In a stark revelation, the latest data released by the Jewelers Board of Trade (JBT) indicates a concerning trend in the U.S. jewelryindustry. The number of US jewelry businesses shutting at faster rateduring the third quarter, raising pressing questions about the future of this once-thriving sector. In a time when the online market has gained prominence, the persistent decline of brick-and-mortar jewelry stores is becoming a prominent issue.
US Jewelry Businesses Shutting At Faster Rate
The latest data from the Jewelers Board of Trade (JBT) shows that the number of operating US jewelry companies kept going down in the third quarter.
The great number of jewelry stores that shut down in 2016 was very scary for the business. According to National Jeweler, the number of stores closing in the third quarter of 2016 reached a record high of 400. At least 75% of these were retail jewelers.
The JBT said Monday that 179 businesses shut down in the three months ending September 30, up from 160 in the same time last year. There were 23,301 companies in the US industry, which is 2.6% less than in the third quarter of 2022.
Out of the companies that shut down, 147 did so for other reasons and 22 did so because they were merged or taken over. The JBT said that two of them went bankrupt. At the same time, there were 90 new businesses, down from 108 the year before.
At 17,669, down 2.7% year over year, retailers still made up most of the business. The number of wholesale businesses fell 1.8% to 3,379, and the number of industrial businesses fell 3.2% to 2,253.
The JBT gives credit information to the trade. During the quarter, 881 companies in the US and Canada had their credit scores lowered, compared to 988 companies at the same time last year. It also raised the scores of 728 businesses, down from 733 from July to September 2022.
Since the online market has been around for a while, why have so many jewelry stores closed across the U.S. in the last couple of years?
Retail jewelers from the baby boomer group are getting close to or past retirement age. This means that they will have to shut down. They could give the business to their children or grandkids in their 20s and 30s, but they don't want to. It can be hard for baby boomers who want to keep their business to change to the changing market.
For instance, Wexler Jewelry, a third-generation family-owned jewelry store in Houston and one of the oldest jewelry stores in Texas shut down in December of last year. They closed after 97 years because "online competition was getting tougher, rents were going up, and profit margins were shrinking."
Since almost all big box stores have an online presence and sites like Amazon and eBay are still doing well, going to a store is just a waste of time. In 2016, 51% of all sales were made online, according to The Wall Street Journal. The rise from 48 percent in 2015 isn't very big, but it's still a clear sign of new shopping habits.
In fact, about 1 in 10 guys today choose to buy their engagement ringsonline. This has helped online jewelers become very popular, making them tough competitors for any shop. Whether you look at a big company like Tiffany's or a small shop run by a family, they can't keep up.
It's no longer fun to buy goldin a store. Everyone wants time and space to make a choice, whether they are shopping for an engagement ringor a new watch. Having a salesperson hover over you can be stressful.
Final Words
The jewelry business is moving very quickly. In reality, people shop for goods in very different ways now than they did twenty, ten, or even five years ago. What used to be a day trip to the jewelry store has slowly turned into an online market that is easier for shoppers to get to than ever.
CEOs of retail jewelry conglomerates and people who study the jewelry business are all looking closely at the downward trend in retail sales. In fact, many CEOs have been stepping down because their companies' finances have been bad.
For example, the well-known high-end jewelry store Tiffany & Co. recently had bad financial results. Because of this, Frederic Cumenal, who used to be CEO of Tiffany, quit just after the beginning of this year.