Serial recycler is on to jewelry

After a great success and a number of business failures, serial entrepreneur David Pomije is on to something new. So, he hopes, are his customers.

Be Iced, Pomije's latest retail venture, buys and sells pre-owned fine jewelry, along with some new items. Customers -- mostly divorcees, estate heirs and the fashion-fickle -- are offered a better price for what they're selling if they choose to buy something else in the store.

While a focus on jewelry is new for Pomije, the concept is used.

In 1990, he started Funco Inc., a successful chain of stores in which video-game players could trade in old games and buy new ones. After 10 years, he sold the company to Barnes & Noble for more than $160 million.

But Pomije's next project wasn't nearly as charmed. He was an early investor in a "pre-swung" golf supplies store called 2nd Swing in the late 1990s. The unexpected death of its CEO and an overambitious expansion plan led the 50-store chain into bankruptcy last year. The store was reincarnated as the New 2nd Swing by members of the founding team, minus Pomije, early this year.

Pomije's early ventures in the 1980s included a travel club for golf enthusiasts, later dissolved, and a mail-order reseller of Commodore computers, which ended in Chapter 11.

But even before the demise of 2nd Swing, Pomije had high hopes for Be Iced, which opened in Edina in October 2005.

The store not only sells a product, it provides a service to those who want to monetize a memory.

"Usually when you get jewelry, it's tied to a memory," said Pomije, who owns about half of the company. "They want to get rid of those memories.

"Most of those people would not be caught dead in a pawn shop," he added.

Fine jewelry is a good candidate for the buy/sell/trade model, because it has a large "after market," Pomije said. But unlike video games and golf clubs, gold and silver can be melted down and recast, leaving the company less at the mercy of its inventory, said Duane Wermerskirchen, president of Be Iced.

A childhood friend of Pomije's, Wermerskirchen was an independent jeweler in Shakopee for 25 years. He became president of Be Iced in 2006 and closed his store, Real Gem, this month to concentrate on the new company.

Pomije also brought in Jeff Gatesmith, who held executive positions at Funco and 2nd Swing, to head up operations for Be Iced. Before Funco, Gatesmith held management positions in human resources and retail operations at the U.S. division of Henry Birks & Sons, a Canada-based fine jewelry retailer.

Pomije said the Edina store became profitable in less than 18 months, but declined to disclose sales figures.

A second Be Iced opened Wednesday in Springfield, Ill., marking the beginning of what company executives hope will be a nationwide rollout over the next several years.

Their expansion plan is simple, quick and efficient. They identify jewelry stores with strong sales records -- around $2 million annually -- whose owners would like to retire or can no longer support their businesses, and they offer to buy everything but the name and inventory. Pomije said he thinks the U.S. fine jewelry market could support 500 Be Iced stores.

"We have found a way that we can achieve expansion faster and more efficient[ly] by finding locations across the country that are financially distressed," Wermerskirchen said.

In 2005, the company raised $1.2 million, mostly from private investors, including Pomije. It's in the process of raising another $1.2 million and will seek more capital after demonstrating that the concept works in other places, Pomije said.

Johnathon Mechem of St. Francis, Minn., visited Be Iced last week to see how much he could get for an unused engagement ring. He was offered $125, or $250 in store credit, a better return than the $20 quote he got from a pawn shop.

"I've been looking to get rid of it for a while," said Mechem, 26, who seemed somewhat out of place in the store.

The pale blue carpet, cream-colored walls and scent of perfume signaled the store's inclination toward female customers.

Although half of the Edina showroom is filled with new jewelry, store manager Keith Rosenblum said his customers, who are mostly women, tend to gravitate toward the pre-owned merchandise.

"I think Minnesota loves a garage sale and a flea market," he said. "They like the idea of going through and finding that perfect gem."

David Pomije, who founded Funcoland, has started Be Iced, a business that sells and trades new and used jewelry. There is one store in Edina, and a second one opened Wednesday in Springfield, Ill.
Source: startribune