Almost 500 North American jewelry businesses discontinued operations in the second quarter of this year, according to the Jewelers Board of Trade (JBT). The figure is a 66 percent increase on the number JBT recorded in the second quarter of 2015, and provides a strong signal that the industry’s consolidation is continuing. A total of 475 number businesses discontinued operations in the United States and Canada together, with 460 of them being in the United States.
Of the total, 350 were closures of retailers, 77 were manufacturers, and 48 were wholesalers. In most cases (442), the companies ceased operations, though 21 merged or were sold, and 12 filed for bankruptcy. The JBT listed 27,745 jewelry companies at the end of the second quarter, compared to 28,705 in the second quarter of 2015, a 4.3 percent drop. The number of retailers fell to 20,666 from 21,543 last year. However, the number of companies entering the industry in 2016 increased by almost 3 percent to 81 this year from 67 last year.
The figures “are not that different from what we have seen before,” Anthony Capuano, president and CEO of Jewelers Board of Trade, told JCK. “Some Baby Boomer generation jewelers are not passing the business on to the next generation. When you look at the number of jewelry retailers compared to, say, hardware stores, it appears that consolidation will continue. I don’t think any of the fundamentals will reverse in the near future. It might abate a bit, but I think the fundamentals are there for consolidation to continue." However, he added: “Because of the uniqueness of jewelry and unique nature of the buying experience, I believe there will always be room for an independent jeweler who knows the market and sells products geared to the market. It’s harder to differentiate yourself if you’re a hardware store.”
Capuano pointed out that Commerce Department figures have shown rising jewelry sales this year even if not all those sales are happening at retail jewelry stores. “Jewelers that are creative and innovative and really know their market and are using new sales techniques, and emphasizing the experience of buying jewelry, will continue to do well,” he says. “Everyone recognizes that the retail environment is challenging, but there is definitely still room for innovative and creative companies in our industry.”