Jewelers Board of Trade: 50% Rise in U.S. Jewelry Business Closures in 2016

Polished
02/02/2017 16:56

"Last year, 1,669 jewelry businesses (including manufacturers and wholesalers) ceased operations in the United States, a 50 percent jump from 2015, according to the Jewelers Board of Trade", writes JCK's Rob Bates. In total, the number of jewelry businesses fell by 6%. He notes that a surprisingly large number of businesses closed their doors in the fourth quarter, traditionally a time when the trade is in full swing. Bates provides the gory details: 1,269 U.S. retailers shut down in 2016 (319 in fourth quarter), 250 wholesalers (60 in fourth quarter), and 150 manufacturers (34 in the fourth quarter). The manufacturing sector contracted at the highest rate, with total closures more than doubling to 150 from 59 in 2015; wholesale closures rose 85% to 250; while the number of jewelry retailers that closed increased 43% to 1,269, JBT reported. In addition, 275 new jewelry businesses were created in the United States, 58 in the fourth quarter.  

"Despite appearances, this was not the worst year ever for business closures," according to JBT president Anthony Capuano. in 2009, more than 2,000 businesses closed their doors, and that year witnessed many more bankruptcies than this past year, where the majority of closures were due to retirement. Capuano: “I don’t think we are seeing anywhere near recessionary conditions. These businesses are not leaving unpaid obligations. It’s mostly businesses without succession plans, or the owners’ kids don’t want to come in the business.” Capuano added, “I see no reason to believe the number of jewelers will not continue to decrease. I would hope that if we have better years, maybe the rate of decrease will abate a bit. But I think the trend will continue ... I always point to the opportunity,” he says. “If there were five businesses in town, there is presumably more business for the four that are left. Because jewelry is such a personal purchase, it will always favor the existence of brick-and-mortar.”