James Avery Craftsman, Inc.

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James Avery Craftsman, Inc.

Harper Road
Kerrville, Texas 78029
U.S.A.
Telephone: (830) 895-1122
Fax: (830) 895-6601
Web site: http://www.jamesavery.com

Private Company
Incorporated: 1965
Employees: 1,300
Sales: $80 million (2005)
NAIC: 339911 Jewelry (Except Costume) Manufacturing

James Avery Craftsman, Inc., is a private company based in Kerrville, Texas, that designs, manufactures, and sells jewelry, primarily Christian in theme. All told, the company offers about 1,100 designs and 14,000 different pieces of jewelry, sold through 40 company-owned stores located in Texas, Georgia, Oklahoma, and Colorado; 200 independent retailers; mail-order catalogs; and an Internet site. The mostly family owned company is still headed by its founder, Homer James Avery, well into his 80s, assisted by sons Paul and Chris Avery.

Founder Turns to Jewelry Design After World War II

James Avery was born in 1920 in Milwaukee, Wisconsin, the son of a teacher and an insurance agent, who grew up attending a Presbyterian church. By the time he joined the service during World War II and became an Army bomber pilot he was what he called a "defensive agnostic." He retained a certain level of spirituality, however. He wore an amulet made from the horn of an animal, given to him by an African native who said it would protect Avery from "boom-boom"—antiaircraft fire. He managed to survive 44 missions over Germany, a feat not easily accomplished without injury. The charm also would presage his eventual career.

Married during the war, Avery returned home and went to college, majoring in industrial design at the University of Illinois and earning a bachelor of fine arts degree in 1946. He then became an industrial design teacher at the University of Iowa, then at the University of Colorado in Boulder. While teaching a class in applied design at Colorado, Avery tried to provide some variety for his students, who had grown weary of making furniture and silk screening fabrics, by looking to jewelry. He learned the rudiments of jewelry making from a library book.

By this time Avery's marriage was on the rocks. After returning from a trip with his sons to visit his parents in Chicago, he found a note from his wife asking him to call her lawyer. The breakup of his marriage caused Avery to take stock of his conduct in his marriage, which was punctuated by alcohol and stormy fights, and at the behest of his mother he visited an Episcopal minister in Boulder. His agnosticism gave way to a rekindled faith, strengthened by his natural interest in the kind of ritual and symbolism offered by the Episcopal church. In 1951 he made his first cross, inspired by a Southwestern Pueblo Indian Cross that he came across in a Denver store. Some of the college students were attracted to the cross and asked if he would make one for them. "I just charged for the metal I had to buy," he told the Houston Chronicle in a 1988 profile, "but then I saw how moved they were, and realized that this is important in life—to give meaning to others."

Founding the Company in 1954

During this period Avery met a 19-year-old sophomore, ten years younger than he was, Sally Ranger, who came from Kerrville, Texas. When Avery's divorce was finally settled, he married her in 1953. The couple then moved to Minnesota so he could pursue a master's degree. His inability to complete a required French class, however, derailed his plans, and lacking money they were forced to move to Kerrville and live with Sally's mother. Unsure what to do with his life (he even thought about driving a beer truck to make a living), Avery decided to go into business after his mother-in-law offered him the use of her two-car garage as a design studio. Thus, in 1954, James Avery built a workbench and fashioned a sign to hang on the garage; it read "James Avery Craftsman" and featured a candelabra logo. Both the name and image would remain part of the company thereafter. Avery was not entirely sure what kind of craft he would actually pursue, but he settled on religious symbolic jewelry, although for a while he dabbled in a number of knickknacks as well.

Avery was a novice in every way. "I wasn't a jeweler. I didn't know anything about jewelry," he told the Dallas Morning News in a 2000 interview. "I was out here in the country. I got a sign out on a farm road that says, 'Jewelry, 1 mile.' I mean, how dumb can you get…. I didn't know anything about stones; I couldn't tell a piece of glass from a diamond." He managed to sell a couple of pieces out of the garage, but the first break he received was when his mother-in-law took over the commissary at a local summer camp and began selling some of Avery's jewelry, which at the time was mostly Christian symbols such as crosses, fish, doves, and lambs. The items were simple, uncluttered, and sincere—and to many it would be the best work he ever did.

The campers who bought Avery's jewelry wrote to order more jewelry after they returned home and spread the word about the country artisan, and he gradually built a reputation. During his first year in business he sold $5,500 worth of jewelry, followed by $7,500 in 1956. He outgrew the garage and built a studio and house close by. It was also in 1957 that Avery hired his first employee, Fred Garcia, and produced his first catalog, 16 pages long, offering 39 items. The business continued to enjoy steady growth, spreading statewide through an assortment of retail outlets, including clothing boutiques and church gift shops. In 1965 it was incorporated as James Avery Craftsman, Inc. and by 1967 had once again outgrown its facilities. Avery secured a Small Business Administration loan, bought 20 acres of land, and built a corporate headquarters, studios, and workshops.

By the start of the 1970s the company employed 35 people and generated $400,000 in annual sales, but the business was in clear need of an executive to take it to the next level. Avery found it in Chuck Wolfmueller, a Kerrville native who in 1971 was working on his master's degree in business at the University of Texas. For a term project Wolfmueller analyzed James Avery Craftsman and made suggestions on how to improve production. Avery was so impressed with the paper that he hired the 23-year-old Wolfmueller in May 1971. As an example of how disorganized the company was, when he took over James Avery Craftsman the company was still filling 1970's Christmas orders.

Wolfmueller initiated a number of changes. First, he updated the equipment, and then took steps to make the company more vertically integrated. A machine shop was built to furnish necessary tools and dies, and a chain-making factory was established. In the first year the company saw an increase in sales of 40 percent, solidifying Wolfmueller's reputation as a boy genius. Avery was known to be harsh with his own children, but took a different approach with Wolfmueller, who quickly learned how to present ideas that Avery could embrace and make his own. One of those ideas was for James Avery Craftsman to open its own retail stores. The first was established in North Dallas in 1973 and was decorated in a manner that would be followed by subsequent stores: stucco walls, wall sconces, oriental carpets, and old trunks and wardrobes scattered about. In that same year, the company expanded on its secular product line. The Dallas operation was far from an immediate success, yet the company opened a second store in southern California, followed by another in Laredo, Texas. Finally, the concept took hold in Houston, where a store generated $400,000 in 1975. A year later a San Antonio outlet opened and did even better. Business was so strong that the company had to postpone opening further stores until the manufacturing operation was able to keep up with demand.

"Even as the legend of James Avery grew," wrote Texas Monthly in 1991, "his private life began to diverge from his public image. The catalyst was Carmen Espinoza." She started out working on the assembly line but caught the attention of Avery, who moved her to the showroom. He began having an affair with Espinoza, then divorced his wife and left her and their four sons to marry Espinoza and move to Laredo, where the company established a retail store and he set up a small factory. Avery periodically flew back in a single-engine airplane to keep tabs on the business, which was being run in his absence by Wolfmueller and his ex-wife, who controlled half the stock. She would remarry and move away, at which point Avery gave up on the struggling Laredo operation and moved back to Kerrville with his second wife. Sally then sold back her share of the company in 1979, a year after tragedy struck the family. According to the Dallas Morning News, one of their sons "committed suicide on Father's Day, 1978. Stephen, who was 19, suffered from schizophrenia that began manifesting itself shortly after his father left home in 1971."

Company Perspectives:

From the very beginning, James Avery has believed in integrity and good taste in all matters. Our jewelry must be as pleasant to wear as it is to see. Our designers create jewelry that is functional as well as expressive, and our crafts people work with dedication and skill to ensure each design is as it should be, from concept to completion.

James Avery Craftsman launched a catalog sales division in 1980 and mailed its first seasonal catalog. The catalogs had the added effect of driving traffic to the retail stores, which were now expanded to Oklahoma. Business also increased when the Gemstone Department was added in 1983. As a result of the changes, sales that totaled $1.5 million in 1975 grew to $14.3 million in 1985. Wolfmueller became president of the company and Avery, now 64 years of age, decided to put the business up for sale. Not satisfied with the only bid he received, $5 million, he asked Wolfmueller if he was interested in a management-led buyout. A plan was developed that would give Wolfmueller and six other managers ownership of the company if they met certain sales and profit goals. They would then be awarded bonuses to buy the company's stock over time, allowing Avery to retire. The seven managers signed on in May 1986, each paying $50,000 to complete the initial stock payment. Although the retail operation would greatly expand during this period, including a move into Georgia, the plan would soon be derailed as a result of another affair Avery had with a woman, Sylvia Flores, who came to the company as a part-time typist while in high school but was 32 years old in the summer of 1987 when people in the office began to suspect that something was going on between her and Avery. He separated from Carmen and began to express misgivings about fulfilling the buyout plan, anticipating that his divorce from Carmen would prove expensive.

Early 1990s: A Period of Notoriety

Discontent within the company reached a head in the summer of 1989. Avery turned on Wolfmueller, insisting that he be more decisive and lose weight. (Avery, a fitness fanatic, preferred trim employees.) Wolfmueller responded with a lengthy memo that in essence suggested that it was time Avery practice what he preached, referencing the passage in the employee handbook that "a person not adhering to the company's moral standard could be dismissed." A day after submitting the memo to Avery, Wolfmueller was asked to resign. He promptly filed a $12.3 million lawsuit against Avery, Sylvia Flores, and the company, and Avery responded with a counterclaim. Two more managers resigned, followed by a third who refused to sign a statement releasing Avery from the buyout plan. Wolfmueller's lawsuit went to trial in 1990. It was a well publicized case, filled with embarrassing details of Avery's personal life, far from consistent with his public image as a Christian craftsman. To the surprise of many, on the eve of the trial Avery and Carmen reconciled, and she sat in court each day in support of him. The question at hand was the legality of the buyout plan, and in the end a jury awarded Wolfmueller $15,000 for the buyout plan and $360,000 for the invasion of his privacy, because his office desk had been broken into and the contents examined without his consent. That amount would be reduced to $29,000. Within a matter of days, Avery and Carmen were divorced; she received a settlement worth $5 million. Wolfmueller vowed to appeal the jury's decision, but several months later he reached an undisclosed settlement with Avery.

Avery made an effort to reconcile with his five sons, giving them each 4,000 shares of stock. His youngest son Paul, a former horticulturist, joined the business and would oversee retail operations. He was followed by brother Chris, an anesthesiologist by training, who became company president. In April 1991 their father would marry a fourth time. He met his new wife, Estela, a registered nurse 30 years his junior, at a fund-raising event at a Catholic school.

Under Paul Avery's leadership, James Avery Craftsman introduced corporate governance policies, granted more power to executives, and insisted that a succession plan be put into place. James Avery remained involved in the company, but day-to-day decisions were made by Paul and the company's chief financial officer, Mark Hogeboom, a former executive with Zale Corporation. Primarily, James Avery oversaw design and never entertained further plans to retire.

Despite the unwanted publicity of the Wolfmueller trial, James Avery Craftsman continued to grow during the 1990s and into the new century. In 1994 the company produced its first specialty charm catalog. A fourth jewelry workshop was opened in Comfort, Texas, in 1998. Another workshop opened in 2001, this one located in Hondo, Texas. Although other companies were quick to embrace the Internet, James Avery Craftsman held back, not because it was opposed to the technology, but because the manufacturing operation could not keep up with current demand from catalogs and retail outlets. It was not until 2003 that a company web site was launched. In 2005 James Avery came full circle in a way. In July of that year James Avery Craftsman opened a retail store in Denver, located in the state where he first learned the craft of jewelry making from a library book.