Diamonds in the rough – Real estate, jewelry, and more with Louis Asbury
Chris Ressa 00:02
Welcome to retail retold everyone. Today I’m joined by Lewis Asbury. Lewis is the head of real estate for diamonds direct. He’s a pioneer in the industry, but he’s become a friend. I’m excited for him to be here. Welcome to the show us.
Louis Asbury 00:18
Thank you, Chris. How you doing, buddy?
Chris Ressa 00:22
I’m doing great. Doing great. I wish I was eating. I was able to frequent omakase restaurants a little bit more, but other than that. For those who don’t know, Louis and I ate omakase at the New York ICSC during the New York ICSC event. It was pretty cool.
Louis Asbury 00:42
Yeah. I hope that becomes our annual tradition, Chris,
Chris Ressa 00:45
For sure, that spot’s good So Louis, why don’t you tell everybody a little bit more about who you are and what you do?
Louis Asbury 00:54
Yeah, buddy. Lewis Asbury, I’m the vice president of real estate for Diamonds Direct. I’ve been with the company now for seven and a half years. So it’s been a real fun ride. And excited to see where everything goes from here. I think we have a lot of runway ahead of us still. So I’m also going on my second year as the chair for the Carolina’s for ICSC. So you and I share and commiserate our efforts on the volunteer front with ICSC as well.
Chris Ressa 01:34
For sure, so let’s let’s pick up what’d you do before diamonds direct.
Louis Asbury 01:41
So before diamonds, I guess we’ll kind of go chronologically, I got my start in real estate at a school as a commercial real estate broker. I started in January of 2008. So it was the right time and the wrong time, on so many levels. The right time, because you kind of had to bootstrap it and learn a lot of hard lessons quickly. I think that that gave me some grit and perseverance that I think is an innate quality you have to have in this industry.
So yeah, started out doing that I leased shopping centers and repped some tenants along the way and was a broker for eight years, and then went to the corporate side, I had a three year stint with Save A Lot food stores, doing their development in the southeast. At the time, they were pretty ramped up on new store development and it was a great experience. It was a phenomenal real estate team. And they had a great just development model worked really well. But unfortunately, things kind of took a turn with them, they actually stopped their corporate store development after I left and got out of that business altogether.
But luckily for me, I got connected with a recruiter who introduced me to this job with Diamonds Direct. And I jumped all over it. Diamonds Direct is headquartered here in Charlotte. I’m from Charlotte. And it was just a wonderful opportunity.
So I think a lots in the name, but what is diamonds direct? For those who don’t know?
Louis Asbury 03:35
Yeah, hopefully more people will know. We’re growing pretty rapidly relative to the size of our company, which is really exciting. But you know, I would categorize us as a bit of an innovator disrupter to the jewelry business, we operate kind of a mega-store format, or big stores 6000 square feet. And we typically only do one or two in a given Metro. So we have a big draw our trade areas are capturing north of a million people. And because of that our our business model is a little different you know, our expectations are that these stores will do you know 10x Of what typical mall jeweler will do you know, some of our locations are pushing Apple store numbers if you can believe that.
So it’s it’s definitely a mega-store format. We’re heavily focused on the bridal category, so about 85% of our business is engagement rings and wedding bands and loose diamonds. You know, to get into kind of the origin story of the busines. It’s kind of a really cool story actually. So the business was started by an Israeli family that had a diamond cutting facility in Israel, so they were manufacturing diamonds and wholesaling to other jewelers up and down the East Coast. So the business in America started as a wholesaler and that eventually converted to a direct to consumer retail model with the first store being in Charlotte, and then it kind of grew from there. So, fast forward to about 2015 we were six locations in the family sold to Blackstone.
So Blackstone Group, specifically their tactical Opportunities Fund, acquired the business and at the time, there was not a real estate function internally. So I had the immense pleasure and honor of coming on board and starting the real estate function in essence from scratch, I mean, the guys were doing some really spectacular work, just without somebody full-time doing it. So it was a really pivotal point for the company, to get the guidance of Blackstone on board, and that fueled our growth, we went from six stores to about 25 2016, through 2021. And that’s when we were sold to Signet.
So Blackstone does what they do, and they grew the company and made a multiple on their investment. And Signet acquired us in 2021. And that’s been a great couple of years so far, they’ve really let us remain somewhat autonomous, and also lean on them for the best practices and synergies that you get from a larger company so it’s been great with them and we’re continuing to grow at a pretty, pretty steady clip we’re 30 stores now with another five in the pipeline for next year.
Chris Ressa 07:14
That is fascinating story. Thank you for taking us through all of that I think everyone will be you know, I think everyone learned a lot from that because I think a lot of that most people didn’t know even if they’re familiar with Diamonds Direct. So, talk to us about the real estate, you call it a mega-store. How big is it? And where are you typically, you know, putting these locations? Where are they today?
Louis Asbury 07:42
Yeah, so our footprint is typically about 6000 square feet. And we typically locate in freestanding locations that are approximate if not in front of the dominant retail luxury destination in a market. So historically for us, the kind of the first tranche of stores were in the southeast. So in by example, in Charlotte, we’re across from South Park Mall, we’re in the domain in Austin, we’re in front of Crabtree mall in Raleigh, so on and so forth.
So we’ve tried to replicate that model across the country. It requires us to be extremely opportunistic, you can’t just say, hey, I want to be at The Woodlands in Houston. And then magically, there’s a pad right out in front or across the street, as we’ll talk about later, right.
Chris Ressa 08:47
I think that was great color. So if I walk into a diamonds direct, versus some of the other national jewelry stores, what is the biggest difference I’m going to see when I walk into diamonds direct.
Louis Asbury 09:09
I think that that ultimately boils down to the customer experience. I think we have gone to painstaking strides to make a better customer experience. And I say that and I mean that in a number of ways. So if you think about buying an engagement ring, it’s an extremely emotional purchase. And it’s for the average consumer, a very large purchase, if not one of the biggest purchases you’re going to make at the time. And it’s very confusing. I don’t know. If you went through that process?
Chris Ressa 09:55
I totally did. I was like trying to learn everything about I could I was I couldn’t believe there was So much to a diamond that was mind blowing.
Louis Asbury 10:02
yeah. So you got the cut and the color and the clarity and the size and all these things that it’s a bit overwhelming, right. So I think the founders of our company recognized an opportunity to empower the customer, to educate them, to make them feel comfortable in a shopping environment and not overwhelmed. To come into a store, knowing that, you know, we’re gonna fight to give you the best price in the market. But another big component, I think, to our stores that set us apart is the inventory.
So if you walk into a typical jeweler, and you have a budget, and you know, a size of a stone in mind, for example, historically, you know, maybe they only have a couple of options to show you. And then you have to perhaps wait a couple of days for them to get another item in stock. Because we’re so large, and we own all of our inventory and we have such big stores, you can come in typically to our stores and we’ll have limitless options, so to speak, for you to look at, to touch and feel, which is such a critical component to buying something of this nature. So I think that by having the options that are tangible on there it empowers the customer to make that purchase, and make it in person, then and there. Knowing that they’re getting a really good value.
You know if they’ve shopped other places, and typically they can see that we’re providing extraordinary value, and then it goes beyond the sale. So, one of the things that I think is unique to us, we offer 110% trade-in value on your diamonds. So if you ever wanted to upgrade your wife’s stone, so Chris, if you want to come to me in a year or two and get a four carat for your wife, if you had bought it from diamonds direct we’ll give you 110% of that value. And I think that really stands behind the product.
Chris Ressa 12:19
That’s really interesting yeah. Okay, well, that was really helpful. On you, Diamonds Direct. Generally speaking right now, what’s the jewelry business just like by and large, like what’s going on in jewelry? You know, it’s a retail category. You see all these, whenever you see, retail sales and reports go out, you know, I don’t think they talk about jewelry enough. But I think it’s a pretty good indicator, actually. So what’s going on in jewelry.
Louis Asbury 12:53
So it’s been an interesting couple of years, I think for us all coming out of COVID. We’ve seen a wide array of things happen in the marketplace and the jewelry business has been particularly interesting in you know, I guess I’ll start my response with what happened as a result of COVID. So, discretionary spending changed, people did not go on their vacations, or take that anniversary trip, or, you know, they weren’t spending, you know, hundreds of dollars a month on going out to eat. So we felt that, that shift in consumer behavior, and it translated into an enormous lift in sales for us, you go buy that tennis bracelet instead of going on the anniversary trip, for example.
So, we rode the coattails of that through 2021 and 2022. But another interesting thing happened with COVID. The things that lead to engagement, were not occurring, people were not going out on dates, or having that first interaction at a bar or whatever the social event may have been. So we felt a bit of a lag of those engagements coming out of COVID that kind of softened sales a little bit over the past, you know, 18 months or so. So, you know, it’s been kind of an up and down, but things are tracking on the way back up again, which is good, you know, return to normalcy is what we’re seeing and expecting into 2024
Chris Ressa 14:44
I hadn’t heard that terminology before things that lead to engagement. That’s a good indicator, I’m sure for you guys. Yeah. And they seem to be starting to happen now. For sure, though.
Louis Asbury 14:55
Chris Ressa 14:57
Yeah. All right. Let’s take a break from all that. Let’s get everyone to know Lewis a little bit more, are you ready?
Louis Asbury 15:09
Yeah, do your worst.
Chris Ressa 15:11
All right. Question one. What is one skill you don’t possess but wish you did
Louis Asbury 15:25
one skill I don’t possess but wish that I did.
Chris Ressa 15:29
Or wish you wish it was a little you were a little better at
Louis Asbury 15:37
think it’s kind of implied for us all I’d like to be a better person, a better husband and better father, all those things. But selfishly in in a bit silly, I’d like to be a faster bike rider. So
Chris Ressa 15:57
I think you should tell everyone about that. Because, you sent me some photos of when you were in Vegas, and you were riding, and you were going like 45 miles an hour as you’re taking pictures, which was fascinating. So tell everybody about your bike riding.
Louis Asbury 16:15
Over the past couple of years, I’ve developed into a very solid, middle of the pack bike rider, but it’s a hobby and passion of mine I ride. You know, last year I rode 7500 miles. So it’s, it’s time consuming, but I don’t know, I’d really like to know what it would be like to be at the pointy end of a race and to get on a podium one day, but I think I have some genetic limitations that will keep me from doing that and I’m okay with that, but in general, I like the, the process goals around training and, you know, the mental gymnastics of, you know, trying to figure out how to get stronger.
And I think that that kind of parallels with professional life too, and helps me kind of process life. I mean, you don’t get successful overnight. It’s a process, and I enjoy pushing the boundaries and seeing where it’ll go next, and trying to break through those things. So, personally and professionally.
Chris Ressa 17:30
Well, that’s incredible. So how did you fall into bike riding
Louis Asbury 17:38
It’s one of those COVID hobbies, got a bike during COVID and started riding and realized it was a good outlet for my energy and somewhat of a meditative space. You know, I’ve never been fit my whole life, I’ve just kind of been a lazy dude. So I got bit by the bug, and it’s been great.
Chris Ressa 18:04
That’s really cool, so how many miles you’re riding a week?
Louis Asbury 18:13
Last year that came out to about 140 a week so, 20 a day.
Chris Ressa 18:20
20 a day, and riding 20 Miles that’s how many hours?
Louis Asbury 18:26
hourish? Yeah, hourish.
Chris Ressa 18:29
Wow. You changing the routes all the time?
Louis Asbury 18:33
Yeah, unfortunately in the winter, I do a lot of it in the garage on a trainer. You know, my father lives about 30 minutes from Pisgah National Forest. So I get out in the wilderness from time to time and try to enjoy that.
Chris Ressa 18:50
That’s really cool. So on a trainer indoors, what type of trainer, what trainer are you on?
Louis Asbury 18:58
So it’s just a contraption you hook your bike up to, and it’s stationary but it gives you resistance, and you know, I have an app called Zwift that you can plug into and it’s like a virtual riding world that kind of gamifies the boredom of being stuck in your garage
Chris Ressa 19:18
That contraption, how similar or dissimilar is that to like peloton?
Louis Asbury 19:27
Well, it’s the same concept. We have a peloton, my wife lives on that thing, she’s much faster than me, by the way. So, that’s part of my aspiration is just to keep up with her. It’s the same concept.
Chris Ressa 19:40
Same concept, you ever go on the Peloton?
Louis Asbury 19:46
Every now and then. If I’m at a hotel when I travel and they have it.
Chris Ressa 19:50
Not a fan?
Louis Asbury 19:55
I like it. It’s not bad. I just can’t get comfortable on a peloton. It just doesn’t fit me like my bicycle does.
Chris Ressa 20:03
Got it, alright.
Louis Asbury 20:05
Yeah, we’ve gone way too deep on this, we went down the rabbit hole.
Chris Ressa 20:10
Fascinating. All right, next question, we’ve gone deep. When is the last time you tried something for the first time?
Louis Asbury 20:25
Excuse me, I’m eating ice. Last time I tried something for the first time. So, I got an espresso machine for Christmas. So I guess I recently made espresso.
Chris Ressa 20:45
Are you into it now?
Louis Asbury 20:46
I am, I never thought I would be. You know, it was one of those things. My wife got me an espresso maker, I said well that’s great, I don’t drink espresso. Fast forward a couple weeks, and I made a double latte with foam about an hour ago for my mid-afternoon treat.
Chris Ressa 21:09
So I’m not a toy person, per se, but my dad, especially like in the electronics world. He told me he came up for Christmas. He lives in Florida. He came up and he said I got you a little bit of a toy for Christmas. I said okay, so he got me the Ray-Bans the smart sunglasses.
Louis Asbury 21:28
I’m not familiar.
Chris Ressa 21:30
I’ve been talking to people through my sunglasses, it takes videos, pictures, you can go on the internet through your sunglasses. It’s fascinating. So I’ve been playing around with that.
Louis Asbury 21:43
I’ll never be as cool as Chris Ressa. Oh my gosh.
Chris Ressa 21:48
Yeah, they’re really, it’s crazy. The setup was literally like three minutes you put them on all sudden, you can call people on your sunglasses.
Louis Asbury 21:57
Chris Ressa 21:58
It is wild.
Louis Asbury 21:59
What will they think of next, Chris?
Chris Ressa 22:01
I don’t know. What’s I always think about like, if this is what’s commercial? What’s like the government got that’s not commercial. If this is commercial, if I could do this, it’s probably crazy.
Louis Asbury 22:15
And we don’t want to know,
Chris Ressa 22:16
Oh, we don’t want to know. Okay. Last question. What is one thing most people agree with that you do not?
Louis Asbury 22:27
Like a hot take?
Chris Ressa 22:29
Louis Asbury 22:30
Okay[JA1] , I’ll probably make more enemies than friends but I’m just going to go ahead and say it. Somebody needs to say it, Chris. I’m not 100% sold on Pickleball. I think 2024 may be the year we’ve reached peak pickleball.
Chris Ressa 22:50
Louis Asbury 22:51
I think it’s a cool sport, but it seems like they’re popping up these entertainment pickleball facilities all over the place, you might have to abstain, because I bet you have a dozen in your portfolio already.
Chris Ressa 23:04
We did one. We tried one it we’re trying it out. We gotta get it open. A lot of these, there’s so many concepts. And when you dig in, they all have like three open, not a lot have like, no one has like 100 open yet. So as a landlord, you’re taking some shots. So we’re taking a shot on one, we think it’ll be good, but it is definitely, to your point, there’s some risk behind it.
Louis Asbury 23:29
I’m sure some of the concepts will be enduring. But if you look at that kind of sports, entertainment space, it’s already pretty crowded. You know, you’ve got top golf and puttery, and you know, all these other things that people can go and entertain themselves with. It’ll be interesting to see how it all plays out. And I know it’s the fastest growing sport in America. But I just want to remind you that in the 1990s, the fastest growing sport in America was rollerblading.
Chris Ressa 24:00
Wow, is that true?
Louis Asbury 24:02
And look what happened, yeah.
Chris Ressa 24:04
Wow. That is, you know, I’m mind-blown right now.
Louis Asbury 24:11
So maybe if these don’t work out, you and I can open up rollerblading rinks, we’ll backfill em. We’ll bring it back.
Chris Ressa 24:20
I’m like, you just put me on my heels. Wow. Okay. So, all right. Well, thank you for indulging. Let’s move on to one of the last parts of the show, let’s move on to a story. So Louis, we had the good fortune to work on a deal together store that’s going to be opening soon. Why don’t you tell us about Diamonds Direct in The Woodlands?
Louis Asbury 24:46
Yeah. Like you said coming soon. And I don’t think we can really talk about that deal until we talk about the side deal that occurred at ICSC. When we first started negotiating this, Chris and I sat down and said, Chris we’ll do this deal, but if we get it done, you got to have me on your podcast. You’ve held true to your word. And this is the high watermark of my career now. I’ve made it, I’ve officially made it. So Woodlands goes back a couple years before you and I had that meeting at ICSC. I think that was in 2021.
Chris Ressa 25:35
Louis Asbury 25:36
The first ICSC back from COVID.
Chris Ressa 25:40
Louis Asbury 25:41
Which is kind of crazy to think about now. But you know, we, we started working on Woodlands as far back as like 2019. And I think this really speaks to, how important timing is relative to opportunities in real estate. And most of the time the two of them line up pretty well with our development goals. And woodlands did not surprisingly, but Diamonds Direct has a big presence in Texas. You know, we’re in Austin, we’ve got you know, two in Dallas, two in Houston, and San Antonio. So we love Texas, people spend money like it’s a professional sport there.
Translates to a lot of big shiny diamonds going out the door for us. So, it’s always been an intent focus for us to build out the Texas market. We had a very successful opening in Houston by the Galleria that exceeded everybody’s expectations. So I teed up another deal in Baybrook by Baybrook mall with Brookfield. And you know, we were trying to crack the Woodlands. And I had back in 2018. This amazing site, and I said guys, if we ever want to do Woodlands, here it is. Oh, no, no, we’re not ready for it. But we’ll, we’ll get back to you and you know, and that deal came and went. So, fast forward to, you know, 2019. Louis, where’s the real estate? Well, I don’t have it anymore. 2020, where is it, I don’t have it.
So got into a bit of a scramble, because we really needed to make our commitment for our third in Houston. It’s a huge market. You know over 6 million people. And we’ve kind of exhausted all the opportunities and validated everything that we could and nothing just made sense in and around the Woodlands mall. And then we found this shopping center, Woodridge, and it fronts the interstate. And I saw it and I said you know, that might work. It has the exposure. Its got great visibility. Its real close to the mall. And at the time, we contacted that property owner, Crow Holdings, I believe.
Chris Ressa 28:19
Louis Asbury 28:20
And went back and forth with them couldn’t really figure anything out. And in the middle of that conversation, they came back and said we’re selling the shopping center. Great, we’ll never get anything done now. We’re selling it to DLC. And I think this is the classic story of you know, the connections and the relationship business that we’re in. You and I had met a couple years prior, I think just a random connection at ICSC.
Chris Ressa 28:56
Louis Asbury 28:57
And you know, so I got the news that DLC was under contract and I said you know what? Call Chris. We’re gonna make a deal. And I gave you a call and I said, Chris, how would you like to have an instant added NOI to your new shopping center? Because I want to be there carve me out a pad and we got right to work right.
Chris Ressa 29:20
We got right to work yeah. We met at this show, and we started moving things, and we closed on the shopping center and to your point shortly after closing we had NOI that wasn’t there prior which was obviously really amazing. And, I think you know I learned a lot in the process because you know we hadn’t done a Diamonds Direct deal. I learned a lot about your guys company.
How you guys look at real estate and it was super educational and I think we got to a deal that everyone thought worked, and it’s going to be a stellar location. And you know, I love the real estate and one of the reasons that we were interested in the property is because, you know, it’s like, I don’t know, 3000 linear feet fronting the actual interstate, across from the, you know, the woodlands, which is just, you know, pretty, irreplaceable dirt in my opinion. And you know, that creates opportunities like Diamonds Direct. So super excited. It was great to work with you is really interesting. I didn’t know that backstory of 2018 and that you ended up excuse me that you had a deal that went away? Who is in that location now?
Louis Asbury 30:55
Chase Bank ultimately acquired the property that we had initially looked at, but we just weren’t ready to commit to the market. You know, Chase is very active all over the country right now and I often back into them when hunting for real estate.
Chris Ressa 31:15
Got it? You guys are fishing in the same waters?
Louis Asbury 31:19
Yeah definitely. Definitely. But it all worked out for the better, I think we have a phenomenal location, the visibility to the interstate is unmatched. And when you’re a regional player like us, having that billboard presence, I think is one of the most important attributes you can look for in real estate. So, we’re really excited about that one. It was you know wasn’t easy it never is but creating a pad where there isn’t one had it set of challenges, right? And you guys were doing a ton of work and moving a lot of things around to make that happen. So appreciate the creativity on your end as well.
Chris Ressa 32:04
Thanks. Well, it was it’s been great can’t wait to see it when it opens and now we have this unbelievable annual sushi event that we go to which is fantastic.
Louis Asbury 32:18
Yeah, its awesome
Chris Ressa 32:21
Alright Louis, It is Friday. Let’s go to the last part of the show called retail wisdom. I got three questions for you are you ready?
Louis Asbury 32:30
Let’s do it.
Chris Ressa 32:32
All right, question one. What extinct retailer do you wish would come back from the dead
Louis Asbury 32:41
Not a specific retailer but a concept. Well let me back up and say I asked my wife this question and I think her response merited bringing it up but she said The Nature Company and I thought that that was a really good one. I had forgotten about them but my personal one is more of a concept and that’s the pharmacy with the lunch counter, I have such fond memories as a kid of going and eating lunch at a lunch counter and it’s a concept that all but disappeared, and I think it’s it’s just ironic because everything’s turned so experiential, and you see, you know, retailers bringing in a food component to their concept and I just wish that would come back but it probably won’t.
Chris Ressa 32:57
Yeah What was old will once again be new you watch.
Louis Asbury 33:39
Chris Ressa 33:43
Rollerblading, that is going to stick with me, you might see that in a LinkedIn post I might have to quote you. What? What is the last item, question two, what is the last item over $20 You bought in a store?
Louis Asbury 33:59
Well, we just got out of Christmas. So, the last purchase that I think is worth talking about is I got my wife a pebble icemaker. So, she would go to Chick fil A and buy bags of their ice to have at the house, you know, the little tiny pieces of ice, and GE makes a pebble icemaker. So now we have one in our garage and that was the last memorable purchase.
Chris Ressa 34:32
Is it is it manual or did you have to hook it up to like your water?
Louis Asbury 34:38
It comes with a little side reservoir that you fill up, and it makes the ice from that and as the ice melts it recirculates and makes more ice, it’s a phenomenal thing if you like pebble ice, go get one.
Chris Ressa 34:54
Got it, and last question. If you and I were shopping at Target, and I lost you, what aisle would I find you in?
Louis Asbury 35:08
I think I’d be in the toy section. Not for me personally, but for my kids. And as you know, my son is an avid collector of sports cards right now. So I’d probably be dashing over there trying to find a pack of football cards or soccer cards or something like that.
Chris Ressa 35:25
Yeah, they have. They got boxes and packs at Target. Well Louis, this has been fantastic, thank you so much for coming on. I really appreciate it. And I have to now look into a pebble icemaker.
Louis Asbury 35:42
What have I done? Oh, man. Thank you, Chris. I appreciate you. All right.