Tumblers and Jewelry

Tumblers and Jewelry

Two Gulf Coast businesses are surviving the downturn in their narrowly focused markets.

Are you seeking a break from the barrage of negative business news leaving a stench wherever it goes, from local condo sales numbers to the Wall Street crisis du jour?

Then grab some cultured diamonds and polycarbonate cups.

In the Sarasota-Bradenton market at least, the companies behind those two products are rising above the muck when it comes to surviving in a down market. The diamonds are the core product made and sold by Gemesis, a Lakewood Ranch-based manufacturer of laboratory-grown diamonds. The cups, meanwhile, are the heart and soul of Tervis Tumbler, a Venice-based manufacturer of custom-made drink ware.

Both of those companies are planning to grow or expand during the next several months, their respective chief executives say.

Tervis is considering adding as many as a dozen seasonal employees for the next four months, coming off the 18 people it recently added to its 200- employee payroll. The company, which is projecting 15% revenue growth in 2008, from $30 million in 2007 to $35 million, is also seeking to expand its distribution points to markets in the Northeast and the Southwest.

"For the state of the economy to be where it is," says Tervis Tumbler chief executive Laura Spencer, "we are pretty happy with where we are."

Another key to the company's 2008 strategy has been to introduce some new products, including a 10 oz. tumbler. Older tumbler models have been redesigned.

New products are fueling Gemesis' growth, too, although chief executive and president Stephen Lux declines to release specific annual revenue figures. The company is in the latter stages of shifting from a research and development company to a sales and distribution business, showcased by its recent announcement that it's adding new colors and sizes to its diamond repertoire.

The colors include orange, yellow and pink, the last of which is the new trend in Hollywood and celebrity jewelry-wearing circles. The company, which announced its pink diamonds at a flashy press conference in Las Vegas a few months ago, now also sells diamonds as big as seven carrots.

Of course, not all is well at these companies, proving how far the slumping economy can stretch. Both businesses have seen growth slow somewhat the past few months, although nothing as bad as many other Gulf Coast companies have experienced.

Spencer, for example, says Tervis Tumbler will miss its $36 million growth goal for 2008 by about $1 million. And while 15% growth is nothing to complain about, it's a drop from the 25% rate the company grew in 2007.

And the company's costs for materials are increasing at a much faster rate than ever before, on everything from the emblems inside the tumblers to the space-age polycarbonate used to make the cups. "It's not easy to pass that through to the customer," adds Spencer.

The "X" factor for Lux is the luxury retail market. Gemesis' business model relies on selling the diamonds in mass quantities to wholesalers and jewelry designers, who in turn rely on purchasing power from deep-pocketed customers. And as the economic hard times worsen, it appears that the conventional wisdom that the ultra-rich are immune to economic downturns might not be too wise.

"We've had our share of challenges we weren't really expecting," Lux. "We've seen some increased heat."

- Mark Gordon