Jewelry Industry Shrinkage Trend Continues
This news looks awful as if the economy including the spending habits of the 1% and 1/10th% are steeply trending down. By implication, this flies in the face of the improving economy as described elsewhere. Well that hasty conclusion would be largely wrong.
How would I know? I work for a place that supplies the metals or alloys that get blended with gold or silver or platinum to make that jewelry. We do our homework. We stay tapped into all the trade data we can.
The jewelry industry is in a particular tough spot. Partly self inflicted. Recall selling your scrap gold? Some greedy jewelers lied about the karat/gold content incoming scrap (your old jewelry you may have sold) to pay less. That likely ruined your confidence in the product. You were told the previous jeweler put one over on you. The next birthday gift for a young lady probably did not bring 14kt to the top of your mind. Maybe the Apple watch did.
Partly not self inflicted. Buying habits now favor technologies over adornment. Young buyers grew up with the internet and a recession. Volumes are being written about this new generation of consumers. Suffice to say they are educated, discerning and demanding by the time they get to a store. Underemployed may be an additional factor on top of the rest. Non precious exotic metals formerly reserved for aircraft parts have become a novelty, sometimes with diamonds.
Whats our fix? What do we have to pry those tight dollars away from extra technology at home and earn the sale of gold again?
Transformation like this is hard. the old guard grew up without the internet. It was an understandable assumption young brides would insist on physically seeing her diamond when out shopping. Oops. We should shed the old school in part. I don’t mean more closures. I mean more modern skills. Equipment like that printer.
New technologies of our own are burgeoning. This is not the end it’s a transformation into a 21st century industry. We can print gold in 3d. We can make almost anything custom to exactly what you want. We have brilliant new metals like palladium and golds coated on amazing long lasting colors. We have silver work at a level not seen in a couple decades. The design can be done on a showroom workstation. Jewelry making equipment is smaller, more affordable and safer than ever.
We accept that an educated customer can be and is a better customer. We embrace the extra value they seek for their money. We back our products as well or better than anyone. We point out the value remains for the lifetime of the owner and sometimes longer. Frankly apologize for the greedy ones that exploited a moment of need.
The new era jeweler? Online friendly, socially responsible. Reliable and responsive to those consumers. Those guys are growing. Online sales are pretty good. When fashion again embraces precious metals like gold we will be ready.
In North America, a total of 216 retailers, wholesalers and manufacturers ceased operations in the second quarter 2015, compared with 185 in the second quarter 2014. Year-to-date, the number of businesses that have simply shut down is up 28 percent.
Consolidations, meanwhile, are down 43 percent so far this year. Kenyon said while it is likely there are deals “percolating” behind the scenes, not as many have come to fruition so far this year.
Bankruptcies essentially are flat. There have been 21 bankruptcies so far in 2014, compared with 20 at this time last year. Kenyon said this is the continuation of a trend seen for some time now—very few companies are opting to spend the money to go through a bankruptcy.
Other highlights from the JBT’s second quarter data include:
—The number of new jewelry businesses in the U.S. and Canada has totaled 152 so far this year, down slightly from the 159 at this point last year;