Steven Zale, Chairman Emeritus of Zalemark Holding Company, Inc. (ZMRK: OTC US), talks with the Opportunist’s Managing Editor Leslie Stone about his company’s new product designs and his recently launched Hispanic shopping network.
Steven Zale is what some might call a visionary. Known for his cutting-edge jewelry designs that push the envelope, he prides himself on discovering opportunities and untapped markets that others might easily overlook. He was the first designer to pair black and white diamonds, a move for which he says he was widely criticized. “I decided I was going to do something kind of daring, so I decided to put black diamonds and white diamonds together in jewelry,” he explains. “I came up with some designs and was interviewed by many industry magazines that said I was probably the worst designer they ever met and that I had no future. Everyone at the time thought the idea of putting black and white together was ridiculous and that I was devaluing the piece because white diamonds are high quality and very expensive and black diamonds are lesser quality and less expensive. They thought I was out of my mind, but I liked the stark contrast—it was my vision—and I would put it in 18 carat gold with an expensive mounting.”
Zale says the industry eventually caught on. “All the big Indian companies started manufacturing this, and once the trend caught on everybody jumped on the bandwagon. I went from moron to visionary. Or I would say inept designer to visionary—but the visionary doesn’t make the money.”
Zalemark Holdings Company, which Zale founded in 2003, is a Sherman Oaks, Calif.-based product branding company that designs, develops, manufactures and markets branded products through its extensively-developed distribution channels with a special emphasis on celebrity-endorsed products. “My vision was to create a jewelry company to expedite creating a jewelry brand category for all brands, celebrities, and designers,” he says. “Our current focus is the luxury goods market, but we are exploring other categories where we can aggressively apply our expertise.”
Opportunist: Steven, we understand you have been designing fine jewelry for 30 years. How did you get into jewelry design?
Steven Zale: I got my start at Zales Jewelry—beginning in a lowly, basic position as sales associate and working my way up into management. The story goes back to my college days in California. I was partying a lot and my father said: ‘If you’re going to party I’m no longer supporting you … either you get the grades or you’ll be cut off.’ So he called his relatives and arranged for me to get a job at Zales in North Hollywood. I went in there thinking I would have some executive position and they took me into the back room and informed me that I was the head janitor! At that time Zales sold plates and giftware and things, and my job was to clean the warehouse and polish silver. So I would say that I had high expectations but got a humble awakening.
I kept an eye on the sales floor and volunteered to help the salespeople whenever they were busy and I kind of got into it and became quite a good salesman. I never knew I had this capability, but I really enjoyed working with a lot of the young couples who were getting engaged and coming in for bridal jewelry. I would help them with their selection and a few of the customers said they would spend more money if they could make their rings a little bit different. So I did some rudimentary sketching and customizing, and I got such a positive response that it drew me into designing. I eventually became an assistant of an assistant of a sales associate—possibly the lowest position you could find—and started selling and getting attention. Then I was promoted to salesperson—another lowly position—and started getting bigger and bigger sales and customers were referred to me. I was generating a small following, and rather than spending $1,200 or $1,500 customers were spending five, 10, 15 or 20 thousand dollars on sets I designed for them. I felt a natural affinity towards helping design customers’ wedding rings and then migrated into diamond fashion jewelry. I loved creating pieces for customers who wore and adored my designs. From that point, I self-taught myself design basics.
Another milestone for me was when I entered a contest by De Beers. They were soliciting designers to submit their designs, so I submitted mine and won. They flew me to New York and gave me a check for $5,000. That was about 35 years ago, and it just kind of incentivized me to push on. After that I started to rapidly advance in sales and became top diamond seller and top store producer. They gave me my own store and I became lecturing manager about turnaround and sales and I it was just so enjoyable that I didn’t think of it as a job anymore.
Since then I have been named the Forbes Best Designer of the Year by Forbes magazine and have won several other De Beers design awards.
Opportunist: You are known for creating designs that ‘make a statement.’ Can you tell us a little about your design process?
Steven Zale: I had a talent to articulate designs that captured the brand image by not using basic methodology and pushed the envelope, so to speak, to make designs more daring and cutting edge. Those designs were then able to stand on their own concept and capture the consumer’s attention and were well received.
Opportunist: Please tell us about your various products and brands, including your celebrity-endorsed collections.
Steven Zale: I have worked with such designers as the famous Red Carpet designer Badgley Mischka, and developed bridal and fashion couture lines. We took a license for Badgley Mischka and designed a beautiful bridal line and fashion jewelry line all out of 18 carat diamonds. It was gorgeous, very couture and upscale, and it appeared on runways in New York and we promoted the brand all over the world. It wasn’t the most successful of business ventures but it was one of the most exquisitely executed examples of how to take wedding dress designs and articulate them into a beautifully executed jewelry design—from packing to quality of merchandise—while upholding every aspect of a brand’s integrity.
I created the brand Demeter® in association with supermodel Rachel Hunter. Demeter is for the Greek goddess of the harvest. Rachel is not only a jewelry collector but we shared a vision on what this beautiful diamond and colored stone in 18 carat should look like. So we built it and sold it and it was very successful. It was sold at Nordstrom and a lot of high-end retailers and we even took it to TV and it became a label into its own little brand. People said it was too expensive and it wouldn’t sell but I believe people will pay more to have better quality and that is the customer base we found.
We also have a brand called Legend of the Dragon with martial arts film star Don ‘the Dragon’ Wilson. I also created two brands with the Hearst Corp: Seventeen®,inconjunction with Seventeen magazine andtargeted to the teen market, and the ESQ® brand. For Seventeen®, I designed a junior girls’ line out of silver with natural gemstones. I took this idea to everybody I knew because I felt it was an opportunity to tap into an untapped revenue stream that none of the big chains had tapped into. Of course, I got the usual response of ‘no, it will never work’ and doors were slammed in my face. Kay Jewelers thought it was genius and we placed it in 900 of their stores and it brought them a fresh new revenue stream and new customers. We had so much fun on this project—we even designed the packaging to look like a little purse. The idea with ESQ® was to take a men’s magazine and design women’s jewelry for it. Nobody knew that a lot of women read men’s magazines. I wanted to come up with a different, creative way to market it.
I also created some pieces for ‘Dancing With the Stars’ judges, and many more such as Divas Choice™ and other diffusion lines for major brands that I’m under confidential agreements with.
Opportunist: Where do you obtain the stones used in your pieces?
Steven Zale: I have been working with many suppliers, but mainly in Thailand.
Opportunist: What is it about your designs that set them apart from the competition?
Steven Zale: Quality. No matter what the price point, our reputation and company slogan is: ‘The Mark of Quality.’
Opportunist: Who is your main competition?
Steven Zale: There are many wholesalers that create labels; however, that is different from creating a brand.
Opportunist: What is your ultimate goal for Zalemark Holding Company?
Steven Zale: To create a design, develop into a brand image, manufacture the product to high quality standards and bring it to market through our own distribution channels.
Opportunist: What do you enjoy most about your work?
Steven Zale: When you have made something and see somebody wearing it and they love it, it’s just so gratifying. I also like that when I was the first designer to design black and white diamonds together in jewelry—because I loved the contrast—I was told by industry executives that it would never catch on and that my design direction was flawed. Well, it turned out to be the biggest hit back then and still is today! So you never know. I find great enjoyment in creating the jewelry, the packaging, the advertising and seeing it grow into a brand that people enjoy. I often hear someone saying they like a design, but not always do they know I’m the person behind it. I’m usually the guy in the background.
Opportunist: Can you tell us about some of your new designs?
Steven Zale: We are launching an infinity necklace brand. This is a beautiful, all natural necklace made of pearls and beads that stretch. It can be worn as a necklace, a bracelet or even a belt—and it returns to its original shape. It’s a very unique fashion accessory. It was invented by a woman back East who came to me after she had received lots of interest from other home shopping type networks. She liked that we could launch it ourselves and so here we are.
Opportunist: Are any other joint ventures in the works?
Steven Zale: In reference to the distribution, Zalemark has created CompraLuxTV Home Shopping Network. It is a distribution channel to bring to the consumer brands of quality at great pricing with outstanding customer service. We have focused on the exploding Hispanic consumer and will migrate into English under the Lux TV brand.
Opportunist: Please tell us more.
Steven Zale: CompraLux was one of the ideas we came up with after seeing the opportunity to take products directly to the consumer. We looked at all the different markets, which are very saturated by QVC and HSN and identified the fastest growing emerging market, which is the Hispanic market. It is growing by leaps and bounds, so we figured why not bring our designers and great quality and great customer service to a market that has been very severely underserved. So, over the past 24 months we have been developing this concept. One of our shareholders funded this project to get it started, and we are now on the air and reaching over 18 million households.
We are carrying a variety of products besides designer and branded jewelry. We also feature Onsen skincare products, which is an amazing product that has tremendous results. It is based on a specific technology of elements that come from a Japanese spring where people bathe in an effort to treat their different ailments. A Japanese company developed this and extracted minerals and put it into a formula they can apply to people here.
Opportunist: Are the shows only in Spanish?
Steven Zale: Yes, the CompraLux shows are in Spanish and we are developing similar shows under our LuxTV brand in English. We are going all over South America and Mexico as well. There were several attempts at the Hispanic market but we did our homework very methodically and grew to know the customer and the social implications about gaining their trust. You cannot market the same to them as you do to other groups. You must prove yourself first, and once you do they become loyal, excellent customers.
Opportunist: What was your motivation for taking Zalemark public?
Steven Zale: The jewelry industry is a cottage industry. Unless you close your shop or sell your inventory, there is very little exit strategy to recoup goodwill or the legacy of your company. Going public meant a lot of people who liked the vision or direction of the company could be involved. If they invested, they could just cash their stock on their own incentive and I would have a way in the future to retire by building the company and the stock value for shareholders. I didn’t realize everything that is involved in having a public company, but we are in very good shape and our stock is probably at the very best opportunity price we think it will ever be. Through all our sweat equity, perseverance and teamwork, we believe our stock has the potential to explode in 2014.
Opportunist: Is there anything you would like to tell potential shareholders?
Steven Zale: Zalemark has an amazing, dedicated team that perseveres to make Zalemark a global company. We have put a lot of our own capital and sweat equity into Zalemark and it is now paying off. Last week CompraLuxTV went on the air to over 18 million households, and we are working on more distribution deals to increase that reach many times over. Our shareholders have supported us and carried us through our R&D period and, for that loyalty, we want them to see the stock soar.
Opportunist: What else is on the horizon for 2014?
Steven Zale: We will launch brands that are now ready for market, including our Patricia Rose™ Hollywood Retro Collection, which is a collection based on Hollywood retro designs that were co-designed by Patricia Ferri and me over the last two years. We have finished all the designs and the photography and we plan to launch in the beginning of 2014. Everyone who has previewed this brand thinks it’s the most amazing thing they have ever seen. It’s very cutting edge with a Hollywood retro yet modern flair to it.
We are also launching our ‘Dog Boxer™ MMA’ brand, which is based on a style of fighting in the exploding mixed martial arts sport. We were approached to create original designs based on their logo and to incorporate it into pendant jewelry and rings and bracelets. It’s something we have never done before but it turned out amazing. We are marketing it through display advertising in magazines and such and we have a lot of support from some of the world champion fighters. Also, because the Boxer dog—with its innate survival instincts as well as its gentleness—inspired the brand, we are going to be giving a percentage of our proceeds to animal shelters. We will also be introducing the infinity necklace and some up-and-coming designers.
Opportunist: Speaking of giving back, we have heard that you are a big supporter of Operation Smile.
Steven Zale: Yes, I never considered myself a charitable person but I was very moved by the work they are doing for poor children born with cleft lips or palates and other disfigurements. As much as I like to make something that’s not there—that really always was there—they do the same with these children. It’s almost like the sculptor who carves out of a rock. The rock was always there; the sculptor just added something to it. They take a deformed child who is often very difficult to look at and sculpt it into something beautiful and that child’s life is changed. It inspired me and that is the reason I felt a great alignment with them.
Leslie Stone is an award-winning writer/editor with more than two decades of experience covering business, finance and lifestyle issues for newspapers, magazines and online publications. Originally from Virginia, she currently resides in Florida. Follow her on twitter at @les7989.
Zalemark Holding Company, Inc. - http://www.zalemark.com/
Watch Steven Zale on FOX - http://youtu.be/pDXCNons_KQ
CompraLux Hispanic Shopping Network - http://www.compralux.com/