While the number of jewelry business failures in the U.S. market jumped in 2009, there were two striking factors to keep in mind: The number of jewelry business failures was not as high as the industry had feared it would be and jewelry wholesalers suffered the highest failure rate.

 

Jewelry wholesalers experienced the highest failure rate, closely followed by jewelry manufacturers. The failure rate of jewelry retailers was much more moderate and almost in line with the average of the past decade.

 

The Jewelers Board of Trade’s (JBT) final tally of U.S. jewelry retail firms, wholesalers and manufacturers for 2009 is as follows:

 

Source:  Jewelers Board of Trade

 

Number of Jewelry Doors Falls

While the latest preliminary census of jewelry doors is for the second quarter of 2009, it reflects the impact from the loss of Whitehall, Friedman’s and other chains. Two years ago, there were more than 26,000 jewelry doors in the U.S.; today, there are fewer than 24,000, a 5.6 percent decline.

 

Number of Jewelry Retailers Declining

It is no surprise that the number of U.S. jewelry retailers fell for the 14th consecutive year. Retailing in America has been undergoing consolidation for several decades, and the jewelry sector is one of the few remaining unconsolidated categories.

 

The good news is this: despite the recessionary environment, the number of U.S. jewelry firms dropped by only 1.9 percent in 2009, barely above the average annual jewelry retailer decline rate of 1.7 percent in the past decade. It is important to understand that this number represents the number of jewelry firms in the U.S., not the number of jewelry doors. The 22,182 jewelry firms reflected in the year-end census counts Zale and Kay as one each.

 

Further, fewer new jewelry firms opened during the year compared to prior years, but the number of jewelry firms which closed was not dramatically different from the prior two years, as the graph below illustrates.

 

Source:  Jewelers Board of Trade

 

Jewelry Wholesale Firms Down

The number of jewelry wholesale firms which dropped out of the market in 2009 rose sharply. After hovering around 4,500 firms for several years, the number of jewelry wholesalers declined by just over 4 percent to 4,356 firms at the end of 2009.

 

Census of Jewelry Manufacturers Declined in 2009

Jewelry producers continue to close their high-cost U.S. facilities in favor of lower-priced production capabilities offered abroad. Further, the current recession also had a negative impact on jewelry manufacturers. As the graph below illustrates, after peaking in 1999, the number of jewelry manufacturers has continued to decline each year, based on data from the Jewelers Board of Trade.

 

Source:  Jewelers Board of Trade

  

Additional detailed census information about the American jewelry industry and indepth analysis can be found here.