Business Leader Magazine Full Interview

What inspired you to go into business in the first place?

I wanted to be an artist. I had studied fine art all throughout school with great aspirations married with modest skills. In the middle of high school “business” opportunities started to present themselves. I received a grant from the Michigan Education Association to study computer animation as part of my Commercial Design and Graphics curriculum working with Commodore Computers Amiga and Time Warner Cable. They had built a cable television studio into our school and allocated us a channel to create local programming. The following year I became tutored by a director from Hannah Barbera. The results of those efforts was a 3 minute hand drawn animation reel that was used for the treatment of what would become a Saturday morning cartoon with corporate partners Anheuser Busch promoting their SeaWorld theme parks. In my first year of art school in Canada, I was recruited to create merchandising materials for the 1988 Winter Olympics in Calgary. I was 17. 

The following year I would file for patents for internally lit mechanical billboards. Under the newly formed company name of Cinemagic Marquee I had created movie poster displays for Blockbuster Entertainment. Enabling the video store and movie theatre industry to promote multiple films and concessions on each marquee. Adding movement and illumination substantially increased the value of the marketing real estate. These designs would go on to help create what would become a $6 billion industry worldwide. 

In the meantime, I transferred to the University of Michigan to study business and became a consultant for the automotive industry through the assistance of my father, an executive at Ford Motor Company. I was able to again utilize my design background in helping automotive assembly plants create more efficient methods of storing and distributing vehicles through trucking and rail yards. This fine line that separates the responsibilities of the UAW and the Teamsters must be strictly adhered to. The new vehicles come off the assembly line driven by the UAW to a neutral yard or holding pen. Teamsters then take control of the vehicles moving them into numbered bays that are then scanned into inventory control for the truck drivers or railroads. The ability to streamline this type of operation was very lucrative. Among others, I redesigned the facilities at the luxury marque Lincoln assembly plant as well as the truck plant where Ford makes their highest volume vehicles. I was 19.

What do you see as the biggest changes in the world of business over the past few years?

People always seem content to identify the internet as the greatest evolution the last century. But in recent years I have noticed that it is in fact the smartphone that has made the largest impact on the business world. Cellphones untethered us from our desks at a time when PCs had shackled us to the floor. So much of the business advancements have been the apps developed for literally millions of uses. Retail clerks have entire inventory control systems in their pockets. Drone, VR, AR, and AI technology have all rocketed forward a result of these shared software’s to anyone around the planet.

In addition communication has exploded.  It was a thrill to ride around in the late 1980s with a phone in your car. My first flip phone allowed me to walk through the woods and have conference calls. But today, I can manager, source, and expand my entire operation from the beach without even talking to another human being. The efficiencies that have been created for both personal and commercial enterprise are so far advanced they killed Moore’s Law.

The other side of that coin is the utter irreverence that comes from having grown up with these advancements as your base line of understanding. The younger generations are empowered by a trillion dollars’ worth of information and technology at their fingertips. They are hardwired to it unenthusiastically. Employing that power without fanfare or formality. We can make all the jokes we want about rotary phones, phone books, and map books, mimeographs, facsimiles, etc. But we dressed for dinner, for the office, and certainly on an airplane.

Today, there seems to be a loss of etiquette and elegance to the world of business. It does exist in certain industries and markets, but too much has the hoodie and the LMAO seeped into our professional culture.  Letter writing skills have been replaced with poop emoji’s and Casual Fridays know no bounds. I am afraid too that with so much immediate and instant gratification, the great art of conversation is now lost. 

Now how does this social change effect the world of luxury? The fine time piece industry, a major component of the overall jewelry market, has been drastically damaged by the fact that everyone has a “clock” on their phone. Form follows function. Much of the couture that once enveloped our business landscape has been replaced by skinny jeans and leisure ware. Home builders are even eliminating dining rooms as people are not as likely to entertain in formal fashion. That movement has also influenced the furniture, crystal, and flatware industries. People are not collecting fine china and crystal like they once were.

How did you get involved in the world of luxury?

I had just signed a 3 year $50 million contract to reverse the fortunes of a luxury golf resort $80 million in debt and wanted to mark the moment with a Rolex President. My trade broker referred me to a local fine jeweler with a 25 year history owned by two French brothers. DuQuet Jewelers at one time operated 5 retail locations and shop facilities supporting local mall jewelers.  One of the little known secrets across suburban America is that many of the locally owned fine jewelers contract out service and repair for the regional and national mall brands who cannot afford to pay for those high rent levels and staffing for full-service shops. 

After boasting about the deal I had just done, the owner took me to the private diamond room. He began to regale seductive tales about the fine jewelry and diamond trade. Several hours later I emerged completely enchanted with this new world and as the new owner of the establishment. The company earned just over $3 million in annual revenue selling to the area’s elite, political powers, and professional sports athletes. I quickly moved to renovate and update the showroom and shop facilities, while I setup office in the back by the bay of security monitors and stacks of decade’s worth of trade publications. 

Over the next several months I poured over those magazines (JCK, National Jeweler, and Modern Jewelers) and earned myself a PhD in the jewelry industry. Learning about the collective financial and transactional machinations of an entire industry in detail as reported for the last century was extremely motivating. DuQuets was very event driven and a great supporter of local charities. These principals have carried forward through to today just on a significantly larger scale. We hosted charity events and VIP parties at art galleries and society functions, displaying our custom diamond collections on beautiful models to the champagne & caviar jet set.  Auctioning off jewelry to raise money and awareness for dozens of causes and community projects. That was when I knew I wanted to be in this industry.

It was my first investment in luxury. I was only 21 years old. It took me another 5 years to get that Rolex President. I saw little reason to take product off the shelves for personal use.  It is unnecessary to wear the watch when you own the stores that sell them. 

What is your view of the state of the worldwide luxury market?

I believe the worldwide luxury market continues to expand into more varied facets of life. Once just symbols of wealth or affluence, today you find luxury categories in everything from fashion to food. Companies and brands are embracing this new era of transparency and experiential lifestyles. They are creating the story behind the brand as part of the relationship with the client. This history becomes personal, if produced properly, and creates a bond between the banner and the user we have not seen before.

Luxury is also becoming simultaneously more global and hyper local at the same time. I recently read an article about the Top 50 men’s brands of all time. I certainly expected to easily identify the majority of them. I was disappointed to have only been familiar with about 40. The reason for this was the dominance some of these brands played regionally around the world. Similarly, as we have been working towards expanding our diamond and jewelry branding towards India and Asia, I have learned that most of the prominence in the Indian luxury market are local craftsman and artisans creating products for multi-generations on a very personal level which contradicts the luxury goods conglomerate model that Grand Metropolitan was built upon. We must find real and intimate ways to accommodate our clients as local family merchants do while still operating as a major player on the world stage.

Where does your passion for the luxury industry come from?

Having grown up as a student of the fine art world, it was only a few steps further into the realm of luxury. My parents did an exceptional job of introducing my brother and me to so much of what the world had to offer. I was encouraged to study calligraphy as much as martial arts. We were introduced to people from so many varied backgrounds. From my first ride in a private helicopter as a child of 11 to the family vacations down the coast in a chauffeured coach it was apparent this was the type of lifestyle I wanted to pursue.

Heritage and superior quality are significant components in the world of luxury. There is a specific cadence and a dialect in everything from wine to wardrobe. I didn’t just want to understand that language, I wanted to master it. It’s not about the ability to write a large cheque for a piece of fine art or rare vintage of wine. Certainly not the car you drive or the time piece on your wrist. But about creating something of substance that no one has ever experienced before. I think that is at the heart of both art and luxury.  

Compared to times gone by, what are the ways in which gaining funding has changed and is it for the better?

There are so many funding options today, it seems difficult not to get financed. Especially now where wealthy investors have a lot of cheap capital to put to work. This was the main motivator behind our participation in the Ellerines Furniture bankruptcy in South Africa. We believe that mobile payments and microloans are one of the major growth segments especially in emerging markets. Imagine retailers financing consumer purchases directly with payments made through their phones particularly for those communities without traditional credit card facilities or banking options. 

Crowdfunding sites like Go Fund Me, Kickstarter, and Lending Club are the great equalizers of our modern society. They empower anyone to participate in investing in entrepreneurs for as little as $10. Once you had to have substantial “skin in the game” or equity to start a business or develop a product. It took more than a doodle on the back of a napkin. Lawyers and bankers were engaged to support business plans, prototypes, and trademarks just to get the protection and attention of angel investors.

When I was in my late 20s, we made a run to buyout Samuel's Jewelers, then the fifth largest retailer jeweler in the United States with about 115 locations and $120 million in annual revenue. The acquisition was to be the first in an industry rollup that would become Finlay Enterprises. It was not the cost of the purchase that was the difficulty. We had to also refinance the $50 million line of credit supporting the company.   The interest on the three tranche finance package was so attractive to the current financier there was little incentive to exit. We spent two years and millions of dollars trying to close this deal. I wasted an exorbitant amount of time and effort meeting with “money people” from every walk of life including Las Vegas insurance companies, Hollywood film financiers, and Florida real estate developers. The fundamental metrics of the debt were too highly leveraged for traditional lending institutions to want to participate. In addition, I had third party paper commitments of over $100 million at the time. The most significant hurdle was that no one in the finance world knew who we were.

Ultimately, the entire acquisition became too expensive growing to $75 million in debt service with depreciating assets, I had to admit defeat and walk away from the deal. Within 30 days, Samuels Jewelers filed for bankruptcy protection. Eventually it was bought by Indian based Gitanjali Group, a close relation of the now infamous Nirav Modi currently sought for defrauding state-owned Punjab National Bank of $2 billion. Incidentally, Samuels Jewelers, and three companies owned by Modi’s Firestar International Ltd.—Firestar Diamond, A. Jaffe, and Fantasy Inc. just filed for Chapter 11.  In the shadow of the disappearance of Nirav Modi and what is allegedly shaping up to be the largest fraud in Indian history placing thousands of hard working people at risk. The three companies said they hope to find an eventual buyer or investor. We will not be participating this time.

How important is the role marketing and PR plays to your business success over the years?

Public relations is imperative in any business. And quite honestly your own personal brand as well. Advertising is when you stand up and broadcast to everyone how exceptional you are. Public relations is when someone else does it for you. It can be translated through any myriad of mediums with today’s focus on social media and digital platforms. After my failure to buyout Samuel's Jewelers, I wanted to take a break from diamonds. It infuriated me to have such grand plans and be unable to execute them. I found the tobacco business to be a wonderful escape while I tended to my bruised ego. I had a home near the birthplace of the North American cigar trade, Ybor City. The influence and culture was intoxicating and drew me in.

A startup company in South Florida had been all the sensation with this new technology of streaming video games over the internet in real time. The firm had raised significant capital in a series A from friends of mine and was preparing to go public through a reverse merger. Every publication, both print and online, was picking up this amazing story about the “black box” and how it would revolutionize entertainment for the world. I knew the designer contracted to make this black box and also knew that the company was hocking vaporware. I belonged to the same club as the CEO.  Somehow this story received over 2 billion media impressions which paved the way for their $300 million valuation making some of my local associates very wealthy, especially the CEO. This was an incredible feat for a company with no working product or revenue. 

I contacted the Los Angeles based Public Relations firm and asked to speak to the President. I wanted to know how it was possible that this puppet show was able to get so much coverage with a postal address and a plastic box full of wires. PR. Over the next year, I became partner and CEO of this firm that held the honor of being the first agency that Bill Gates and Steve Ballmer hired to represent Microsoft. In addition to hundreds of blue chip clients, the company was always on the bleeding edge of technology, marrying Los Angeles and Silicon Valley’s greatest stars to the worldwide press.

What does it take to be a success?

Success, just like luxury, is defined differently for everyone. The key to longevity and thus a level of success at least in my career has been to maintain ones integrity. Everyone experiences dips and challenges, it is how you manage through the storm that matters. When you are starting out, shortcuts can be very tempting, especially if you are really hungry. With the digital world, everything you do and say is forever. It will shadow you the rest of your life. If you are like me, I google everyone I am considering to be in business with.  How you treat people will ricochet throughout your life. We are very active on social media platforms. People get a familiarity with you, your company, and your products. Even if you are only getting a few likes, there are thousands of people watching. The messaging you put out regardless of if it pertains to your professional dictates if people will consider working with you. And you don’t know what interactions are going on behind the scenes. 

We have a significant presence, especially on Linked in. Occasionally, people become aggressive and/or negative about a post. This is particularly true in luxury as “socially conscious” people think you should sell every luxury item, giving all the proceeds to the less fortunate. “Do you know how many people you could feed with that diamond ring?” or “You should sell that painting and build houses for the poor”.  Now of course, we do a great deal for people in our communities, and there is always more to contribute. But if you attempt to argue with people that make those comments in an impolite manner, it only reflects poorly on you and your company.

I am often approached and questioned “Why don’t you fight back on the message boards? How can you let people speak to you in that manner?” Well, my ego aside, I represent my company, my brands, the people that rely on me for their own livelihoods, dreams, and future. If I were to take to task everyone who is simply just unhappy with their own life and lashing out, it does not show well for us. And rightly could come back to hurt all of the good things we try and do for our clients and communities. 

I know the modern idiom is “fail fast” to get on to your next venture. This is quite often the slogan when you are using other people’s money to fail.  With the economy soaring today, investors have a lot of money to back all manner of ventures. And of course with the media pumping away the valuations of the high flyers, we are reaching a level of deal mania reflective the dot com era. Entrepreneurs are so desperate to be successful at anything they toss everything against the wall hoping something will stick. I receive hundreds of pitches a week, many are from the same people looking for someone to pay them for their dreams. They want so badly to participate in this high wire act but refuse to leave the ledge.  Most people equate success with a dollar value. But it really is about the journey and your accomplishments along the way. There are far easier and stress less ways to make a living. 

I started out as an artist. While I never made a name for myself, we now own Beverly Hills’ Gallery Rodeo, one of the most influential fine art galleries in North America with over 100 works in the Rodeo Collection.  As a designer, my marquee patents are still operational and profitable in tens of thousands of billboards around the world. They have also been mounted on the side of trucks, stadiums, and buildings. The greatest thrill for me, during the G20 in Moscow, was seeing an example of my patents on a billboard across the Neva River, at the foot of the Birzhevoy Bridge facing the Hermitage Museum. 

While my name is not prominent compared to Harry Winston, Versace, or Van Cleef, Finlay Fine Jewelry brands have earned far more revenue than each of those companies.  The Who’s Who that have worn my tennis earrings on the red carpet, television, or film is equally impressive. Our LOUIXS cigars are not as famous as Cohiba, Opus X or Montecristo, but they have been rated TOP 10 in the world while the Beverly Hills Cigar Club has been revered as the TOP 5 best social club memberships in the world by Playboy Magazine. Not too bad for a distraction. 

What is the biggest hurdle you have faced in business over the years, and how did you overcome it?

If I had started out with $3 billion in 1985, things would have been so much easier. Many of my contemporaries came from very wealthy and prestigious European families.  Bernard Arnault (LVMH), Fran?ois Pinault (Kering) and Johann Rupert (Cartier) all effectively started their companies when I did 1988-1989. Watching as they assembled the world’s most iconic luxury brands was stimulating, I wanted to be a part of that “Champagne Wishes & Caviar Dreams” world. But unlike so many that strive to be a part of the club, it was my ambition to own the club.

When I was younger I was very impatient, driven by ambition, wanting to get my name on a list in a magazine. As mentioned, I had some modest success in my teen years and was anxious to make my mark on a much larger world. I had to navigate my way through a very complex and foreign world with little guidance and even more limited resources. Everything took 3 times longer and cost twice as much as you calculate. As a result, I financed everything independently. No debt, no partners, no borrowing from friends and family and certainly not financial institutions. In the earlier years that put progress on a glacial path. But along the way the lessons learned about debt and managing overhead is exactly how we have sustained such aggressive growth to the top of the industries we occupy.

I had two “mentor-figures” in the diamond industry one was clad in Brookes Brothers and drove a Bentley Mulsanne. He was chauffeured in a Cadillac limo to a high rise penthouse where he conducted business. He was a high flying member of all of the areas social and country clubs and splashed money all over town. He died in prison for tax evasion, having paid for that multi-million dollar penthouse with hundreds of $9,900 checks. The other wore Ralph Lauren and drove a subtle late model Mercedes sedan with a quiet private estate in the country. He retired to fly his jet through wine country. 

The more successful people are the least assuming. All that noise draws the wrong kinds of attention and paints a target on your back. Like the gilded Mansory cages Bel-Air neighbor and fellow art collector James Stunt idles around London in. The higher profile creates elevated concern for security and safety. When people start to experience monetary success today, the first instinct is to take selfies sitting on private jets or Ferraris or closets full of designer labels and fancy watches. The adoration of the masses can be very addictive if you participate in those kinds of demonstrations. Being successful can be very expensive. 

A lot of people think that it is the very wealthy that supports the luxury industry. It isn’t. The very wealthy spend their energies conserving and protecting their assets, managing their money very tightly to preserve it for generations to come. The more goals and accomplishments one overcomes, the more content one becomes with one’s own self. You learn patience. 

How do you see the business landscape changing and evolving over time?

We are a global economy and every pebble tossed into the pool creates ripples around the world. As such you are seeing many blue chip established companies making major investments in the tech sector as well as acquiring very young but scalable startups. Amazon bought both colossal retailer Whole Foods and medicinal packaging startup PillPack.  While centurian Nordstrom Department Stores picked up two digital startups, BevyUp and MessageYes.  I think many of these organizations are finding that buying innovation is much more satisfying to their investors and PR than attempting to grow or develop from within. This seems to mimic a lot of the hiring practices of the Fortune 1000 around the world. Professional executives are really being shown as the rock star celebrities of their own industries. Apple has wooed dozens of executives away from the uncertainty of Tesla. 

I think we will continue to see companies once hidden behind their countries borders taking larger and larger interests in brands all over the globe. As we saw when House of Fraser in 2014 was sold to Nanjing Xinjiekou Department Store. These organizations that specialize in one market segment in their home regions are now active and aggressively following the M&A playbook we saw emerge in the 1980s. The stakes keep rising and rising as deal heat is overcoming organic growth as the fastest way to grow revenue. But these companies are stockpiling debt because capital is so inexpensive. 

Any advice to entrepreneurs?

What are you willing to do to get what you want?  This is a question you must consider seriously. There is a great deal of freedom in working for someone else. When you take that step to running your own company you take on the responsibility of everything and everyone in your world. And honestly, there will be more doubters than supporters along the way.  It is no longer a matter of what you do for a living, but who you are. It is more important than ever to maintain your level of integrity throughout the entire process. As it may be your first venture, it probably won’t be your last. 

Why do they call you the “King of Luxury”?

That is a very generous moniker given to me by Beverly Hills Magazine. I can immediately list 3-4 other men that better embody that title, all living in either France or South Africa. Of course they all have at least 2 decades head start. But certainly, I am flattered by the title. I hope to earn it properly before the end of my career.

Founded in Beverly Hills, Grand Metropolitan is a luxury goods conglomerate boasting a portfolio of 130 affluent and lifestyle brands. Finlay Fine Jewelers are Heilig-Meyers Furniture both own and operate 20 of the Top 50 brands in their respective industries of the last century. Heilig-Meyers as a publicly-held company was the largest home furnishings retailer in the world. Finlay, today, is the leading privately-held retailer jeweler group in North America. 

We only enter industries where we can occupy a leading position. Beverly Hills Cigar Club, Gallery Rodeo, and Beverly Hills Sports Car certainly are iconic on the world stage even with their local positioning in Southern California. While gourmet food group Dalgety and its caviar brand Pushkin has a very global reach. Our competitors, LVMH, Richemont, and Kering don’t currently compete against us directly in any of the above industries and are not really known as strong influencers in the home furnishings industry other than brand extensions. Whereas we are more vertically integrated with strong focus on interior design and retail brands.

Prior to acquiring the brand, Finlay Enterprises was operating in over 1,100 locations earning over $1 billion in revenue for decades. The firm was one of the Top 3 jewelers in the United States. Currently privately-held Finlay Fine Jewelers sells diamonds and fine jewelry under 30 different banners across North America. This footprint once represented over 2,600 locations. In comparison, Tiffany & Co. operate about 100 stores, while Cartier has approximately 50 locations in the United States.

Monaco or bust?

In North America, there are arguably two main luxury epicenters, New York City, specifically 5th Avenue and Beverly Hills’ Rodeo Drive. When we started Grand Metropolitan Beverly Hills was the prime choice for our modest operation to stand out. The red carpeted, celebrity, star studded, gilded everything. I immediately acquired a prestigious fine jeweler off of Rodeo Drive that had an A list roster of clients. A few years later we added New York to our mailing address when we acquired the Finlay Fine Jewelers brand. 

I have maintained the same focus and goal for the last 30 years, wanting to own a private bank. Many people aren’t aware that each industry has their own finance vehicles. Both Heilig-Meyers Furniture and Finlay Fine Jewelers have been billion dollar financiers in their own markets for many years. In fact Heilig-Meyers was so successful with its finance it added jewelry counters within thousands of furniture stores.

When we started working on our international expansion, like North America, there are a few magnificent capitals of luxury. Dubai, Paris, Milan, Tokyo even London has a great deal of cache’. Our biggest competitors are based out of Paris (LVMH, Kering) and Switzerland (Richemont). So in similar fashion as Beverly Hills, I believe Grand Metropolitan’s future growth and the development of my banking project should find its home on the French Riviera in Monaco. We spend so much time at events at Cannes, Milan, and Monte-Carlo each year anyways.

You’re involved in caviar how did this come about and how big a business is this?

The Beverly Hills Cigar Club, unlike a local tobacconist, has become participant and host in hundreds of VIP and charity events on the world stage each year. BHCC has been considered one of the most exclusive private clubs in the world by Forbes Magazine with our LOUIXS cigar rated Top 10 in the world. As tobacco has become less tolerated on the international party circuit our influence and access had almost started to wane. Considering our clientele consist of the worlds rich & famous not just in Los Angeles but also Morocco, Milan, Moscow, and Monaco. These celebrity-laden society gatherings expect more than chips and dips from your local Selfridges. 

Pushkin caviar was an opportunity to enter where cigars were not allowed, opening up a completely new market segment for our gourmet foods group. Dalgety’s original mission was to help create access to fine foods for the burgeoning Middle East markets from around the world. This is especially vital during the next decade of World Cup and Olympics development floods the region. 

We had briefly ventured in private label spirits for the club and events but we could not develop any strong point of differentiation that could adequately compete with the multibillion dollar brands that were already dominating the market. With Pushkin, we have offerings for all of our VIP gatherings for the red carpet, Oscar’s, Emmy’s, Grammy’s and Independent Spirit Awards, after parties. Those corporate events and charity auctions, replete with the world’s jet set demand a quality far beyond that obtained by a retail accessible product.

This venture originated when we were travelling through Eastern Europe during the G20 on the eve of Russian Diamond giant ALROSA’s IPO. Finlay Enterprises has been positioning to become one of the largest diamond companies in North America with our network of jewelers. So this trip was 8 years in the making, touring the Baltic States ending up in Moscow and the Kremlin and vital for our plans to expand beyond the United States.

Pushkin Caviar originally sourced product from Eastern Europe for international events. This made it challenging to supply a consistently fresh superior caviar to all points around the world evenly. Inventory is not immediately abundant as, like fine wine or champagne, it can take decades to create a sustainable farm. Since that time we have begun to model our operation off of that of Coca-Cola Enterprises. According to a recent study, the global caviar market is expected to triple over the next decade. 

Our jewelry and home furnishing assets were grown through industry roll-up and vertical integration practices. We have begun implementing that same methodology with Pushkin. Instead of attempting to pull resources from Romania to service clients all over the world in an overnight operation, we intend to have sustainable assets available in the communities we operate including Sarasota, Florida where I have maintained a residence for two decades.

While we don’t publicly release financials in any division, I can offer that Iran, one of the leading exporters of fine caviar in the world, earns only about $2 million annually. Pushkin Caviar has participated in hundreds of parties and events worldwide as part of Grand Metropolitan.  Certainly there are a handful of much larger producers around the world that have caviar brands for the masses as part of larger fishery operations. These operators resell through thousands of mass retailers and wholesale suppliers. We prefer to be Ferrari over Fiat.

What makes a man?

Manners Maketh Man, William Horman, Headmaster at Eton School. I find this to be one of my favorite quotes and a useful mantra in business. One should always be consistent with how to treat others, regardless of lot or station in life. I have always worked diligently to be fair and balanced in my negotiations as I cherish a good night sleep. I find that to be the truest luxury of them all.