Helzberg announced this week that it is consolidating Ben Bridge Jeweler into a new business unit, BH Jewelry Group, headed by Helzberg CEO Brad Hampton and named after the two retailers’ corporate parent, Berkshire Hathaway.
As part of this move, Lisa Bridge stepped down as head of Ben Bridge after six years at the job.
The reshuffle was largely unexpected, and sources believe it was driven less by issues at those specific chains and more by what’s happening behind the scenes at Berkshire Hathaway.
In May, Warren Buffett handed the role of Berkshire CEO to his longtime lieutenant Greg Abel (he remains its chair). So far, Abel seems a far more hands-on as CEO than his storied predecessor.
Under Buffett, Berkshire’s 60-plus companies generally ran independently. Even though it owns two jewelry chains (Helzberg and Ben Bridge), a one-store jeweler (Borsheims), and large jewelry wholesaler (Richline), those companies conducted business at “arm’s length” from each other.
“We trust our managers,” Buffett once said. “They’ve earned that trust. They’ve delivered over the years, and we let them run their businesses.”
Perhaps that sounds naive and old-fashioned. McKinsey types may fret over all the unrealized synergies here. Yet Buffett’s success speaks for itself, and his strategy was smarter than it might appear. As we have seen many times, just because two companies are in the same business doesn’t mean you can smush them together and create a winner. More often, the opposite is true: Research says some 70% to 75% of mergers and acquisitions fail.
Even so, a statement from the BH Jewelry Group said Helzberg and Ben Bridge will “benefit from the shared knowledge and experience gained from more than two centuries combined.” In other words: They’ll find synergies.
Yet the announcement still raises questions. First, will Berkshire’s two other jewelry holdings, Richline and Borsheims, join the new group? A spokesperson tells JCK there are “no plans” for that.
Second, did the two companies form the new unit because they needed help? When I spoke with Lisa Bridge at this year’s JCK show, she told me Ben Bridge had just racked up several strong months.
Like many retailers, Ben Bridge and Helzberg have slimmed down in recent years. Helzberg once had around 250 stores, it now has 163; Ben Bridge has gone from over 90 locations to 34. Even though they operated separately for years, Berkshire may now be betting the two businesses will be stronger together.
But it’s far from a perfect match. Helzberg and Ben Bridge have very different business models: Helzberg is a mall store; Ben Bridge caters to the high-end.
“Each brand will maintain its separate name, experience, and customer,” said the BH statement. “We serve different market segments and regions—that doesn’t change.”
Having reported on corporate moves for decades, I can say it’s quite likely things will change. Ben Bridge has already lost its CEO—a member of the fifth (and probably final) generation to head the company. In a LinkedIn note, Lisa Bridge said she was leaving because Ben Bridge was headed “in a different direction.” She didn’t specify what that direction was.
The jewelry industry tends to see everything through the lens of lab-grown diamonds, and while I hope the rest of the world isn’t as blinkered, this move does make you wonder whether Helzberg—which is heavily into lab-grown—will bring them to Ben Bridge, which has never sold them.
WatchPro recently wrote that Watches of Switzerland, having purchased a Ben Bridge store in 2021, should buy the whole chain. That is another possible shift. Buffett used to boast that Berkshire “almost never sells” its companies. In the early 2000s, when JCK ran a piece speculating that he might offload Helzberg, we received a note from the man himself, reiterating this oft-stated policy.
But Buffett isn’t running the show anymore. Earlier this year, Berkshire tried to dispose of its Home Services of America business—a move that Barron’s called “unusual” and “a notable change.”
That also describes what’s happening with Ben Bridge and Helzberg. Very few jewelers enjoy Ben Bridge’s reputation. Here’s hoping that keeps up, after the retailer spent years in a hands-off organization where it truly shone.
(Photo courtesy of Ben Bridge)
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