Could House of Taylor Become the Next Blue Nile?

It would seem as though jewelry stocks such as Zales, Tiffany, Fossil and Blue Nile are holding steady and/or on the rise. The idea of selling a jewlry product online, which consumers - can't feel in their hands or try on -before completing their purchase, has not hindered online shoppers from purchasing baubles at every imaginable price point.

Blue Nile is a great example of success! Blue Nile is trading today at $67+ a share and no doubt, their holiday sales will continue to add to their bottom line and bolster their stock a bit higher.

Today, Jewelry Blogger has added House of Taylor to its Yahoo! ticker, as we think that Cleopatra could be sailing up the Nile and offer more than few surprises in 2008.

House of Taylor founder (Elizabeth Taylor) has entered into a market she knows very well. While some might think she's simply an instrument to push a "brand", we beg to differ. House of Taylor has secured a $30 million dollar credit line (closed on October 12, 2007). While net sales for third quarter 2007 were $4.9 million compared to $12 million for third quarter 2006, the decrease in revenues were a result of the company shifting its focus away from the sale of loose diamonds to its branded jewelry line.

No doubt, House of Taylor boasts a powerful brand bolstered by a spokeswoman, who's recognized for her love of jewelry and talent. When I visited House of Taylor's booth at the Las Vegas jewelry show this year, I was rather impressed with Taylor's product line, however, I questioned the viability of a line, which required the "deep pockets" of a limited audience of consumers who could afford to plunk down big bucks for Taylor's baubles.

The addition of Kathy Ireland's collection is a plus. Ireland's collection encompasses a large selection of styles at various price points. However, a visit to www.hotj.com also throws a bit of caution into the decision, as to whether or not to "believe" in House of Taylor's online appeal.

The website is slick (maybe too slick). The use of flash distracts from the product line and the store locator page serves more as a road block than a welcome mat. I input my zip code, chose my country as the United States (the search should automatically default to the United States) and after a few clicks, was offered up two store locations within a 75 mile range of my residence. One problem. When I clicked on the links provided for the two stores within my range, the pages could not be displayed.

In order to compete online, the site has to be user-friendly and get the "to point" quickly. The "point" is to sell jewelry - not to entertain. The use of flash, distracts from the product line. The presentation of the collection looks as though catalog pictures were copied and pasted (directly to the web pages) and the quality of product was not displayed to its full potential. House of Taylor needs to spruce up its online presence to match the quality of its product lines.

The team of Abramov, Taylor and Ireland is a great combination for the long term. HOTJ stock is selling at just 40 cents a share and its long-term prospects appear bright. The price of the stock is worth the price of admission for the long-term. The business model has a cash infusion to help bring it along to the next level and Taylor's stellar image (and reputation) as an "all-around" gem could send HOTJ stock to the stars in 2008.

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