from its American base at Reno.
That’s enough to account for about 15 percent of the revenues of Michael & Son’s this year, and Lorenz figures it’s going to continue to grow.
But even more important, it provides even more diversification as Lorenz battles to make sure Michael & Son’s doesn’t get caught in the squeeze that’s claimed many mid-sized jewelry companies in Reno and around the nation.
Little jewelers often, true mom-and-pop operations can survive if they’re nimble and keep their costs down. Big retailers the ones that are publicly held and run stores in every mall across the country have immense buying power.
Michael & Son’s with its one retail location and 16 employees is neither little nor big. It’s just exposed.
Lorenz looks to generate lots of streams of revenue to protect himself.
There’s the Gems TV business, for starters. Three employees work at a 1,500-square-shop at the Gems
TV studio location, and they’re getting more efficient at handling a big flow of orders.
That’s a natural outgrowth from the jewelry repair business. Michael & Son’s sees a steady stream of its own customers, and also handles repairs for 10 other jewelry stores across northern Nevada.
And the repair business, in turn, draws customers into Michael & Son’s 2,100-square-foot store along Second Street on the Reno Sparks Indian Colony.
Launched in 1984 in a tiny 400-square-foot space by Lorenz’ parents, Michael and Mary, the store now carries both Native American products everything from jewelry and art to recordings of Native American music along with fine jewelry and accessories.
Another growing stream of revenue comes from Nevada Wolf Pack jewelry, a line of about 40 licensed jewelry products designed by Lorenz.
The success of the University of Nevada, Reno, products is great enough, in fact, that the company developed a line of similar jewelry for South Dakota State University.
“We think about things and go after them,” Lorenz says. “We can react fast.”
About a third of the company’s revenue, meanwhile, comes from the prosaic business of buying scrap gold wedding rings after a divorce, for instance. Like any broker, Lorenz makes a couple of percentage points
on each deal and looks to make a profit on volume.
Even though David Lorenz and his wife, Shannon, have done well with Michael & Son’s since they purchased it from its founders in 1990 and posted first-year sales of $50,000, Lorenz has been taking classes at night
at the University of Phoenix to further sharpen his skills.
In fact, some of the diversification moves made by Michael & Son’s Trading Co. first got a full vetting during group projects in his graduate-level business classes.
And Lorenz never lets himself get too far from the jeweler’s bench or his Nevada roots.
“Boots and jeans that’s who I am,” he says.
The unanimous approvals Wednesday came despite state leaders promising to tighten up requirements for Nevada’s tax abatements and incentives for future companies.