Buffett: A quarter of all jewelry companies will be gone within year
wsielaff@nationaljeweler.com
Warren Buffet is forecasting that 25 percent of all fine jewelry companies, across the distribution pipeline, will be out of business within 12 months. I received this information on deep background from a very trustworthy source.
As you're probably aware, Buffett's Berkshire Hathaway has been buying up both supply and retail fine jewelry companies over recent years. And to state the obvious, this is not a man who makes statements like this lightly. He is fully aware of how much impact his opinions can have on a marketplace.I dislike being the bearer of bad news as much as anyone, but I believe I wouldn't be living up to my responsibility if I didn't bring this to your attention.
Here at Las Vegas trade show market week, there's an eery feeling of disorientation the likes of which I've never experienced since I started coming here in 1991 when the shows were first established. There's both more traffic than I expected, to be honest, and there are exhibitors reporting that they're writing business.Conversely, there are way too many industry members missing from the mix this year who, until this year, I could not have fathomed a Las Vegas show week without. The biggest question, as always at a trade show, but far more important this year, is that of inventory. As retailers live off existing stock to help maintain feasible cash flow, ordering from the supply chain has essentially been at a standstill. Many just can't imagine how suppliers are managing to pay their own bills, especially when you consider the difficulty of obtaining financing thrown in.
There was a panel here yesterday on the "evolution of the business." Unfortunately, and not surprisingly, there wasn't a heck of a lot of visionary insight provided. Nobody knows. Except Buffet, I guess. I really hope he's wrong.
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