Hallstead Jewelers Essay

Hallstead Jewelers was one of the largest jewellery and indue stores in the United States for 83 years. Customers came from throughout the region to buy from encompassing collections in each department. Any gift from Hallsteads had an extra squirrel away attached to it as they were known for having the best. Even though the principal retail shopping areas shifted two blocks west, Hallsteads reputation and selection still brought in customers. In 1999 however, sales became stagnate and profits were starting to slip. The owners (two sisters, Gretchen and Michaela) made several(prenominal) changes in an effort to revitalize the store back to its full glory. The largest end they made was to move the stores location, expanding it by 50% more space and interchange staff. This move resulted in a five-year lease as well as extensive and expensive renovations.They also made some changes in crossway offerings and offered more sales potential at the cost of minor reductions in margins. Du ring the year it took to complete the Hallsteads renovation the industry started showing major(ip) changes toward internet based jewellery sales. Tiffany & Company, a business with an origin oftentimes like Hallstead Jewelers, grew into an international powerhouse. At the same time, a start-up internet seller, racy Nile, became the second largest diamond seller in the U.S. While Hallsteads was suppuration their fixed costs by doubling their rent payments, Tiffany and Blue Nile were add-on their revenue with virtual storefronts allowing them to increase sales with very little increase in expense. In an effort to explore ideas in strategy that would guide the business to profitability, the sisters compiled some questions for their accountant to analyze using some extra operating statistics.2.0 SIGNIFICANCE OF THE CASEInherited business tradition.Changing in management style.Reduce in sales and profit from year 2003 2004.In 2004, moving stores location, expanding it by 50% more s pace and sellingstaff. great loss in year 2006.Changing in market conduct and growing of new competitors.3.0 CASE SOLUTIONS & ANALYSISQuestion 1 How has the breakeven draw in number of sales tickets (number of customer orders written) and breakeven in sales dollars changed from 2003, to 2004, and to 2006? haw has the margin of safety changed? What caused the changes? The total variable and fixed costs induce been categorised in the following income statement of Hallstead Jewelers Hallstead Jewelers