Golden Opportunity

When Finlay Enterprises first approached Scot and Doug Congress a little over a year ago about acquiring Congress Jewelers, the brothers had little reason to listen. Since taking over from their father in 1998, they had built four new stores and made Congress Jewelers one of the most successful homegrown retail chains in Southwest Florida.

"It wasn't like we were looking to sell, but they were pretty persistent, and after three or four months we decided to listen," explains Doug Congress, vice president and chief financial officer. "We decided we wanted to continue our aggressive growth at a faster pace than we would have been able to with traditional financing."

But the Congresses aren't going anywhere. Scot Congress remains president, and along with chief operating officer Leon Benzrihem, the brothers will continue to handle day-to-day decisions, such as the hiring of employees and selection of merchandise.

"The natural thought people will have is that things will change, but we don't envision things changing at all," says Scot Congress, noting that the company's three top executives still spend most of their time in the various stores. "It has been pretty seamless, and our major role is still to make sure our merchandise is made well and is of fine quality, and to ensure fine customer service. The key to the company's success is that we're out there."

Along with the original store on Sanibel, Congress Jewelers currently includes two stores in Naples, one in Bonita Springs and a store in Key West.

With corporate offices now in Bonita Springs, the

company also operates a 1,700-square-foot jewelry-manufacturing facility.

Carrying high-end brands including Rolex, Louis Glick, Leslie Green and Congress's own line, Sealife by Congress, the chain was expected to

generate approximately $23 million in sales in 2006.

Combining high-end merchandise with personalized service is a formula that has served the Congress family well from the beginning, when Larry Congress started selling jewelry from a cabana on Sanibel 24 years ago. Following a career in jewelry sales, he had moved to the barrier island from Illinois in 1981. With a partner, he established a sailboat- and bicycle-rental business at Casa Ybel Resort.

Wanting to keep his hand in the jewelry business, Larry Congress also sold jewelry from the cabana-a sideline that proved popular with the affluent tourists who visited the resort. Within a few years, Larry and his wife, Dee, persuaded Larry Snyderman to let them establish a jewelry counter in the back of Snyderman's shoe store at Periwinkle Place shopping center.

Scot Congress was completing his business studies at the University of Florida, and after graduating, he decided to join the small but growing business. By the mid-1980s, annual sales reached $400,000 at the jewelry counter, and the Congresses decided to open their own store, adjacent to Snyderman's.

"The jewelry business was always something I wanted to do," says Scot, 43. "My father had let me work with him when I was a kid, and I would do any little job he would give me. I especially loved to engrave on the machine, and I always loved seeing and dealing with unusual pieces. I was excited when he got back into the business."

Doug came to the business later. A CPA, he was working in Atlanta and watching the family's burgeoning enterprise from afar.

"When I was younger, I never had a big interest in getting involved in jewelry, like Scot did," says Doug, 39. "But I came to Sanibel to visit in the summer of 1993 and saw how the business was expanding. I thought they could use some back-of-the-house assistance."

Within a few months, Doug and his wife, Melanie, who is also an accountant, had moved to Sanibel and were handling the store's finances. Scot's wife, Melissa, worked at the store as well, as director of merchandising. (Another brother and a sister are not involved in the business.)

Larry Congress retired in 1998, selling the business to Scot and Doug.

"He still makes a daily trip to the Sanibel store, just to say hello to everyone," says Doug Congress.

"He's kind of an icon on the island, and he enjoys seeing what the company has become."

A sparkling future

Soon after their father's retirement, the Congress brothers started looking for opportunities to open new stores. They decided on booming Bonita Springs for their second store, and then opened a third in Key West. By 2003, the brothers had entered the Naples market with a store on Fifth Avenue South. The latest store, at Coastland Center in Naples, opened in November.

Southwest Florida and Key West are perfect locations for building name recognition, says Scot. Key West annually sees more than a million visitors from cruise ships alone, he notes, and this region's large number of seasonal residents provides exposure to potential customers all over the country.

The acquisition by Finlay Enterprises signals an even brighter future for Congress. Partnering with such national retail chains as Bloomingdale's, Finlay Enterprises is a publicly traded company that calls itself the country's largest operator of licensed fine jewelry departments. Acquiring Congress Jewelers is part of Finlay's plan to diversify into ownership of small independent chains. Eighteen months ago, Finlay also bought Carlyle & Co. jewelers, a high-end chain based in Greensboro, N.C.

"We chose Congress Jewelers because it is a strong, well-run business that operates in a very attractive segment of the jewelry market," says Joyce Manning, executive vice president of administration at Finlay. "Congress offers beautiful stores, unparalleled customer service and a strong management team."

With annual revenues approaching $1 billion, Finlay's resources will allow Congress Jewelers to attract more high-end suppliers and increase inventory, as well as finance further expansion. The acquisition, announced this past November, included a $6 million cash payout and the retirement of about $10 million in debt (reflecting a seasonal peak in borrowing) as well as a potential earn-out for vendors based on the chain's financial performance over the next three years.

New store locations have not yet been finalized, but the Congresses say that two or three are in the works for the next few years. Target areas include additional coastal, affluent communities. According to Manning, that strategy should help Congress take advantage of favorable market forces in Florida.

"The luxury market has steadily expanded over the past several years," she says. "Based on the favorable demographics, we project it will continue to post solid growth in the future."

polished service

With growth, one challenge has been to retain a personal level of service that keeps customers coming back. The new store at Coastland Center includes a customer lounge, a private diamond-selection room, a cappuccino bar and fresh-baked cookies. The idea is to create a warm, almost intimate environment that encourages customers to linger and helps build a trusting relationship.

"The most difficult part of this business is building trust," says Benzrihem, who has been with Congress for the past eight years. "The key to our growth is to always keep the family environment in each store, and in that aspect, all the stores are the same. We give free batteries to any customer, free jewelry cleanings to any customer, and we have a lenient return policy. We also carry only the top 5 percent in all diamonds, the top jewelry and watch designers, and we follow the Kimberley Process for conflict diamonds, which is important." ("Conflict diamonds" are those mined in war-torn regions of Africa and sold to finance insurgents and armies. The Kimberley Process, established by the World Diamond Council and other diamond industry groups, certifies that a diamond has not contributed to the violence.)

"It takes a long time to build trust," says Scot, "but one simple way that we are different from other jewelers is that we have a jeweler/watchmaker on staff at every store. If you bring something in, you can watch the work being done."

According to Benzrihem, possibly the most important aspect to building trust with new customers lies in finding the right employees: Just four of 180 applicants to the new Coastland Center store made the cut.

"It's important to find employees who have that same passion for this business that we have," he says. "You can have a one-carat diamond that is very similar to another, with the same color and clarity, but is it cut well? Are the dimensions just right? We don't sell, we educate. If you ask any employee what we sell, they'll say service."

Finlay Enterprises understands that retaining the character of the existing stores is a top priority, says Benzrihem. That is one reason he and the Congress brothers liked what they heard when they finally started to listen to the company's offer.

"We are a subsidiary of Finlay now, but they are a company that wants to acquire only well-run, independent jewelers," says Doug Congress. "They leave management and the way we do business alone, because they know that nobody knows this market like we do."