Surveys

1,564 Jewelry Businesses Ceased Operations in 2016

SurveysFeb 09, 2017

1,564 Jewelry Businesses Ceased Operations in 2016

The figure from the Jewelers Board of Trade includes the U.S. and Canada and represents a 64 percent increase over the prior year.


Warwick, R.I.--Year-end statistics from the Jewelers Board of Trade are what we thought they would be. 

After rising sharply throughout the year, the number of retail jewelers, wholesalers and manufacturers in the United States and Canada that closed down in 2016 totaled 1,564, compared with 956 in 2015. 

That is a 64 percent year-over-year increase.

Breaking it down by category, there were 1,190 retail jewelers in the U.S. and Canada that ceased operations, up 53 percent from 2015; 235 wholesalers, up 81 percent; and 139 manufacturers, up 190 percent. 

Including consolidations (sales/mergers) and bankruptcies, the total number of business discontinuances reached 1,718 in 2016, a 54 percent increase over 2015.

In an interview with National Jeweler on Tuesday, JBT President Anthony Capuano said the fact that business discontinuances increased did not surprise him, though end number of closures was slightly higher than expected.
RELATED CONTENT: Demographic Drop-off
He said that the main factor driving the increased rate of closures is that many business owners are at or near the age of retirement, and they are finding themselves at the helm of companies that are no longer as robust as they once were with, in many cases, no next generation waiting to enter the family business.  
RELATED CONTENT: What It Feels Like to Close My Store
During the interview, Capuano also addressed an online conversation that cropped up following publication of the JBT’s third quarter statistics about jewelers shuttering their stores but remaining in the business either as private, appointment-only jewelers or custom designers.

The commenter felt that the JBT’s numbers for jewelry store closures were inflated because they did not take into account these individuals, but Capuano said they are not.

“That might be some of them, but it’s certainly not 1,190 of them.

“I don’t believe that 1,190 (jewelers) are going to home businesses, or seasonal businesses or part-time businesses. I think the majority of them are just discontinuances,” he said. 

He added that even if some jewelers are remaining active in the industry, a store closure “still represents a contraction in the business; they don’t have a reason to open full time in a distinct location.” 

New Business Openings
While more companies continue to exit the industry, new business listings have remained relatively flat over the past three years, with the JBT adding about 260 to 290 new jewelry business listings in the
U.S. and Canada each year. 

In 2014, there were 261 new jewelry business recorded by the JBT. The following year, that number rose to 289 but fell again in 2016, to 275. The Northeast and the Southeast accounted for the majority of new listings last year.

“There are people willing to take a chance in this business,” Capuano said.

He also noted that retailers accounted for the vast majority of new businesses in the industry last year. There were 218 new jewelers, compared with 43 wholesalers and 18 new manufacturers. 

At the end of 2016, JBT’s total listings stood at 27,950: 21,007 retailers, 4,119 manufacturers and 2,824 manufacturers in North America. That is down 6 percent from 2015.

Here are some other trends for 2016, as outlined by the JBT:
--Bankruptcies continued to decline, totaling 34 in 2016 compared to 40 in 2015. (On a comparative note, that number was three times as high around the peak of the financial crisis.) 

Capuano said the jewelry industry is not alone in seeing bankruptcies slide, as it is a trend being seen in many industries nationwide. Company bankruptcies as a whole in the U.S. were down 2 percent year-over-year in the first three quarters of 2016, with what filings there were concentrated in the oil, gas and energy exploration industries. 

--Business consolidations (mergers and acquisitions) were relatively flat year-over-year, 118 in 2016 vs. 114 in 2015. Capuano said there are fewer interested parties that want to buy a brand, company or a store in a nearby market today. 

--Credit rating metrics remained stable, with an upgrade to downgrade ratio of 0.97x at year-end compared with 0.95x at the end of 2015.

--Collection claim activity was down, and so was the size of the average claim, which fell 8 percent to $7,299. 

In 2017, Capuano said he expects consolidation to continue. While the rate at which businesses are closing might abate slightly, he does not expect the trend to reverse itself this year.
Michelle Graffis the editor-in-chief at National Jeweler, directing the publication’s coverage both online and in print.

The Latest

CollectionsJan 21, 2022
Piece of the Week: Emily P. Wheeler’s Heart Necklace

It’s a whimsical update to a classic riviere.

SourcingJan 21, 2022
Stephen Lussier to Retire After 37 Years With De Beers

Tiffany executive Mark Jacheet will succeed Lussier, who officially steps down in April.

Recorded WebinarsJan 21, 2022
Watch: What the Industry Can Expect for Tucson 2022

National Jeweler chats with three colored stone dealers on recent buying activity and what that could mean for the upcoming gem shows.

Brought to you by
Melee the Show Launches Tucson Event, Returns to New York in 2022

The boutique tradeshow, happening first in Tucson then New York City, brings together upscale designers from around the world.

SourcingJan 21, 2022
HK Designs Named ‘Great Place to Work’

The Indian jewelry manufacturer joins Signet Jewelers, Target, and other companies who earned the certification.

Weekly QuizJan 21, 2022
This Week’s Quiz
Test your knowledge of the latest jewelry news with this quick test.
Take the Quiz
FinancialsJan 20, 2022
Signet Raises Guidance After Strong Holiday Sales

The jewelry giant’s holiday season revenue was up 30 percent year-over-year.

SourcingJan 20, 2022
Tara Pearls Is Ready to Unveil Its ‘Most Significant Acquisition’

With a retail price tag of $1 million, the special pearl will be unveiled at the upcoming Centurion show.

Brought to you by
Rare & Forever Can Help You Tell A New Story At The Counter And Close More Sales!

A.I. technology is revolutionizing the jewelry business through more accurate and consistent diamond grading.

MajorsJan 20, 2022
Robbins Brothers Eyeing Expansion, Adds New VP of Stores

CEO Marc Friedant discusses what’s next for the jewelry chain following management’s move to buy it back from a private equity firm.

×