The number of specialty jewelers in America declined by about 1.5 percent between March 2009 and March 2010. This rate dropped from the 1.9 percent total loss in jewelers during 2009. Both of these percentages represent comparable annual rates of decline.

 

At the end of March 2010, there were 22,121 jewelry firms in America, down from 22,455 at the end of March 2009, according to new data from the Jewelers Board of Trade (JBT). Thus, 334 specialty jewelry retail firms exited the business, most of whom simply ran going-out-of-business sales. A few sold out to other jewelers while a very few declared bankruptcy.

 

This positive trend is consistent with expectations: due to a strong 2009 holiday selling season as well as the U.S. economic recovery which began sometime in 2009, the pace of specialty jewelers exiting the business has slowed.

 

Jewelry Wholesalers Exiting At A Rapid Pace

Unfortunately, the rate of decline for jewelry wholesalers remains stubbornly high. During the first quarter of 2010, the number of wholesalers declined by 4.2 percent from the same period a year ago. This drop-out rate was consistent with the 4.1 percent loss rate for the full year of 2009. It is no surprise that the number of jewelry wholesalers who are exiting the business is so large; the wholesale industry for virtually all retail categories in the U.S. is contracting as more retailers buy directly from manufacturers, thus bypassing wholesalers.

 

The rate of decline for jewelry manufacturers who exited the business during the first quarter was about 3.2 percent, when compared with last year’s first quarter. This was only modestly below the drop-out rate of 3.7 percent for jewelry manufacturers for the full year of 2009.

 

The table below summarizes movement in the number of total firms in the U.S. jewelry business at the three key levels in the distribution channel: retailers, wholesalers and producers.

 

 

It is important to remember that the JBT counts only jewelry firms, not doors or stores. Therefore, Zale and Sterling are counted as one each in the JBT census.

 

Retail Jewelers’ Credit Quality Improves

In the first quarter of 2009, the JBT received 1,039 supplier claims against specialty jewelers who would not pay their bills in accordance with suppliers’ terms. This year, the JBT received only 620 supplier claims in the first quarter, and the average amount of a claim dropped by nearly 21 percent as the table below illustrates.

 

 

Jewelry Industry Bankruptcies Down

The total number of bankruptcies – including jewelry retailers, wholesalers, and manufacturers – declined by 47 percent in the first quarter of 2010 versus the same three-month period a year ago. This year, 18 firms filed for bankruptcy; last year, 34 firms went bankrupt in the first quarter. The JBT does not provide a breakout of bankruptcies by retailers, wholesalers and manufacturers.