No. of Jewelry Store Closures Drops Sharply in Q1

JBT data shows that 73 U.S. retailers went out of business in the first quarter, down from 241 in the same period last year.

Michelle Graff michelle.graff@nationaljeweler.com

Warwick, R.I.—The number of jewelry retailers, wholesalers and manufacturers calling it quits dropped sharply in the first quarter, data from the Jewelers Board of Trade shows.

In North America (defined by JBT as the United States and Canada), 99 jewelry businesses—83 of which were retailers—closed in Q1, down from 310 companies in the first quarter of last year. That is a 68 percent drop.

Consolidations numbered 30, down from 48.

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Looking at the U.S. market alone, 89 jewelry businesses ceased operations in the first quarter, down from 288 in the first quarter 2018.

The number of retailers that went out of business in the U.S. declined by more than half, from 241 in Q1 2018 to 73 in Q1 2019. That is a 70 percent drop.

U.S. jewelry business consolidations (acquisitions and mergers) totaled 30, down from 45, while bankruptcies fell by almost half, from 10 to six.

“Short-term, there’s been a slowdown in people closing,” JBT President Richard Weisenfeld said in an interview last week. “Is that going to keep up? I’d be guessing if I’d say yes or no.”

He noted that it’s difficult to draw long-term conclusions from quarterly data, but did predict that the industry will continue to contract. At what pace, though, he is not certain.

While the number of retailers, wholesalers and manufacturers exiting the industry declined, data shows that the number of new jewelry businesses entering also slipped.

JBT’s New Businesses Summary for Q1 shows that the industry welcomed 57 new jewelry businesses in the first quarter—48 retailers, seven wholesalers and two manufacturers. That is fewer than the 64 that entered in the industry in the first quarter last year.

All the business openings were in the U.S.

Weisenfeld said the number of new businesses, particularly retail jewelry stores, could pick up as the year progresses as new retailers open to fill the void left by closing independents.

Another potential growth area he sees for the industry is in lab-grown diamonds, a product, he recognizes, that does not come without controversy.

There is a debate in the industry over how to grade lab-grown diamonds, how to price them, their long-term value and environmental impact, as well as confusion over how to describe them.

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But Weisenfeld said as a new product

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line, man-made diamonds will impact all levels of the industry, possibly helping to shore up business for certain retailers, manufacturers and wholesalers and slow the shrinkage.

“It’s been a long time since there’s been a whole new category, in my mind, that’s been sure to sell,” he said. “It’s like a gift for the industry.”

Michelle Graffis the editor-in-chief at National Jeweler, directing the publication’s coverage both online and in print.