The number of JBT listings shrank 4.3 percent in the second quarter
In the second quarter of 2016, 475 North American jewelry businesses discontinued operations, according to the latest statistics from the Jewelers Board of Trade (JBT).
The number includes the United States and Canada. In the United States, 460 businesses discontinued operations.
That’s a 66 percent increase in closures compared to the number JBT logged in the second quarter of 2015 and a sign the industry’s ongoing consolidation is not yet over.
According to the JBT, 350 of those closures were 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.
Overall, 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 from last year’s 21,543 to 20,666 this year.
The stats “are not that different from what we have seen before,” says Anthony Capuano, president and CEO of Jewelers Board of Trade. “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.”
But he adds: “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 product geared to the market. It’s harder to differentiate yourself if you’re a hardware store.”
He notes that Commerce Department stats for jewelry sales have risen 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.”
On a positive note, the number of companies entering the industry in 2016 increased 2.7 percent, from 67 last year to 81 this year.