Shane Co. files for Chapter 11 after dismal holiday season
By Joyzelle Davis, Rocky Mountain News (Contact)
Published January 12, 2009 at 1:55 p.m.
Photo by Linda Mcconnell / Special To The Rocky
The Shane Co. has 23 stores in 14 states, including two in Colorado - one in Westminster and this outlet at 9790 E. Arapahoe Road in Greenwood Village.
Now you have a bankrupt friend in the diamond business.
Shane Co., the Centennial-based jewelry company known for CEO Tom Shane's folksy radio advertisements, on Monday filed for Chapter 11 reorganization in U.S. Bankruptcy Court in Denver following a dismal holiday sales season. Shane listed more than 6,000 creditors and both assets and debt of $100 million to $500 million.
Shane, which describes itself as the largest privately held jeweler in the U.S. with 23 stores in 14 states, said in a statement that it suffered disappointing sales during the holidays and foresees "grim near-term prospects" for a recovery. The 550-employee company said it plans to continue operations as usual during the restructuring and already has lined up turnaround financing from an unspecified source.
"The severity of this past holiday season dramatically impacted existing liquidity requiring the company to seek this bankruptcy protection," Tom Shane said in a statement. "Furthermore, by taking this action, I can provide job security to my loyal employees. I know that we will emerge from this situation as a stronger and healthier company that will be well positioned to reach its full potential."
The Shane Co. is at least the second major Denver retailer that's a casualty of the worst holiday sales season in four decades. The Parent Co., the owner of Internet retailers eToys and Baby Universe, filed for Chapter 11 bankruptcy protection two weeks ago.
Jewelers count on the holidays to bring in as much as 30 percent of their annual sales, more than any other type of retailer, according to the National Retail Federation. Independent and chain jewelry stores alike have been particularly hard-hit by the sharp pullback in consumer spending and the meltdown of the credit markets.
Zale, the nation's biggest jeweler, last week reported that comparable same-store sales slumped 20 percent for the combined months of November and December in a holiday period that CEO Neal Goldberg called "the most difficult in memory."
Chicago-based Whitehall Jewelers closed 370 stores last year in a bankruptcy-court ordered liquidation, while Sonny's Diamonds & Jewelry in Cherry Creek North announced it was shuttering after 30 years in business.
Shane has two Colorado locations, in Greenwood Village and Westminster.
Shane Co.'s bankruptcy filing "is a sign of the times," said Grant Speed, co-owner of independent retailer Jewelfire Diamonds, which has stores in Arvada and Aurora. "A lot of retailers just oversaturated the market, and now it's a natural selection process to correct it."
Charles Shane purchased his first jewelry store in Cleveland in 1929, the year of the stock market crash. His son Richard expanded the company into one of the largest jewelry chains in the Midwest, and Tom Shane in 1971 started his own jewelry business as the Shane Co.
Tom Shane has been the public face of the company for much of that time, earnestly delivering the company's tag line "Now you have a friend in the diamond business" in advertisements that tout the company's "no-middle-man markup" approach to buying diamonds and other gems.
Shane owes as much as $26.2 million to its 20 biggest unsecured creditors, according to court papers. The largest unsecured creditor is New York- based Dison Gems Inc., with a $4.7 million claim, the company said. Among Shane's 6,000 creditors are 4,600 customers who placed special orders or made layaway deposits on future purchases.
Tom Shane, who has granted few interviews with the press in recent years, didn't return a call for comment.
In a 2002 interview with the Atlanta Business Chronicle, he called the ads "the longest-running continuous campaign in the history of radio" and said he writes them himself.
"A lot of owner-spokesmen are really pitchmen, and I'd like to think that's not how we position ourselves," Shane was quoted as saying. "We try to be credible and sincere. Most people don't know much about jewelry. They want to be assured that they're not going to be ripped off."
Shane Co.'s 10 biggest unsecured creditors
1. Dison Gems, New York, $4.7 million
2. Leo Schachter Diamonds, New York, $4 million
3. Eurostar Belgium, New York, $2.7 million
4. Nelson Jewellery Arts, Los Angeles, $1.9 million
5. SAP America, Philadelphia, $1.6 million
6. M/SH Dipak & Co, Mumbai, $1.5 million
7. Luminar Creations California, $993,825
8. Thousand Million Jewellery, Hong Kong, $990,022
9. Jewelex, New York, $777,484
10. Novell Enterprises, New Jersey, $715,950
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January 12, 2009
2:10 p.m.
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leavemealone writes:
The bling has lost its ring-ding-ding!!!
No surprises there whatsoever.
January 12, 2009
2:15 p.m.
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the_ripper writes:
Now YOU have a friend in bankruptcy court...
January 12, 2009
2:16 p.m.
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Who_Me writes:
Does this mean there are no more "I'm Tom Shane and my family blah blah blah" commercials on the radio? This, along with former-Broncos-coach-what's-his-name and Tryce jewelers going away? Yes, Virginia, there is a Santa Claus.
January 12, 2009
2:17 p.m.
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Deepstroke924 writes:
At least we dont have to listen to the those boring radio commercials anymore...
January 12, 2009
2:21 p.m.
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leavemealone writes:
The dollar is worth almost nothing....no surprise consumers are keeping what's left of their $$$ to pay bills, etc.
January 12, 2009
2:21 p.m.
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Shaupeen writes:
I hate to see businesses fail, especially when that business is the little guy taking on the giants, but if this news means I won't have to hear those freaking HORRIBLE radio commercials, then my day has been made!!! Seriously, nothing gets me to change the channel faster than "eight-percocet" Tom Shane's voice.
January 12, 2009
2:23 p.m.
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leavemealone writes:
The Shane Company isn't going anywhere!
It's business as usual....
January 12, 2009
2:35 p.m.
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Michael writes:
I love hearing him talk about his trips to Antwerp.
January 12, 2009
2:37 p.m.
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R8R_H8R writes:
Horrible commercials? in 2003 i moved to Phoenix, 3 years later, having Never been to the Shane Co. in Denver, I could still recite EXACTLY where it was in Denver, had i ever needed to go there. The commercials were/are brilliant. Everybody knows where the Shane Co. is. Sounds like a severe lack of Fiscal responsibility has brought it down.
Now I! have no friend in the Diamond Business.
January 12, 2009
2:37 p.m.
Suggest removal
kodijack writes:
One of the funniest things I ever saw was the group picture of Tom Shane and friends that hangs in the Englewood store. He is not only the shortest guy in the picture but its completely obvious. You stare at the picture saying "who is the really short man?" And...its Tom Shane.
January 12, 2009
2:37 p.m.
Suggest removal
Cruisinaqha writes:
Shane Co is not going anywhere.
Chapter 11 means you are asking for help holding the creditors at bay while you "reorganize your company".
They will pull out of this just fine.
January 12, 2009
2:46 p.m.
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jersey writes:
Best of luck Tom and happy trails. If you ever decide to restart the business you might want to spend a few extra bucks and go with a 5th Avenue Ad agency with a proven track record instead of the bor-ring excuse for one previously used. Just goes to prove more times than not, you get what you pay for!
January 12, 2009
2:49 p.m.
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leavemealone writes:
Luxury items have lost their appeal starting way back in 2000 & their shine will only diminish as time goes by.
Many of the bling/bling businesses have survived off of credit & we all know the rest of the story.
January 12, 2009
2:50 p.m.
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leavemealone writes:
Hello people,
The Shane Company isn't going anywhere!
It's business as usual....
January 12, 2009
2:52 p.m.
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leavemealone writes:
they will be paying back a fraction of their gross debt over several years.....pennies on the dollar.
January 12, 2009
2:55 p.m.
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666 writes:
Adios to the Ben Stein of the Denver jewelry market...same combination of dreary voice and bad decision-making skills.
January 12, 2009
3:02 p.m.
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Purpose4mylife writes:
I must agree that his commercials are totally boring and never changing but isn’t it the advertisers main goal to have us be able to recite, verbatim, all his commercials for 20 years straight? We all know exactly what his hours are and where his stores are located. How many hilarious and entertaining commercials have you seen where you don’t have the vaguest idea who the commercial is for after it’s over? Those Shane Co. commercials are just a part of growing up in Colorado, like it or not, lol.
January 12, 2009
3:03 p.m.
Suggest removal
John8061 writes:
I thought the Shane Co paid "spot cash in Antwerp" for four generations to get the lowest prices and best selection for their customers. Dison Gems in New York???
January 12, 2009
3:03 p.m.
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bxwatso writes:
Interesting to see that if you want a rock, you can go to Dison Gems Inc. in NYC and cut out Shane's profit.
January 12, 2009
3:19 p.m.
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Mtnsjohn writes:
Imagine being in Seattle and all of a sudden you hear that very same voice telling you that you also have a friend in the Diamond business there. I thought maybe Tom was following me but, checking it out, I have friends in 23 stores in 13 states.
Almost as much of a shock as hearing that every Sea World has it's own Shamu and it took 30 dogs to play Marley.
January 12, 2009
3:27 p.m.
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Buckshot_Magee writes:
When it comes to radio ads that are just completely horrible, Lisa Schomp has the Shane Co. beat by a mile. I literally switch stations when she comes on. I advised my wife to purchase an Audi instead of a BMW based exclusively on the misery of listening to her voice...
January 12, 2009
3:33 p.m.
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jacka writes:
Trip to Antwerp? More like trips to NYC for a visit with Dison Gems.
January 12, 2009
3:34 p.m.
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cdmdenver writes:
THE DIAMOND BUSINESS NEEDS A BAILOUT LOANS...
Help a "Brother Out"!
January 12, 2009
3:40 p.m.
Suggest removal
Willy writes:
Mtnsjohn writes:
Imagine being in Seattle and all of a sudden you hear that very same voice telling you that you also have a friend in the Diamond business there. I thought maybe Tom was following me but, checking it out, I have friends in 23 stores in 13 states.
Yep those are canned commercials played all over the country. Just a different voice and a different name. Car dealers do the same and I am sure many other businesses do also.
January 12, 2009
3:50 p.m.
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milehighdisaster writes:
In general jewelry is the most impractical item in society. Women need to realize this. Most men don't care, and kids who are secure with themselves don't waste money on it. The minority cultures are the ones that have fallen into this trap of trying to compete with each other.
January 12, 2009
4 p.m.
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Uno writes:
What a Shane!
January 12, 2009
4:08 p.m.
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HankReardon writes:
He went to Jared!
January 12, 2009
4:12 p.m.
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broncodude writes:
I biitched and complained about those boring radio commercials many times and I ALWAYS change or silence the radio every time he comes on but - I have a confession to make. When I needed a ring for an anniversary present - - wait for it - - sorry - - yes I went to Tom Shane. Didn't know where else to go or whom to trust so I just went there. I did tell the clerk that I thought diamonds were the biggest rip off. He just smiled and took my check.
Sometimes the most annoying people are the ones you remember. How about that lady for O'Meara Ford? Ya, thats right - that one. Super annoying voice agreed? You can picture her face and everything right? Now see how many other dealership's spokespersons you can name.
January 12, 2009
4:23 p.m.
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Who_Me writes:
Don't have to name any other dealership's spokespersons, don't care to. It is enough to know that one: she is so irritating I would avoid that place in the first place, and two, obviously, they sell Ford POSs, so that in of itself would be sufficient to avoid that dealership. Now, let's talk about American Furniture Warehouse....
January 12, 2009
4:26 p.m.
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Triumph writes:
Now where am I going to go to get my flawed and yellowish overpriced diamonds? I guess now I'll have to go to Jared's for the good stuff .
January 12, 2009
4:34 p.m.
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forty5ford writes:
this isn't surprising. retailers are hurting more than what's being publicly disclosed and more of them will seek bankruptcy protection in the coming months. and it will be names you'd least likely suspect. one to watch for this friday is Circuit City whose fate is set to be decided in a court auction. if they aren't sold, and it doesn't sound too promising, CC is prepared to immediately begin liquidation. if you've got items to return for cash or credit refund, do it before friday; otherwise once they enter liquidation they won't accept returns.
January 12, 2009
4:35 p.m.
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GunnyBob writes:
Ripper:
I nearly fell out of my chair laughing when you wrote that.
January 12, 2009
4:49 p.m.
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Expos writes:
They deserve to have their business go down--They are rude. My wife and I went in there two years ago to purchase a ring for our 35th wedding anniversary and the staff was rude and didn't seem to interested in helping. We were not impressed and left.
January 12, 2009
4:59 p.m.
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RealifeTauren writes:
Why do consumers still buy diamonds? The cost in human blood and suffering is tragic, yet the marketeers still are able to convince the sheeple that they are a must have for love and romance.
A monopoly controls the diamond trade, and the gem is very far from rare. It is only expensive because the gems are leaked to market, creating an false shortage. The quantity of diamonds in the world is staggering.
I turn the station whenever I hear a Tom Shane commercial also, but not because of his monotonous voice...because the diamond trade should have gone the same direction as the fur trade, and the ivory trade.
January 12, 2009
5:40 p.m.
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Nosybear writes:
It's Chapter 11, people! All they're doing is ensuring their creditors don't get their money or at best get pennies on the dollar. If the bankruptcy court doesn't order liquidation, your soporific friend in the diamond business will be restocking the shelves within weeks. Expect no fire sale on diamonds, either. And a shout out to the "he went to Jared" dude - I don't use LOL very often!
January 12, 2009
5:51 p.m.
Suggest removal
NeilT writes:
Antwerp, eh, Mr. Shane??
Bull!
Dison Gems is based in India. Its president, Milan Mehta, works in New York on an H1B visa.
http://www.h1b-visa-data.com/state/NY...
http://timesofindia.indiatimes.com/ar...
I'm sure the Hasidic Jewish community in Antwerp doesn't think highly of your misleading ads. Good luck (not really) getting the financing you'll need to recover.
January 12, 2009
5:53 p.m.
Suggest removal
forty5ford writes:
my wife and i are not big on jewelry. i don't have a liking for diamonds and as my wife ages she's leaning the same direction. our 25th anniversary is approaching and we've decided to buy simple gold bands with a few carved designs.... a circle to celebrate our unending love & support; simple because that's what we are as individuals; gold to symbolize the non-monetary riches in our lives; and carved designs to represent our intricate & inter-woven spirits. the best part they're being crafted locally so they'll be unique, and without the diamonds we're saving a nice chunk of change and we never have to worry about losing the gems.
January 12, 2009
5:56 p.m.
Suggest removal
angryrepublican writes:
Wow! The wal mart of diamonds is bankrupt. Even his over the top rich friends wouldn't shop in one of his dumps.
January 12, 2009
6:04 p.m.
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SPL writes:
I hope a hand of diamonds in Texas Hold'Em, usually called Shane Co down our way, still has some value.
January 12, 2009
6:07 p.m.
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BMat writes:
Sooo we lost a lot in that condecending voice bellowing self conciously about how selective he is with slave labor rocks.
And the other jewelry stick-em-up place lost Shanny reading badly written dialogues about slave labor rocks and the latest broncos aquisition.
Things are tough all over, que no?
January 12, 2009
6:28 p.m.
Suggest removal
Scott writes:
For those of you who have been ripped and/or treated rudely at Shane, or any other "jeweler", give this place a try:
Schlener Jewelry at 10265 N Washington.
My wife and I have used them for over fifteen years. Two brothers own the store. They design, make and sell all types of jewelry. We are VERY pleased with them. Nope, I don't get a commission. I'm just a very satisfied customer.
Scott
January 12, 2009
7:11 p.m.
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loudsurfguy writes:
Maybe Tom Shane had all his fortune investmented with good ol Bernie Made-Off??
January 12, 2009
7:11 p.m.
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loudsurfguy writes:
Maybe Tom Shane had all his fortune invested with good ol Bernie Made-Off??
January 12, 2009
8:16 p.m.
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Astaroth writes:
With the ridonkulous mark-up on jewelry, I can't feel too sorry for ANYONE in the business.
January 12, 2009
8:25 p.m.
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LOUIE writes:
Things I could tell you about the trade; perhaps another day. I am always sad when I see others struggle. Whether the diamond trade or a newspaper like the Rocky, those are jobs being lost. Every day people stand in front of us, many are really hurting; we put out the best of our knowledge and time trying to work with them. From the rich man, to the man in the street, both stand before us for different reasons; yet the one in the street is the one that is the hardest upon the heart. The rich man comes looking to enhance his fortune, the other just wants to buy another day. These next 3 years are going to be very tough, so many are going to be out of work, their lives turned upside down. My brothers and I take time to listen to each story, each is the story of a person, each story different, and when I think the pain could be no worse, another comes with a even worse tragedy. To see both worlds collide in one office standing in front of us is a real intense experence in life itself. It's hard for us to find humor in the jobs and families being so adversely affected. We have learned more in life by experence than we ever could in a classroom. Sad to see any business go through the hardtimes knowing how many people are going to suffer because of it.
January 12, 2009
9:17 p.m.
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TheDenverB writes:
best lede in the rocky mountain news i have read in years.
had i been drinking coffee, it'd be all over my keyboard by now.
January 12, 2009
9:27 p.m.
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LOUIE writes:
DENVERB, isn't Lede the town where the statue of "Our Lady of Seven Sorrows" sits, That's quite clever of you! Took me a minute to catch that! That's a good one, thanks! :>)
January 12, 2009
9:33 p.m.
Suggest removal
darkman writes:
I have to agree with many here...the first thought that went through my mind when I heard they were in financial trouble was that I might not have to listen to those awful commercials anymore. I can remember them going back to when I was in junior high school "16 and Glenarm...Security Life Building". Nothing makes me change the station faster than to hear Tom Shane's voice. And I can remember more than a few times where I quickly change the station only to find a Shane Company commercial on the station I switch to...arrrrgh! I have often wondered about their effectiveness-- even though I hated them I figured they must be working if he keeps on doing them.
Diamonds (and most jewelry, to be honest) are something I've never understood...you pay so much to buy a decent one but let's see you try and get anywhere near what you paid for it a day later...they make a new car financed off the lot look like a good investment. Luckily for me my wife was the same-- she put way more money into her AR15 than we paid for her wedding ring. :-)
January 12, 2009
9:39 p.m.
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LS writes:
HankReardon at 4:08: Brilliant!
January 13, 2009
6:06 a.m.
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DakotaPlainsman writes:
Louie,
Those sad stories you hear are the result of mortgaging our future. American society has lived well on debt for too long. People who refinanced their house to live above their means, associated (worked for) people who operated on debt and/or condoned the practice are now paying the price. It will take some time for the country to recognize the real value of things. And with that, some failures will happen. Pay as you go is a lost art. Saving for the future was laughed at not too long ago. In many ways, the Great Depression made America a better country. That which does not kill you, makes you stronger.
January 13, 2009
7:05 a.m.
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LOUIE writes:
Great post DAKOTAPLAINSMAN, I always lived below my means in the most humble of manner, but I don't owe and have significant savings as my wife and I agreed long ago our children and many other things were worth the frugality to build a more secure world for our family. I have been taught to make even greater revenue in bad economic times by a very intelligent man. I have forsaken wages just to aquire not only a family of great success, but to obtain the knowledge that came with them. My loyalty was richly rewarded. Many live far above their means, and now the house is a rumage sale. Some built their house on a rock, others upon the sand, now the water washes over both, and only one will be left standing.
January 13, 2009
10:31 a.m.
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SarahJa9 writes:
Say what you will about ShaneCo, but I like that place. I've always had a pleasant experience shopping there with sales associates who are friendly and don't pressure you. As the commercials may be boring, they have definately served their purpose. I don't know a single person who couldn't recite them, thus knowing the hours and locations of his stores. Good luck, Tom!
January 13, 2009
10:37 a.m.
Suggest removal
mountainman1 writes:
Tom Shane is classic. I've been hearing his commercials in Denver for my whole life! I hope they pull out of this... check out this Denver Blog, it's hilarious! http://alldenver.blogspot.com/2009/01...
January 13, 2009
10:41 a.m.
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dl1011 writes:
Americans seem to be the only ones that buy into the diamond BS.
Way to many blood diamonds/conflict diamonds.
January 13, 2009
11:34 a.m.
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TheDenverB writes:
"DENVERB, isn't Lede the town where the statue of "Our Lady of Seven Sorrows" sits, That's quite clever of you! Took me a minute to catch that! That's a good one, thanks! :>)"
no. the lede is the first line (or sometimes two) of a news story that is meant to catch your attention and get you to read on to the next paragraph (which is usually referred to as the 'nut graph').
but if i unintentionally made some awesome pun and reference that I still fail to understand...then i'll take credit for it as well. :)
January 13, 2009
11:39 a.m.
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COLibertarian writes:
DenverB
You mean Lead? That is what the other fellow was talking about I presume....
January 13, 2009
11:54 a.m.
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COLibertarian writes:
DenverB
Sorry forgot to finish statement. Your spelling is right on. Just not seen as much
January 13, 2009
7:51 p.m.
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HopiMedicineMan writes:
kodijack
What's wrong with short people?
January 16, 2009
12:04 a.m.
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whatsupjay writes:
I hope we can say "good riddance" forever to the worst voice-over "talent" in the Denver market. The list is long, too. Lisa Schomp. The idiot from Ideal home loans. The "we're smart money" guy trying to scam you into buying fix and flip properties (note to that clown...true "smart money" doesn't go around bragging about being smart money). It's a good thing a lot of these people don't have the budgets for advertising on television too. Now, if only those in-bred weirdo's from the Vitamin Cottage ads could go away...