Mirror, Mirror: Lagos polishes up his silver business

When jeweler Steven Lagos was a teen, he worked as a runner for Wayne Jewelers and Silversmiths in the King of Prussia mall.

Lagos, who grew up in Broomall, knew back then that he wanted to fashion fine accessories. But his own mall store? His own fiefdom in Bloomingdale's? That was a lofty dream.

It's all happening now for the 54-year-old jeweler.

Last week, the man behind the "Heart of Philadelphia" necklace opened a gleaming six-counter, 400-square-foot shop-in-shop boutique inside the King of Prussia Bloomingdale's. "Wow," exclaimed a newly mustached Lagos to a crowd of Main Line socialites gathered at the ribbon-cutting event. "This has been a long time coming."

Because Lagos' jewelry dominates the retail space between fine jewelry and more affordable pieces, he has earned the nickname "King of Bridge Jewelry." Pieces range in price from a pair of $200 to-die-for silver hoop earrings to a $1,500 strand of pearls. A Philly touch: The designs etched on his sterling silver "Heart of Philadelphia" necklace echo the columns of City Hall.

Celebrity fans include Madonna, Fergie, Katie Couric, and Barbara Walters. He has sold more than two million pieces, and this year he's on track to sell 90,000 items. But that doesn't mean Lagos doesn't have to tweak his image occasionally.

The Bloomingdale's boutique is actually the third part of a three-part makeover plan. The company relaunched its website in October, and Lagos completed a million-dollar renovation of his Rittenhouse Square store.

Lagos' updated marketing strategy makes sense, especially in these economic times, said Matthew Tullman, president and chief executive officer of the New Hampshire-based consumer behavior research firm Merchant Mechanics.

Shop-in-shops and their less-glamorous little sisters, pop-up stores, help smaller, yet successful, lesser-known brands, like a Lagos, lower overhead costs, build brand recognition, and take advantage of foot traffic in well-established retail spaces.

During the last five years, Tullman said, we've seen them pick up traction at the onset of the holiday shopping season when consumers are most receptive to new merchandise.

"They are really at a tipping point right now," Tullman said. "The public has become accustomed to seeing them and they can appreciate the uniqueness, but it still has a newness and exclusivity to it."

Pop-ups, however, are short-lived and often disappear with the Christmas decorations; shop-in-shops are permanent fixtures requiring much more of a financial commitment, including signature signage and hiring trained staff.

We caught up with Lagos moments after the ribbon-cutting of his Bloomingdale's location to talk about holiday trends - and the new mustache.

Question: Why are you jumping on the shop-in-shop trend now? Why Bloomingdale's?

Answer: Next year, we start our 35th year in business and we want to stay relevant. We know we can't do that if we keep doing the same old thing the same old way. . . . As far as Bloomingdale's, we've had a presence here for 28 years. This is a company that knows fashion and has a very strong fashion base.

Q: How has the economy, especially the shift in gold prices, affected your business?

A: It's like in any business, you have to adjust your strategy. We've had to figure out how to use less gold and silver to keep our prices down. It's easy to make the same thing and charge five times as much for it. But it's been a challenge to keep it affordable and accessible.

Q: How has Philadelphia influenced the collection?

A: The specific elements of [Philadelphia's] architecture are a major part of our jewelry: the fluting, the columns, the crescent shapes. For years Philadelphia was my only point of reference.

Q: What's exciting about Holiday 2011?

A: Pearls are going to be big this year. We believe in pearls. The Unlaced Collection, which is more about open spaces, will be important, too. This collection is an example of how we were able to make big pieces that are lighter in weight so we don't have to raise the cost for shoppers. Rose gold is important. Stackable bracelets, too. Colored stones like the vibrant green in our Venus collection. Silver.

Q: I love silver for the holidays. How do I want my silver this Christmas?

A: I think you want it shiny. [Laughs.] We've always been known for having heavy textures, but we went with smoother surfaces. It catches the light differently. Brighter. Dressier. It's glam-silver.

Q: What's up with the mustache?

A: I was going for the retro look. But really it's a sign of my evolution. It's part of my reinvention phase. If you don't reinvent a classic brand then you become a footnote instead of being the story. It's all about the reinvention.