Some 585 jewelry retailers and wholesalers left the industry in the first half of the year, a 12.4 percent jump from 2014, according to the latest statistics issued by the Jewelers Board of Trade (JBT).
In 2015’s first six months, some 485 U.S. and Canadian companies left the industry, the group said. That number includes companies that ceased operations, declared bankruptcy, and were merged or acquired.
In the same period, 150 companies came into the industry, slightly lower than the 156 that entered it last year.
The 12.4 percent rate is an improvement over last year, when the industry saw a dramatic 32 percent jump in business discontinuances.
“The size of the industry is shrinking a little more,” says JBT president Dione Kenyon. “The rate of discontinuances is flattening a little bit. Some people are holding on and are trying to decide what to do.”
“I would not say the industry is growing,” she adds. “But the people who have made it this far have pretty good potential to keep going.”
She notes that jewelry sales have generally tracked the U.S. gross domestic product, which rose 2.3 percent in the last quarter.
“If the [U.S.] economy can’t grow more than 2 percent, jewelry sales aren’t going to grow more than that,” Kenyon says. “And this is the best economy in the world right now.”
Still, there were some positive indicators, including a 5 percent uptick in credit inquires.
“We are seeing an upturn in activity,” she says.
She notes that Commerce Department reports of drops in U.S. jewelry sales may not be as bad as they first appear, given that the cost of materials has fallen.
“When you think about deflation in precious metal prices and in diamond prices, it is not surprising that sales are down,” she says.
But the deflation does pose perils, she adds: The outlook for the diamond industry seems troubling, and many retailers that have sustained themselves by buying gold no longer have that option.
“Gold-buying saved some people,” she adds. “It gave them cash flow. When you strip that away, people will have to sell their merchandise at lower price points.”