Internet jeweler Blue Nile's blue-suited CEO, Diane Irvine, may be the polar opposite of jeans-wearing company founder Mark Vadon, but he confides that "Diane can drink beer with the best of them."
To look at them, Diane Irvine and Mark Vadon are a business odd couple.
Irvine, the chief executive of Seattle-based Internet jeweler Blue Nile, favors dark-blue suits with sensible shoes, keeps her short blond hair tucked neatly behind her ears, and sticks to her talking points.
Vadon, Blue Nile’s executive chairman and co-founder, prefers jeans and boots, rarely shaves and talks off the cuff.
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“I’m the disorganized, chaotic person,” Vadon says. “She’s very well-put-together and organized. We’ve always been a good complement to each other.”
But when Vadon met Irvine, he wondered if she might be too buttoned-up.
It was 1999 — the booming dot-com era — and Blue Nile needed a chief financial officer. Vadon, then the CEO, sought help from a headhunter, who produced some 30 candidates. Among them was Irvine, previously the CFO of Plum Creek Timber.
While Irvine impressed Vadon in interviews, she won the job only after grabbing a beer with the Blue Nile staff at Kells pub near their Belltown offices.
“Back then, the company was mostly 20-somethings wearing jeans and T-shirts. Maybe she shows up and sees what’s going on and runs out screaming,” he remembers thinking.
“But Diane can drink beer with the best of them.”
Irvine, a married mother of three, went on to become president in 2007 and CEO in 2008, when Vadon stepped down from day-to-day operations to provide strategic direction.
Last month, Blue Nile reported its seventh straight quarter of year-over-year sales growth, after being hit hard by the Great Recession. It posted a first-quarter profit of $2.4 million on sales of $80.2 million, up 8 percent from a year ago. Its stock, which dropped below $20 in 2009, currently trades in the mid-$40s.
“After sales declined 7 percent in 2008, people weren’t sure she could right the ship,” said Internet analyst Herman Leung, of Susquehanna International in San Francisco.
“Starting in the second quarter of 2009, she turned it back into positive territory,” he said. “She gave consumers a wider range of products at different prices and expanded a little bit more into the nonengagement-jewelry segment.”
Irvine, 52, grew up on a farm in Illinois as the second of five children. The family raised cattle, as well as chickens that produced some 4,000 eggs daily.
“My job, when I got home from school, was collecting and washing eggs,” she recalls. “I also drove a tractor for my dad, baled hay or did whatever else needed to be done. It was a lot of hard work, but I kind of developed a work ethic.”
That discipline is reflected in Blue Nile’s balance sheet. Last year, the company’s overhead costs stood at 15 percent of sales, roughly the same as in 2009 and 2008. It ended 2010 with $113 million in cash, up from $78 million a year ago.
If there was any lingering doubt about whether Irvine belonged at Blue Nile, it was erased on Sept. 11, 2001, when she, Vadon and three other employees walked to a meeting with diamond suppliers in midtown Manhattan.
After only two blocks, they saw smoke coming from the Twin Towers and returned to their hotel. They spent the next few hours watching TV news, assuring friends and family they were OK, and at one point meeting with an Israeli diamond supplier who had survived the Holocaust.
“I’ll always remember the smell of smoke and all the posters of missing people,” she says. “There was just this overwhelming sadness.”
On the third day after the terrorist attacks, they rented a Ford Expedition and began the 3,000-mile drive from New York to Seattle. (Although a government ban on commercial air travel had been lifted, new passenger flights were slow to resume.) Taking turns behind the wheel, they arrived home in 46 hours.
“Mark, being the data- driven person that he is, had a spreadsheet of every driver’s mileage and the time it took them to drive that far,” she says of Vadon, laughing. “I only got one shift because I didn’t drive fast enough.”
Now, Irvine must steer Blue Nile through a shaky economic recovery, as well as changing attitudes about marriage.
A recent study by Pew Research shows today’s young adults are slower to marry than their counterparts in older generations.
Engagement rings account for nearly 70 percent of Blue Nile’s annual sales, so the delay in marriage among “millenials” could be bad for business. Only 22 percent of those between 18 and 30 years old are married, according to Pew Research. When GenXers were the same age, 30 percent had tied the knot. What’s more, 25 percent of millenials aren’t sure they want to marry, including 5 percent who claim no interest in marriage.
In an earnings call last month, a financial analyst asked if the royal wedding had prompted more people to buy jewelry from Blue Nile.
“Lots of interest for sapphires,” Irvine replied, referring to Kate Middleton’s blue-sapphire engagement ring.
“We’ll see if it inspires more people to get married, though,” Vadon said.
Still, Irvine isn’t waiting around. Blue Nile’s 2011 offensive includes a broader array of nonengagement offerings, such as colored gemstones, pearls and sterling silver. The new offerings are meant to draw more women customers.
“This will be the most aggressive product launch in our history,” she told analysts.
It’s a direction that Irvine — one of a handful of women CEOs at publicly traded companies based in Washington state — seems uniquely suited to take. While men remain Blue Nile’s core customers, women are a big untapped market.
“More than half of our traffic is women,” she says. “Many times, they’re building rings and emailing them to their significant other. We want to cater to men, but expand the audience.”
Recently, Blue Nile moved its corporate offices from Seattle’s Chinatown International District to Pioneer Square. During the search for a new headquarters, Irvine briefly considered downtown’s financial district.
What did she not like about the financial district?
It was too buttoned-up, she decided.
Amy Martinez: 206-464-2923 or email@example.com