Entrepreneur Makes Big Business Out Of Beads
Correction: an earlier version of this story stated that Gruer was a Holocaust survivor. It was his parents' who survived the Holocaust. We regret the error.
Thursday, March 31, 2011
Local businessman Shlomo Gruer taps into customers' shopping habits and is rewarded with loyal customers.
Shlomo Gruer moved from Poland to Israel in 1956 with his parents, who were Holocaust survivors. He grew up in a collective community, or kibbutz, where his mother worked in the kitchen and his father was a farmer.
“As far as I am concerned, the kibbutz, that was paradise. We were constantly among children of our age. When I look now at my children, how they spend time sitting in front of the computer or T.V, I feel sorry for them,” Gruer said.
He left Israel after the Yom Kippur War in 1973 and hitchhiked his way to Zimbabwe, where he met his wife, Pnina.
She is of Lithuanian origin but grew up in Mozambique and later moved to Bulawayo, Zimbabwe. While the rest of the colonials led relatively relaxed lives, Pnina said her husband worked harder than any one else.
“He has got this great work ethic. Most of the colonials used to have sundowners or cocktails while they watched the sun go down. Shlomo was out working and pushing his agenda and thinking of new ideas,” Pnina said, speaking about how he arrived with just a $100 in his pocket.
As a newcomer without money, he leveraged his people savvy and creativity to thrive in a competitive field, opening a fabric store. From the outset, he decided being different from every one else was the only way to succeed.
“If you sell by the meter like everybody else, you are one among many others and you are the last comer,” Gruer said.
He bought a scale and convinced the locals it was cheaper to buy fabric by weight.
“I made sure it was cheaper. After a year, nobody in the whole town wanted to buy by meter, they all wanted to buy by weight,” Gruer said.
Most of his customers in the Zimbabwian town were women. Gruer tapped into their bargain-hunting tendencies - instead of stacking the fabric on shelves, he threw it on the floor.
“The idea was women don’t like what they see on top, they like what’s underneath. They would sit there and dig and dig. The store became so popular there would be a line around the block at 7 in the morning,” he recalled.
One store became 25. Then Gruer jumped into the clothes manufacturing business, exporting garments to U.S retailers like the GAP.
But political upheaval led the Gruers to dissolve their business in Zimbabwe and relocate to Southern California in 1986.
They arrived in Los Angeles, where his uncle, an orthodox rabbi lived. Their attorney happened to have an unused, registered business name that they liked, which is how South Sun Products was born. Gruer decided to begin a jewelry business, selling silver like he did fabric.
“Every one was selling by the piece, I decided to sell by weight. The wholesalers in L.A. were easy to convince, since I made sure it was cheaper. Then basically whoever didn’t follow, I’m afraid he had to fold,” Gruer said.
Today, South Sun is housed in a 40,000 square foot warehouse in Kearny Mesa. Gruer sells silver, stone and bead jewelry to major outlets like QVC, Home Shopping Network and Macy’s. The warehouse also contains a retail store that’s open 7 days a week and stocks a huge variety of beads.
Despite the recession, Gruer said 2010 was their best year, when revenues increased by 45 percent.
Pnina Gruer said her husband is like a kid in a candy store when he goes on buying trips.
“People talk about women shopping. Oh, my God, they should see Shlomo shopping. He’ll look at a wall of beads and say, I’ll take that whole wall," she said.
The Gruers said they value their employees, like Big Boy Malonga, who has been with them for over 30 years, since their Zimbabwe days. The jewelry designer came to the U.S. at their request.
Tanya Radomyshelsky barely knew English when she came to work for the Gruers 20 years ago. Today she is in charge of purchase orders.
Both employees said the fact that they feel more like family than salaried workers is the biggest draw in working for South Sun.
The store offers beading classes and every Friday there’s a bead fest, a social gathering where customers share their latest jewelry creations, get ideas and bond with fellow beaders.
Customers usually find Gruer walking around the store, offering them free lottery tickets. He said it doesn’t take long to make people happy and give them hope.
At 63, when many people think of retiring, Gruer continues to work seven days a week. And he has big plans for the future.
“Maybe we will go towards a brand name. Maybe we will go into clothing, handbags and things like that. But that’s still a dream. I dream big and I dream as if I am 20 years old,” Gruer said, smiling.
Correction: an earlier version of this story stated that Gruer was 65. He is 63. We regret the error.