Business

Silpada Designs shocks its representatives by announcing the company will close in July

Three years ago, the founders of Lenexa-based Silpada Designs bought back their silver jewelry company from Avon for a fraction of the $650 million they sold it for in 2010.

Now it seems the homegrown, multimillion-dollar company will be shutting down at the end of July, according to Facebook posts on Tuesday made by several surprised Silpada representatives.

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“It is with a heavy heart that I pass along the announcement Silpada Designs has shared today. They are closing this nearly 20 year company as of July 31, 2016,” wrote stylist Christina Bobbitt on Tuesday afternoon. “From what I understand, they will honor the Silpada Promise on jewels, but I will pass along more info as it comes.”

Another stylist, Dale Bentley, posted at the same time: “It is with a heavy heart that I share the following news: On July 31st, 2016, Silpada Designs will be ending all sales operations in Canada and the USA. I am most appreciative of each and every one of you wearing and sharing Silpada products.”

Just hours before the posts, Silpada tweeted and posted on its Facebook page about a pair of turquoise drop earrings.

However, a link made available to Silpada sales reps contains information about the closure and how it will affect them.

The first question: Why is Silpada closing?

“A. Since the reacquisition from Avon three years ago, the founding families, many representatives, and our dedicated internal team, have worked tirelessly and passionately to turn this company around from the negative trends we have faced for the last 6 years. Over the past three years, there were significant investments made to keep Silpada operating as you worked to enhance and evolve this company to remain relevant in this market. However, we have come to the stark realization that our love, commitment and these additional investments are not enough to reverse or even stabilize our sales revenue, party and recruiting trends, all of which continue to significantly decline.”

From its humble beginnings as a business founded by stay-at-home moms, Silpada saw stunning success, becoming the world’s largest home party seller of sterling silver jewelry and providing a steady income for thousands of representatives across the country.

In 1993, Bonnie Kelly and Teresa Walsh pooled $50 from their grocery budgets to start Cool Jewels. The best friends wanted to share their passion for the jewelry and perhaps make some extra cash.

Soon, sales soared and in 1997 the women — along with Bonnie’s husband, Jerry — launched Silpada Designs, signing about a dozen women as independent sales representatives. By 2010, revenues had grown to $230 million annually, and Avon came calling. It bought the company for $650 million and kept the founders and management team.

A year later Silpada had more than 33,000 sales representatives, with about 4,400 expected to attend its 2011 summer conference at the Kansas City Convention Center. The stylists swathed themselves in Silpada jewelry and followed Kelly and Walsh around like groupies.

When Avon Products was struggling in mid-2013, Jerry and Bonnie Kelly and their daughter, Ryane Delka, along with Tom and Teresa Walsh and their daughter, Kelsey Perry, formed Rhinestone Holdings Inc. to buy back Silpada for $85 million.

At the time, Jerry Kelly said Silpada’s long-term interest would best be served by “being in the hands of people who founded it, grew it and continue to love it. This move will ensure Silpada will continue for decades and generations to come, and remain a family owned business.”

Silpada also appointed Delka and Perry to serve as co-presidents. Their titles later changed to co-chief executive officers.

Since then Silpada has continued to make changes.

In 2014, they introduced the K&R Collection, featuring updated designs. A year ago they announced a new collection of handbags, wallets and scarves. In November, they launched a new loyalty program. Then in January they rolled out a sales representative program, Stylemaker, a selling opportunity for people who just wanted to supplement their income. They were not expected to recruit a team or host parties.

But the changes didn’t seem to be enough. News of its closing saddened many of its biggest fans — including many of its representatives.

“I have thoroughly enjoyed my four years as a Silpada Representative,” wrote stylist Bentley on Facebook. “Silpada sales reconnected me with many dear friends, allowed me to mentor several fun-loving, amazing women and introduced me to a multitude of gracious hostesses and great customers. Silpada also provided me with a tremendously supportive network of like-minded women whose energy, guidance and inspiration encouraged me to step outside my comfort zone, changing ‘Why? into ‘Why not?’ 

Joyce Smith: 816-234-4692, @JoyceKC

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