In the last few years, the jewelry industry has almost become desensitized to hearing about jewelry businesses closing, much like there’s a growing psychological numbing about the number of people infected, and dying from, COVID-19.
In the first quarter of 2020—pre-COVID—291 jewelry businesses ceased operations, according to the Jewelers Board of Trade (JBT). That’s more than three businesses closed per day.
However, JBT’s latest report showed a dramatic drop in that number. The Providence, R.I.–based group found that only 78 jewelry businesses ceased operations during the second quarter. (“Ceased operations” includes companies that closed, consolidated, or filed for bankruptcies.) It also listed 24 new openings.
That seemed like surprisingly good news during these dark times. JBT president Erich Jacobs (pictured) says he believes that low number mostly stems from JBT’s difficulty in determining which stores had truly closed at a time when many stores were shut in some form or another.
“’Ceased operations’ is a fairly high bar for us,” he says. And determining that “takes a lot longer in this environment.”
For instance, the JBT will often send out mail to a store, and if the mail is returned, then that’s a pretty clear sign the store is no longer around. It will also call the store to see if its number has been disconnected. And finally, it will ask its neighbors if the store is operational.
All of which is far more difficult during a time, like last quarter, when so many stores were closed by government decree. For a long time, some bankruptcy courts were also closed, which made a dent in the numbers as well.
Finally, when a long-lasting store calls it quits, it tends to spur local news coverage. (That’s how JCK compiles its list of store closings.) But right now, so many stores have shut, and there’s so much crazy news to cover, that even a longtime retail mainstay shutting its doors no longer merits the front-page coverage it once did.
Going-out-of-business sales often draw a huge rush of shoppers. But it’s hard to keep cash registers ringing at a time when many shoppers remain scared to leave their homes. As a result, many liquidation sales have been delayed.
Jacobs says JBT expected the “ceased operations” number to drop last quarter but believes that it will rise by the end of the year. The feedback he’s getting from members is mixed.
“About 50% will tell me they had a great June,” he says. “And then some say business is way off.”
A lot depends on whether the store is in an area that is recovering from, in the midst of, or hasn’t experienced the ravages of COVID-19. Another factor: how well they use their online stores.
“JBT historically did not really focus on the online business,” Jacobs says. “We are focused on it now.”
JBT also tallies statistics from Canada. That country is widely considered to have done a better job with this virus than the United States—on July 19, it listed 339 new cases versus our 63,201—so it might be worth looking at if there’s a divergence there.
America is very much in a holding pattern until we get control of this virus. That includes this industry and the way it measures itself. Certain numbers may look better, but, unfortunately, we’re not out of the woods yet.
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