Closing jewelers and conflict gold were on commenters’ minds
When I entered the industry, there were in excess of 30,000 retailers nationwide meaning we have lost one-third of the industry by door count. Several of the wholesalers and manufacturers lamented to me that 2016 was the worst year they have experienced including 2009. In the meantime, Signet has now topped 3,600 stores. I see two pending issues that face the independent category. First, at what point do suppliers abandon building their business with the independent, and put their effort exclusively on chasing the majors? Second, independents continue to close their doors due to retirement. Bankruptcies are virtually non-existent, but there is no tangible resale value in the business, and the only one making money is the GOB companies. In an older article in The Wall Street Journal, jewelry was the last category dominated by the independent. While there will always be an independent presence (hopefully more than repair shops), the industry as a whole (manufacturers, wholesalers, designers, buying groups, and retailers) will need to work together to change the trend.
While the number this year might not be as high as 2009, the post-recession years presumably claimed the weakest businesses. The fact that after years of clearing out, the numbers are still in the same ballpark is noteworthy, and clearly indicates the trend still has a lot of momentum behind it. It’s not getting easier to make a traditional retail jewelry store work just because the competition is thinning out.
[Dodd-Frank] Section 1502 was the driver for responsible supply chains globally—without it, there will be less pressure on the industry to clean up its act. The best way forward would be to change Section 1502 to reflect the [Organization for Economic Co-operation and Development]’s due diligence guidance (which would fix the “avoid supplies from Africa” issue), but that would be a well-informed and globally responsible way forward. Don’t hold your breath…
[Richline] fully support[s] the continued implementation of Section 1502. We have organized our efforts for full compliance because the cause is worthy of these efforts. We do believe that the due diligence and traceability measures required by Section 1502 are an essential component to breaking the links between conflict and the minerals trade in eastern Democratic Republic of Congo. This legislation has substantially helped strengthen our own responsible supply chain management practices.
The author is the chief marketing officer of Richline.
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