RIO DE JANEIRO (Mar. 10)
In 1939, on the eve of World War II, a penniless German Jew named Hans Stern arrived in Brazil with his parents. He had 10 deutschmarks in his pocket — and no clue about how he’d make a living.
Six years later, as the war was winding down, the enterprising teenager sold his prized accordion for the equivalent of $200 and used the money to start his own jewelry business.
Today, H. Stern Jewelers is Latin America’s — and Israel’s — leading retailer of precious stones, with 160 stores in luxury hotels, shopping malls and airports around the world. Half of those outlets are in Brazil, another 30 are in Israel and the rest are spread throughout Europe, the United States and Spanish-speaking Latin America.
Hardly a five-star property opens in some Latin capital, it seems, without the obligatory H. Stern outlet and its glittering display of watches, necklaces, rings and bracelets in the hotel lobby.
It’s been a long road from the German town of Essen, where Stern was born and raised, to Ipanema, the glittering, upscale Rio de Janeiro suburb where more than 120,000 tourists visit Stern’s showroom each year.
“After Kristallnacht in 1938, my father decided to leave Germany as quickly as possible,” said Stern, 82. “But it was difficult to get visas.
“I had an uncle living in Brazil who had come here in 1935. He was married to the sister of Roberto Burle Marx, the architect, and they got us visas. I came to Brazil with my parents and grandfather.
“During the war, I had to work. We came here with nothing, so I got a job as a typist in a company exporting and cutting gems. This is how I learned the business,” recalled Stern, who speaks Portuguese, English, Spanish, French and a little Yiddish, in addition to German.
“First I worked as a broker, going to the hinterlands, getting stones on consignment. I ended up making some jewelry for friends, then customers,” he said.
The young jeweler’s big break came in 1951, when he received an order for a $20,000 aquamarine necklace from Nicaraguan dictator Anastasio Somoza. In 1955, Stern opened his first outlet outside Brazil in the Uruguayan capital, Montevideo.
Business boomed, and H. Stern began expanding to other South American countries — and eventually Europe, Israel and the United States. Along the way, the Rio-based company has introduced efficient research into methods of using raw materials, including a variety of precious gemstones ranging from aquamarines and amethysts to tourmaline, topaz and tanzanite.
“I believe that Brazil, being so rich in gems, should be as known to the world for gemstones as France is for perfumes, as Scotland is for whiskey,” says Stern. “In Brazil alone, we are now in 18 cities. We have already become better known than any other jewelry company in Brazil.”
Stern never discusses revenues, though Forbes estimates annual sales at between $300 million and $500 million. The Wall Street Journal was more conservative, putting sales at around $150 million. Asked about the discrepancy, Stern said, “People like to throw numbers around.”
H. Stern’s domestic operations employs 3,500 people, 2,800 of them in Brazil. Another 700 employees work at H. Stern’s overseas operations, which include outlets in Argentina, Colombia, Peru and the U.S. Virgin Islands. In New York alone, H. Stern has four stores.
In Europe, H. Stern runs its own stores in Paris, Munich and Frankfurt. Franchisees for H. Stern operate in Greece, Portugal and now Kazakhstan. Negotiations are under way to launch a joint venture in Cannes.
H. Stern’s most widespread overseas operation, however, is in Israel, where the jewelry retailer employs 300 people in 30 stores from Haifa in the north to Eilat in the south.
“If you visit Israel now, you cannot ignore us,” said Israel Kurt, manager of H. Stern’s operations in Israel, noting that the company opened its first duty-free shops there in 1964, with outlets at the Tel Aviv Hilton and Ben-Gurion International Airport. “We used to depend only on tourism. Now we have tourism and local business, and we live from the local business now and are waiting for the tourists to come.”
H. Stern’s largest shop in Israel is an outlet at the Ramat Aviv Mall, just north of Tel Aviv. The chain also runs six places to buy H. Stern jewelry in the new terminal at Ben-Gurion Airport.
“We are contributing to the development of the jewelry industry in Israel, especially in design and gemology, by giving a helping hand to the Shenkar College in Tel Aviv,” he said.
Besides his 30 stores in Israel, H. Stern also has two franchises in the United Arab Emirates, operating under the Azal name. More franchises may open in other Arab countries, including Lebanon.
“We are a Brazilian company. Of course they know we’re Jewish and that we’re big in Israel, but they don’t care. Business is business,” said Kurt, noting that Palestinian negotiator Nabil Sha’ath recently bought a wedding ring from H. Stern, and that “Hanan Ashrawi is one of our best customers.”
Stern isn’t particularly religiously observant, though he’s been a member of ARI, a liberal Ashkenazi congregation, ever since its founding soon after he arrived in Rio de Janeiro.
Intermarriage is relatively high among Rio’s Jewish community, he says, though “there are also a lot of conversions. My youngest son married a Brazilian girl who converted to Judaism on her own.”
A likeable grandfather who enjoys collecting stamps, swimming, playing his Hammond organ and listening to Bach, Stern also takes special pride in showing friends around his cutting and polishing factory in Ipanema and the H. Stern Cultural Center. The tour is an almost obligatory ritual on the itinerary of every visitor who comes to Rio. In fact, about 10,000 visitors drop by the 17-story headquarters every month, many of them on hotel-organized bus tours.
On the third floor of the Ipanema headquarters, visitors may tour the gemological area, watching through a series of windows while wearing headphones switched to one of 18 languages, including Japanese, Korean, Turkish, Hebrew and Arabic. As the watch the jewelers at work, “The Girl from Ipanema” plays softly in the background.
Because most of the gems are mined locally, prices are often 30 percent less than what they’d be back home. Tourists who end up making purchases at H. Stern spend an average of $1,200.
Even so, tourists represent only 20 percent of H. Stern’s total sales. The rest comes from the local Brazilian market, which Stern says has grown tremendously in recent years, thanks to the company’s decision to pay closer attention to global fashion trends.
Stern, who doesn’t wear any jewelry except his watch and cufflinks, still works from 8:30 a.m. to 7 p.m. five days a week. He works half a day on Saturdays.
“Being semiretired means coming into the office half an hour late,” Stern joked.
The face of the company is changing, he said. “Until a few years ago, three of my four top executives were of European Jewish descent. Over time, they’ve been replaced by local executives. Now, of the old people, I’m the only one left.”
Stern’s 45-year-old son Roberto runs the company’s day-to-day operations, with help from another son, Ronaldo, who is based in New York. Hans Stern’s wife, Ruth, to whom he’s been married for 47 years, helps out whenever possible. But he remains firmly in charge of the company.
And though there’s been some talk of taking H. Stern public in order to raise capital, the old man says outsiders will never control more than 49 percent of his company.
“The family won’t let go,” he insisted. “Not as long as I’m around.”