Silpada says outdated business model led to closing

LENEXA, Kan. (AP) - A Lenexa-based jewelry company that was one of the Kansas City area's more successful startups when it was founded about two decades ago has announced its plans to close.

Silpada Designs Inc. says its business model that involved jewelry-sales parties hosted at home has become outdated. The company said women increasingly work outside the home, making sales parties more difficult to host than when Silpada formed in 1997.

Andrea Carroll, the company's vice president of design, product development and marketing, told The Kansas City Star (http://j.mp/1sRu1VX) that changing lifestyles meant established representatives not only found fewer party sites available but also recruited fewer new reps to maintain or expand the sales force.

She said no particular event triggered the board's decision Tuesday to halt its business.

"We just were not seeing any significant changes in business activity from period to period," Carroll said.

Silpada's revenue also had been falling for six years, and Silpada's sales force had shrunk to 15,000 reps from roughly twice that total at its peak, she said.

"The company was still profitable. It's just that there were so many headwinds," Carroll said Wednesday.

The retailer grew to become one of the largest party-planning sellers of sterling silver jewelry in North America. It was acquired by Avon Products in 2010 for $650 million but was reacquired by the founding families in 2013. The company had nearly 200 employees, many of whom were let go on Tuesday.

A crew will remain on hand to liquidate inventory through the end of the year, and independent sales representatives will have through July 31 to sell Silpada jewelry and earn commissions.

Nancy Watanabe of Overland Park, a Silpada representative for nearly nine years, said it was business as usual until Tuesday's conference call with the board of directors when she learned Silpada would be shutting its doors.

"No one has any hard feelings. You have to do what you have to do," she said.

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Information from: The Kansas City Star, http://www.kcstar.com