PAJ Canada: Finding success in a new reality
by jacquie_dealmeida | May 1, 2016 9:00 am
By Jacquie De Almeida
Mary Milan is on a bit of a high these days—a record high, that is.
Although PAJ Canada, the company she leads as its senior vice-president, grappled with the same pressures as the rest of the industry last year, judging by recent events, she’s expecting much different results in 2016.
“Please excuse the mess,” says Milan, as she shoves stacked boxes closer to the wall, clearing the way to a showroom at the company’s Markham, Ont., office. “We just got back from a trade show in Phoenix and we haven’t put everything away.”
Ask her how it went and Milan will tell you PAJ had a record show. It’s a response few are able to offer these days, given slower-than-normal sales reported from all parts of the supply chain over the last year.
“We’re really excited about 2016,” she says. “After the Canadian shows last August, things just soared. It was a strange transition. I think it’s because we came out with the right product, the right pricing, and the right terms.”
The ‘we’ Milan is referring to is PAJ Canada’s team of about 30 employees spread out across the accounting department, IT, repairs, and warehouse and shipping. She’s come to think of her staff as family, affectionately referring to her sales and marketing team as “my girls.”
Viva vermeil
Milan’s office is a small slice of a much larger pie that traces its roots back to 1978 when Felix Chen founded PAJ—Prime Art & Jewel—after noticing a void in the market, particularly among department stores, for ‘bridge jewellery’, which offered a luxurious look minus a hefty price tag. His idea worked and soon established brands, such as ELLE Jewelry, were approaching him to design, manufacture, and distribute their lines.
Over the years, PAJ has grown to include manufacturing and/or distribution deals with other brands, such as STEELX, Roma 1947 and its latest addition, PIARA by Elaine J, although as a handmade line, most of it is manufactured by artisans in Italy and the United States. Reign, a collection of silver jewellery with proprietary-cut cubic zirconia, is a PAJ house brand. Headquartered in Dallas, Texas, PAJ has offices around the world, employs over 3000 people, and churns out more than two million pieces of jewellery every month from its manufacturing facilities in China. Its control over designing, manufacturing, and distributing makes it a vertically integrated company, allowing it to protect its clients’ proprietary information and intellectual property.
Now responsible for PAJ’s Canadian operation, Milan got her start in the industry as an account executive for Montreal-based Continental Jewellery Co., which at one point was considered one of the country’s largest manufacturers of fashion jewellery. In 1998, PAJ acquired Continental, forming PAJ Canada. Within two years, Milan had become sales manager. Five years later, she was named PAJ Canada’s vice-president and just this year, its senior vice-president. The promotion also now makes her responsible for all PAJ brands sold to U.S. independents. “It keeps me just a little busy,” she says tongue-in-cheek.
The weak Canadian dollar is not helping in that respect. Like most importers, PAJ Canada has had to contend with the loonie’s lesser value against the U.S. dollar and trying to maintain its pricing structure. Increasing prices by 30 per cent to make up for the exchange rate is not an option, she says, given the economic landscape and stiff competition in the jewellery industry to vie for smaller stashes of consumers’ disposable cash.
“We’ve tried to maintain pricing for the most part and made cuts to other areas of the business,” Milan says. “At the end of the day, if you add 30 per cent onto the product, it’s not going to work. I think the reason we’ve been successful is by trying to be consistent on not raising our prices very much.”
While the Canadian dollar has declined, so has the cost of silver, which makes up the bulk of PAJ’s product offering.
“You save in one area, but lose in another,” Milan explains. “Labour costs have also gone up dramatically. Any breaks we used to get by manufacturing in China are no longer there. Transportation costs have also risen. You’d think with oil prices going down, shipping costs would decrease as well. If anything, they’ve doubled in the last two years. If you look at what we used to charge when silver cost more than $40 U.S. an ounce, our prices haven’t really changed that much because other costs have risen.”
A social outing
One way PAJ Canada has cut costs is by trimming its print advertising budget and finding other means of connecting consumers to its retailers, such as through co-op advertising. Retailers are given a percentage of their total sales that can be put toward advertising, whether it’s a Christmas flyer, direct mailing, or a billboard.
“I think that worked much better for us for the most part,” Milan says. “Our retailers find this is quite effective. Unless you’re advertising in every consumer magazine, you’re not going to get a lot of attention. By using flyers or direct mailing, it’s a more concentrated method of reaching our retailers’ client base. We will still do print ads, but we will be more selective on which editions they’ll be in, such as the issues that come out before Mother’s Day, Valentine’s Day, and Christmas.”
PAJ Canada is also looking to reach consumers by ramping up its social media efforts. “It’s something you have to do these days,” Milan says. “We’re in the midst of looking for someone now who understands social media and how to effectively put it to use in promoting a product or brand.” The company is also exploring working with bloggers to reach new audiences and engage with them in a different way.
Once you’ve reached those audiences, however, the product you present them should resonate, which is why PAJ Canada offers brands in different materials to hit various price points.
“We know what the end consumer is willing to pay for a certain product and because we have our own designers, we are capable of making it,” Milan says. “We know everything over $200 is difficult for us, unless it has gemstones, which is why we design product that sells from $50 to $200.”
PAJ Canada recognizes keeping stock new and fresh helps spur consumers to take a closer look, which is why it allows stock balancing twice a year among independents carrying ELLE Jewelry. “We offer to take back up to 10 per cent of what they bought and replace it with something else. We all want the statement piece in the store, but it’s not a certainty it will sell. At that point, the retailer might want to exchange it for something else.”
In an industry rooted in reputation and the good will implied by a handshake, Milan is especially proud of her team.
“Not one day goes by that I don’t get a compliment about at least one of my girls,” she says. “They are total professionals. We’re still of the belief the customer is always right. My response when we do get a complaint is to make it right. I ask the client what they think is fair, and they’ll tell me. Most of the time, it’s reasonable.
“I don’t like to compare myself to anybody else. I just worry about what I’m doing. When everybody is doing well in good times, people can get lost. But when times are bad and you’re doing well, that’s when you really know you’re doing something right.”
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