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Henne Jewelers a rare gem — 4th-generation family business

| Monday, Oct. 29, 2012, 11:02 p.m.
John Henne, CEO of Henne Jewelers in Shadyside poses for a portrait Thursday Oct. 25, 2012 inside the store as it is in the midst of celebrating the 125th anniversary of the family-held company.
James Knox | Pittsburgh Tribune-Review
John Henne, CEO of Henne Jewelers in Shadyside poses for a portrait Thursday Oct. 25, 2012 inside the store as it is in the midst of celebrating the 125th anniversary of the family-held company. James Knox | Pittsburgh Tribune-Review
John Henne, CEO of Henne Jewelers in Shadyside shows off an E. Howard & Co. of Boston pocketwatch that was a gift from his great grandparents to his grandfather on his 21st birthday in 1920 Thursday Oct. 25, 2012 inside the store as it is in the midst of celebrating the 125th anniversary of the family-held company.
James Knox | Pittsburgh Tribune-Review
John Henne, CEO of Henne Jewelers in Shadyside shows off an E. Howard & Co. of Boston pocketwatch that was a gift from his great grandparents to his grandfather on his 21st birthday in 1920 Thursday Oct. 25, 2012 inside the store as it is in the midst of celebrating the 125th anniversary of the family-held company. James Knox | Pittsburgh Tribune-Review
Complimentary rolls of mints are given away Thursday Oct. 25, 2012 inside the Henne Jewelers in Shadyside as it is in the midst of celebrating the 125th anniversary of the family-held company.
James Knox | Pittsburgh Tribune-Review
Complimentary rolls of mints are given away Thursday Oct. 25, 2012 inside the Henne Jewelers in Shadyside as it is in the midst of celebrating the 125th anniversary of the family-held company. James Knox | Pittsburgh Tribune-Review

With his son set in his job at a big public accounting firm, Jack Henne prepared his family jewelry business to be sold in 1987, which was its centennial year.

“I was sentimental about the business,” he said, but not enough to push family members to take over Henne Jewelers as he planned his retirement.

After all, when Henne left the Navy in 1955, he almost took a job managing a home furnishings store instead of going into the jewelry business.

Like his father, son John pivoted from another career path in Pittsburgh and joined the Shadyside business in 1992, making a fourth-generation business, a rarity these days.

As a result, Henne Jewelers is celebrating its 125th anniversary, which it capped with client parties on three nights late this month.

“There was no pressure to join the family business,” said CEO John Henne. “Of course, I did feel pressure, even though my father wasn't exerting it.”

Reaching 125 years is very difficult for any business to do. Staying in business for 20 years is difficult enough, said Henne client Mike McWilliams, owner of two Nissan auto dealerships in the Pittsburgh area.

Just 30 percent of family businesses survive to the second generation, 12 percent to the third and 3 percent to the fourth, according to the Institute for Entrepreneurial Excellence at the University of Pittsburgh's Katz Graduate School of Business.

Family business owners face more pressure than ever — from global competition to taxes and regulatory challenges that make it expensive to do business in Pennsylvania, experts say.

“Obviously, they take care of customers. I know I don't go to any other jeweler,” said McWilliams, soon after buying a Rolex watch recently at Henne in Shadyside.

There are about 22,300 businesses in the United States that sell jewelry, according to the Jewelers Board of Trade, a Warwick, R.I.-based trade association. The industry is fragmented, with independent stores — such as Henne — accounting for nearly half of sales, estimates Russell Shor, senior industry analyst for the Gemological Institute of America, Carlsbad, Calif.

Founder Rudolph Joseph Henne started the company in 1887 in East Liberty. As it was situated in a busy rail corridor, Henne mainly kept train conductors' watches in good repair. In addition to its diamond trade, Henne provided optical services, which was common in those days.

Son Rudolph Gerard Henne took over the business when his father died in 1934. The son guided it through the Great Depression and World War II, before handing it over to Jack Henne. He moved the business to Shadyside in 1978.

John Henne relocated the business to its current space in 2003. On his watch, Henne weathered the Great Recession, the worst economic slump since the one his grandfather faced.

“The recession was really hard on the jewelry industry. Jewelry is the ultimate discretionary purchase,” said Michelle Graff, senior editor of National Jeweler, an online trade publication.

Two of the largest jewelry store chain operators went bankrupt in early 2008, as the recession ground into people's pocketbooks: Whitehall Jewelers Holdings, Chicago, which operated 375 stores in nearly 40 states; and Friedman's Inc., Addison, Texas, which had 475 stores in about 20 states.

“I remember that in March 2009, when the stock market hit bottom, people wouldn't even come in to buy watch batteries,” John Henne said.

The Pittsburgh market, however, seemed to “weather the recession better than other markets,” said Graff.

Even so, Henne's main challenge is “the macro-economic environment,” its CEO said. “If there's uncertainty, people either postpone or stop buying.”

Fast-forward to 2011, when Henne had its best sales year ever, said John Henne. He declined to provide figures, but said sales ranked in the top 1 percent of independent jewelers.

By that measure, Henne racked up at least $10 million in sales in 2011 and fell into “an elite group” of the nation's top 200 or so independent jewelers, according to an email from Kenneth Gassman Jr., who runs the Jewelry Industry Research Institute, Glen Allen, Va.

The key to surviving downturns has been providing high-touch service and “doing right by someone,” John Henne said.

For example, Jack Henne obliged a top clients' request to turn two of his molars into cuff links in the 1960s.

“The independent jewelers who are successfully competing against the chains are the ones offering a superb level of service,” Graff said.

Henne employs a “certified master watchmaker,” who is among expert technicians numbering only about 500 in America because the designation takes years to attain, according to the American Watchmakers-Clockmakers Institute, Harrison, Ohio.

“So, we don't need to send watches to New York, and the turnaround is a lot quicker and less expensive for the customer,” said John Henne, whose store just upgraded its Rolex watch display case last month.

The CEO recalled cleaning Henne's display cases and wrapping packages at age 12 for his father. He cited the warm ties that grew between Henne and customers as a reason to walk away from his CPA days in 1992.

“I thought about staying at KPMG and going on to get my MBA,” said John Henne. “But I saw the personal relationships that developed between friends and family as they celebrated special occasions in life. And I liked the idea of being in the family business.”

Thomas Olson is a staff writer for Trib Total Media. He can be reached a 412-320-7854 or at tolson@tribweb.com.

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