The ongoing consolidation trend in the jewelry industry did a bit of an about-face in the first quarter, with North American jewelry company discontinuances falling 19 percent from the prior year, according to statistics released by the Jewelers Board of Trade (JBT).
Until this quarter, the number of industry closures had generally been increasing. For instance, 2016 showed a 50 percent increase in the number of businesses shutting down.
Despite the decline, a significant number of North American jewelry companies went out of business in the first quarter. Overall, 334 companies called it quits in the first three months of the year, down from 410 the prior year.
Retail jewelers comprised the bulk of that number, with 263 jewelers closing their doors in North America. Still, that’s also lower than last year’s number, when 310 jewelers closed. In addition, 45 wholesalers closed (down from 53 last year), and 26 manufacturers (2016 number: 47).
The stats somewhat contradict the trend in the larger retail sector, which has shown dramatic and increased consolidation so far this year.
Jewelers Board of Trade president Anthony Capuano cautioned against reading too much into one set of data.
“It’s very hard to say there’s a trend there,” he says. “The numbers are positive in that the rate of closures seems to have abated a bit. I’m encouraged. I hope it continues. But it’s a little too early to say there’s a trend of declining closures.”
Plus, he cautions, the industry is still shrinking: “We still have fewer stores. The overall direction hasn’t changed. The trend just hasn’t picked up momentum.”
In a strange twist, the number of businesses entering the industry also dropped. In the first quarter, the JBT recorded 48 new business listings in North America, a 34 percent drop from the prior year.
The overall number of JBT’s North American listings shrank 5.9 percent, to 27,706, from 29,439 last year. The current number breaks down to 20,843 retailers (19,969 in the United States), 4,073 wholesalers, and 2,790 manufacturers.
(Photo courtesy of Jewelers Board of Trade)