Felix Porcaro’s Crimzon Rose has expanded into an industry giant, servicing retailers’ growing private brand needs and adding Erica Lyons, another jewel to its crown.
At this stage in the game, most chief executive officers would be relaxing every once in a while on the golf course. And with sales estimated at more than $100 million and growing, a 24/7 factory operation in China that churns out fashion jewelry for nearly every major retailer, and a red-hot department store brand under his belt, Felix Porcaro, CEO, president and founder of Crimzon Rose, probably deserves a few rounds. But you’ll never find Porcaro puttering around a green.
“This is my golf,” says Porcaro, waving his hand around the soon-to-be-completed expanded Erica Lyons showroom in Manhattan. “Jewelry is my hobby. I am constantly thinking about it, going through magazines, tearing out pages and looking for what’s next. Work is my fun.”
And you can believe that there’s plenty of work to be done. When he’s not working with his wife, children and dog in his North Providence, Rhode Island-headquarters along with more than 300 employees, he might be heading to one of this four facilities in China where125 employees supervise manufacturing, distribution and quality control for jewelry and hair accessories shipped out to nearly every retail channel. Or he may be down on one of his monthly trips to Erica Lyons, the Miami-based department and specialty store brand that Crimzon Rose acquired in 2009, and has continued to successfully expand.
Porcaro started Crimzon Rose in 2001 to address the increasing demand from retailers for timely private-label fashion jewelry. His first retail customer was Kmart, which had been looking to reinvigorate its fashion jewelry business. Porcaro pitched Kmart on a program. “They flipped when they saw it, asking me ‘How fast can you ship it?’”
Three years later, Crimzon Rose was producing almost all of Kmart’s fashion jewelry including those under leading brands like Jaclyn Smith.
Meanwhile, Porcaro continued to expand his private label business, one he based on a simple premise: get the jewelry in the door, see what sells and chase it by replenishing merchandise quickly. “We aren’t the cheapest out there but we can ship and get timing right,” Porcaro says.
To accomplish that, he built up Crimzon Rose’s manufacturing capacity in China along with acquiring companies along the way that served different retail channels.
For instance, he bought Elements, a jewelry and hair accessories company that targeted smaller specialty stores, a channel his company didn’t yet address. Later he bought back the jewelry division of Foster Grant, a brand he had helped resuscitate at AAI, which layered in more major mid-tier and mass merchants.
The Erica Lyons acquisition gave Crimzon Rose department store distribution and its only branded business. While the Erica Lyons brand and its founder Susan Lyons continue to develop their own collections separately, Crimzon Rose helps with operational support and backing. To that end, Erica Lyons rolled out 268 shop-in-shop concepts at Bon Ton stores, creating one of the largest branded statements in fashion jewelry.
Porcaro also invested heavily in his own operations in China, using business connections cultivated since the ’70s. That investment in his own operations paid off, as Crimzon Rose consolidated facilities in China’s free zone, warehousing merchandise for shipment and establishing a quality control system so effective that some of his biggest retail clients asked him for advice on their QC systems.
Even before more stringent lead and other materials testing laws fully went into effect, Crimzon Rose had inspected and certified that its jewelry and components were lead free. Furthermore, tests and quality control continues through four more phases, even right up to being received in Rhode Island where all shipments are checked again.
Porcaro also invested in people, from his Chinese workers—some of whom email and call him at midnight (their time)—to building up his creative teams of designers, model makers, graphic artists, etc. Crimzon Rose has 35 based in Rhode Island that work solely on Crimzon Rose product, another 22 in Miami that work for Erica Lyons and more recently, a four-person Manhattan-based design studio which he plans to expand.
Every month all “the pieces of the company puzzle” meet and go over what sold, what missed, what are the sleepers, etc. “Our analysts tells us what’s up, what’s down. Our philosophy is to bring the trend, get a reading on it, and then reorder to fulfill on them.”
Crimzon Rose can get emerging trend merchandise from China to its U.S. retail doors in 10 days. “Sometimes the jewelry gets made faster than we can ticket and card it,” he adds. Today, Crimzon Rose probably ships more jewelry units than any other company in North America, if not the world.
“Our team is very hands on. They track what’s happening on the runways, all the European shows, and shop all over the place. Innovation is what keeps the business moving and we encourage direction from all sources, from footwear to handbag hardware. When we saw brown plate uptrending, we immediately examined ‘how does this trend translate to our other retailers?’ The Erica Lyons team does the same, making sure the brand and styles stay true to its Sunbelt roots.”
This ability to find and exploit trends helps Crimzon Rose ensure success, often working directly with retailers’ product development divisions. “I’d say that we push back on 80% of our orders—not because we can’t produce it, but because we encourage the retailer to bring in a trend, analyze how it performs and then we back it up with quick reorders. It’s the ‘sit and get’ philosophy—much better than having too many markdowns. We’re deeply involved in our clients’ businesses. We don’t take on programs we can’t handle.”
Such hands-on management proved valuable during the Great Recession—when U.S. retail was hit with its worst sales in many decades. “We had an analyst report every Monday as retailers cut inventory, reduced orders. We all waited for the bomb to drop, and it never did! Instead retailers came back to us saying they underestimated demand and needed product right away.”
Since Crimzon Rose is set up to respond to trends, the company posted one of its best years ever in 2008-2009. “My father used to say that fashion jewelry is recession proof. When women can’t afford a big ticket item, they can still afford a pair of earrings,” Porcaro adds.
As gasoline prices edge upward to $4 gallon, Porcaro’s analysts are closely watching how gas price increases might affect jewelry retails. So far, the effect has been minimal. “There are overall trends we see this year: less emphasis on beads and more on metal. Necklaces are still a leading classification but rings and bracelets are on fire.
Just as Crimzon Rose is always on the move—chasing trends or pushing uptrending product through its pipeline—so is Porcaro. He admits to “going out and kicking the tires” for another possible acquisition.
“In the beginning, the acquisitions were easy. They were strategic and we added another retail channel to our business. Now that we basically have every retail channel save the upper-end, the next acquisition would have to be something that adds to the overall and has a reason to exist. We’re being especially careful about what might be next.”
One thing remains for sure, though. Felix Porcaro won’t be walking any golf greens anytime soon.