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World Federation Of Diamond Bourses

Interview with Karen Goracke – President & CEO, Borsheims

Karen-Goracke

Q. First, can you please introduce us to Borsheims?

Borsheims is one of a kind!  We are a single store located in Omaha, Nebraska and we’re a big one at that: we’re over 60,000 of retail space and corporate offices.  This unique combination has been critical to our business success.  As all our employees, warehousing, shipping, and sales are located under one roof, we’re able to act efficiently and nimbly. 

Additionally, Omaha has a lower cost of living so we are able to keep our expenses in check and pass the savings onto our customers, which is known as “The Borsheims Price.”  This everyday discount, high volume of sales, and expertise within the gem and jewelry industry is what attracted one of our customers—Warren Buffett—to purchase Borsheims and make it part of the Berkshire Hathaway family of companies in 1989.

Every year we host thousands of shareholders who arrive for the Berkshire Hathaway annual meeting.  Borsheims is considered the ‘crown jewel’ of Berkshire Hathaway.  While we are the smallest subsidiary, we’re the most glamourous and the annual meeting is a time where we show off!  It’s such a significant selling event for us that we call it our “Christmas in May.”

Borsheims is also an Omaha and jewelry institution, having been in business since 1870.  I am proud that we continue to reinvent ourselves and respond to the changing retail and industry environment.  I consider us a leader in our industry and I am committed to ensuring our business practices are rooted in integrity and ethics. 

Q. As a single location mega-store in Omaha, Nebraska, how does Borsheims cater to customers from around the United States? Do you sell your inventory online?

We have embraced the concept of an omni-channel business model, and our website, Borsheims.com, plays a crucial role in this strategy. With only a single location in Omaha, Nebraska, our website allows us to expand our reach both domestically and internationally.

Our customers can view and purchase our inventory online, providing them with the flexibility and convenience they seek in today’s digital age. We strive to create a seamless and personable digital experience that mirrors the exceptional service our customers receive when they visit our physical store.

While we are committed to developing our digital presence, our focus remains on delivering memorable and effective customer experiences. Our commitment to superior service sets us apart in the luxury goods market.

We also understand that the customer journey doesn’t end with a click of purchase. That’s why we’re continually exploring new ways to improve this journey, from the moment our customers land on our website to the after-sales support we provide. Our goal is to deliver a personal touch at every interaction and remove any friction points along the way. Nurturing meaningful relationships with our customers, whether in-store, online or over the phone, is our top priority. We value their trust and strive to exceed their expectations at every turn.

Q. What proportion of your sales are diamond related?

A large portion of our sales are diamond related with over 70% of sales containing natural diamonds.  Diamond related jewelry is a significant category for Borsheims.  We sell a variety of diamond merchandise, including loose diamonds, diamond stud earrings, and finished diamond jewelry. 

I can further categorize our natural diamond sales.  Last year, approximately 17.4% of sales were categorized as loose diamond purchases, a similar percentage were categorized as engagement purchases, and about 20% were categorized as diamond jewelry purchases. 

Historically, approximately 1 out of every 3 sales for us is an engagement sale, which most often is a diamond purchase.

Q. Where does Borsheims source its diamonds?

Borsheims’ supplier list is proprietary; however, we utilize a variety of sources for our diamonds.  Our diamonds can come through trusted vendor partners for both finished and loose goods, as well as through new relationships.  All partners we use must adhere to the Kimberley Process as well as validate annually that their diamonds are from conflict-free and sanction-free countries. 

Q. How were Borsheims jewelry sales in 2023?  What do you see for 2024?

Given how concerned we were at the beginning of 2023 on how the year would look, Borsheims did great in 2023!  The year marked another year of 3 years of continuous growth for our business.  While it was a more muted growth this year, I was still pleased at the strength of sales in the jewelry industry. 

Q. What is your view about Lab-Grown Diamonds versus Natural Diamonds?

Lab-Grown diamonds are a hot topic and there are passionate opinions on the product.  I believe that Lab-Grown diamonds have a role within jewelry retail.  At Borsheims, I often see that it fulfills a customer’s demand of having a larger diamond at a value price.  Additionally, I see that some customers appreciate Lab-Grown diamonds as a more sustainable option than mined diamonds, however, that is a much smaller percentage.

I have an eye towards the future with Lab-Grown diamonds and what the store will be.  I am watching the pricing of Lab-Grown diamonds as the fluctuations can be significant.  I believe that Lab-Grown diamonds are here to stay, but perhaps transition to be more of a non-bridal category.  We will see!  It’s been quite a journey with Lab-Grown diamonds.

Natural diamonds are still very much in demand by customers, especially customers that would like to preserve a trade value on their mined stone.  Specifically, as it relates to loose diamonds, I would say the discriminating consumer, or the potential diamond aficionado, still remains loyal to natural diamonds.

Q. Can you tell us about your journey in the jewelry industry?

I began at Borsheims after I graduated college.  My career started in sales, within our home accessory and fine gifts division.  After Berkshire Hathaway acquired Borsheims, I then moved into the Inventory team to help create the first SKU and management system.  My career then led me to the Buying Team, where I oversaw the Watch brands.

I took a break for six years to raise my family and then returned as seasonal sales help in 2004 before returning as the Director of Merchandising.  10 years later I became President and CEO in 2014. 

Additionally, I have had a wonderful opportunity to be part of the Mountain Province diamond mine board of directors since 2016.  It has been an incredible opportunity to be part of the beginnings of the diamond supply chain, the mine, as well as the last connection to the customer, the retail store.  The insight I have gleaned about our industry being in both these roles is priceless. 

I have visited the Gahcho Kué diamond mine and witnessed firsthand how diamonds support a community.  It makes me proud to be part of the gem and jewelry industry and continues to motivate in my career.

Q. How does being part of the Berkshire Hathaway group impact Borsheims?

I can’t overstate how significant it is to our business to be part of Berkshire Hathaway.  The association provides a guiding light on how we manage the business, because as a public company we’re held to higher levels of scrutiny.  Warren and thereby Berkshire Hathaway is also consistently ranked highly in integrity as it relates to best business practices. 

There are thousands upon thousands of Berkshire Hathaway shareholders and they are a loyal bunch to the subsidiary companies.  Our customer base is wide-ranging as there are Berkshire shareholders all over the world.  We have existing long-standing relationships with shareholders and each annual meeting in May introduces us to new shareholders, who hopefully become customers.

Finally, Warren is an incredible mentor and I’ve cherished the time I’ve worked with him.  He is as kind as he is brilliant.  It’s been a highlight of my career to be able to call him my boss!

Q. As an industry leader, you are involved in jewelry industry organizations and have won awards. Please tell us about that.

We are indeed proud to be active members of several industry organizations, and we value these associations deeply.

Borsheims is a member of Jewelers of America, the Jewelers Vigilance Committee, Jewelers for Children, and many others. Our participation in these organizations allows us to stay informed about industry trends and is a great resource for our business to network and collaborate with other professionals in the jewelry industry.

Our association with these esteemed organizations not only enhances our expertise but also reinforces our commitment to maintaining the highest standards of quality, integrity, and professionalism. We believe that this commitment is reflected in the service we provide to our customers and the stellar reputation we’ve built over the years.

In terms of awards and recognition, while we’re always honored to receive them, it’s not something we actively seek. Instead, our focus is on delivering exceptional customer service and providing high-quality, ethically sourced jewelry. Any accolades we receive are viewed as a testament to our unwavering dedication to these principles.

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