Remembering Mr. Alexander Hasenfeld, our beloved founder and president.
A true giant in our industry, as he was in life.
He will be greatly missed.
Profile in Extraordinary Perseverance, Determination and Foresight:
Mr. Alexander Hasenfeld, Founder and President
(by Steve Feldman, with excerpts taken from Rob Bates’ “Hasenfeld, Apart from the Herd” in the June 2008 issue of JCK)
Recent challenges brought on by a global unstable economy, cannot be overstated. These have been frightening times for many of us. But the story of our company Founder and President, Mr. Alexander Hasenfeld, helps us put this all into proper historical perspective. More important, it should instill in us the confidence that we can, and will, work through this.
The War Years
Mr. Hasenfeld was born in Satmar, Hungary, the child of religious parents. During World War II, he was sent, together with 16 family members, to Auschwitz, the most notorious Nazi concentration camp. He survived in part by participating in the camp’s underground economy. He worked outside in a munitions factory (where he lost a finger), and sold suits from the Bekleidungkammer, the camp’s garment warehouse, to civilian supervisory personnel. He was paid in cigarettes, the camp currency, and whiskey, hiding the proceeds in his prisoner’s uniform (He remembers the price: 150 cigarettes for a suit. 250 cigarettes for a bottle of whiskey). “There were only three or so people involved in the business,” he says. “Just like in the diamond business, your word was your bond. It was very dangerous, but we had nothing to lose, since we were all very aware that we were brought to the camps with no intentions to be allowed to leave alive.”
On January 18, 1945, Mr. Hasenfeld was part of the infamous “death marches”, first heading west from Auschwitz to Dachau. They walked night and day, with no food, in sub-freezing temperatures. Fewer than half survived. Most froze to death. Others starved. His memories of all this is vivid to this day. When I showed surprise, and asked how he remembered all these details, his answer was simple and immediate… and chilling: “This isn’t memory. I can see the pictures in my mind, every single minute of every day.” What he saw and what he had to overcome were, quite frankly, almost impossible to comprehend.
Later, to avoid both the Russian and American forces who were fast closing in, they marched again from Dachau, east to the Austrian border (which by then was already independent). But Austria refused to let them enter. Allied forces were close now. A German lieutenant ordered the prisoners to lie down to be shot (a treatment known as Los Hinlegen) But his female companion pleaded with him to flee, insisting there wasn’t enough time. So instead, they simply got in his car and drove away. Then others followed. After all these prisoners had been through, now, all of a sudden, they found themselves unprotected… and free.
New Beginnings in America
Hasenfeld immigrated to America in 1948, speaking little English. Like many Jewish transplants from Europe, and at the advice of his brother-in-law who was in the rough business in Antwerp, he went into diamonds. Shortly afterward, he met his wife, who, coincidentally, lived across the street from him in Hungary. “I knew her family,” he says, “but not her.”
He had $300 to learn the abc’s of the diamond business. Everything else he learned on his own. Working as a cutter, he soon saw that cutters were a dime a dozen. “Everyone came and sold the same thing,” he says. “I wanted to separate myself from the herd.”
That he did. In an effort to get what he calls “every last drop of juice from the stone,” he realized that if certain polished stones seen on the market were recut, he could make extra money. Today, this is standard procedure, but at the time it was almost revolutionary. “If I saw a stone with an imperfection, to leave it there would be a crime,” he says. “If it was an SI stone and I turned it to VVS, I could triple the profit.”
As more imperfect diamonds began coming Hasenfeld’s way, other cutters looked on in wonder as the stones he worked on got bigger and bigger. Eventually they figured out what he was doing. “I had about five or six years’ peace,” he says today. “Then they all emulated me.”
By that time, he had started his own business. Then, in 1950, he discovered he couldn’t walk. He had contracted tuberculosis of the spine, most likely from his time in the concentration camps. After he was sent to New York and later Denver to recover, his wife helped run the business, receiving special permission to enter the Diamond Dealers Club (women were then banned).
While recuperating in Denver, he continued running his business, making local retail contacts. “I would visit them during the time the doctor allowed me to leave the hospital,” he says. “It started where I could go out for one hour, then it became two, three. So I went straight to the bank, and to my safe deposit box, and then I visited my customers.” He did the rest of the transactions from his hospital bed.
In the 1950s, he was one of a handful of diamond companies to explore what was then new territory: Asia. The first country he visited was Japan. After finding an interpreter he clicked with—he “spoke English better than I did,” Hasenfeld says—he brought the man into the business, even giving him commissions on transactions he translated for.
Growing the Business
For a spell, Hasenfeld’s company, Hasenfeld-Stein (Stein is his son-in-law), was America’s second-largest diamond exporter. Eventually his sons followed him into the business, although he insisted they all get MBAs beforehand. “It gave them respectability,” he insisted.
And yet Hasenfeld runs his business in a way they don’t teach in business school, but probably should: with a minimum of debt. “I never borrowed money in order to buy goods,” he says. “I still hold that philosophy today. We always stretched as far as capital allowed, but never beyond. My banker tells me we are the only company whose DTC sight he never had to finance.”
That turned out to be the company’s salvation during the great market crash in the early 1980s. “In those days people went bankrupt because the interest rate was 18 percent,” he notes. “We didn’t grab every last dollar. That’s why my customers stuck with us.”
Amid the wreckage of the early ’80s, the company saw that it was time to diversify. One son went into real estate, another went into insurance. His son Hertz, now vice president of the company, worked with him in diamonds and focused on U.S. retailers.
In 1991 Hasenfeld-Stein became a Diamond Trading Company sightholder, a position the company held until last year, when (luckily as it turned out) it lost its sight in the latest DTC “selection.” This is an event Hasenfeld is quite philosophical about. “It was only 20 to 25 percent of my production, so what did I lose?” he says, noting that, after the advent of Supplier of Choice and its miscellaneous requirements, being a sightholder cost him over $1 million a year.
Staying in Front
Meanwhile, the company keeps trying new ideas. Its New York factories employ a mixture of human labor and robots. “When I saw the machines were available, I jumped on it,” he says. Most recently, the company introduced the Firemark™ Princess, the result of a new patent pending process that for the first time ever, consistently gives a Princess Cut brilliance and light performance to rival an Ideal Round.
It’s a full plate for a person who has accomplished so much. But from all indications, Hasenfeld is still very much involved in all aspects of his business, using newfangled gizmos like PDA’s and e-mail in dealing with his company’s clients. (“There are some people who will talk only to him,” notes marketing director Steve Feldman.) He recently wrote in an e-mail that he prays for “a long life to enjoy all or some of the plans that I have.”
There are quite a few of those. Hasenfeld says his own father taught him to “never be satisfied with what you have. Always try further.” That has formed what might be called his business philosophy: “You shouldn’t imitate. If you have an idea, try it. If you don’t try, you never know.”
I asked one final question: To what do you attribute your business success? As always, his answer was to-the-point, and immediate. “No debt. No partners.” When pushed to explain, he said: “To this day, we’ve never borrowed money to finance our business. And I’ve never taken in outside partners. All our family businesses, including Hasenfeld-Stein, are owned and operated by members of the family. The buck stops here.”
In an industry known for being stuck in its ways, that has set him far apart from the rest of the herd.