The recessionary environment continues to take its toll on retail jewelers in the U.S. market. For the first nine months of 2009, the census of retail jewelry firms has been reduced by a net (openings minus closings) of 372 retail jewelry firms – 1.6 percent of the total jewelry firms in America – notably more than the net loss of 308 jewelry retailers for the same nine-month period a year ago.

 

At the end of September 2009, there were 22,251 retail jewelry businesses in the U.S., according to the Jewelers Board of Trade, down from 22,623 on the first day of 2009. Each U.S. jewelry firm is counted only once, without regard to the number of stores (doors) it operates. Hence, Zale, which operates roughly 2,000 stores and kiosks, counts as one firm of the 22,251 firms in America in this census.

 

Highlights from the Jewelers Board of Trade report on the census and fiscal health of the U.S. jewelry industry for September 2009 and year-to-date period showed the following:

 

• The industry census of retail jewelry firms declined by a net of 20 jewelry firms in September. This represented 13 new jewelry retail firms, offset by 33 existing jewelry firms that closed. During September 2008, there were 15 openings, offset by 15 closings. Thus, the number of closings during September this year was more than double the number of closings in the same month a year ago.

• The industry census declined by a net (openings minus closings) of 372 jewelry retail firms in the first nine months of the year. This represented 135 openings, offset by 507 closings. Last year, there was a net decline of 308 retail jewelry firms in the first nine months – 137 openings, offset by 445 closings.

• The average vendor claim for unpaid invoices against retail jewelers in September was $8,365, up 28 percent over September 2008. The year-to-date average claim was $8,651 in 2009, up 11 percent from the prior year.

• The number of vendor claims against jewelers in September was 225, down 19 percent from the same month in the prior year. The total number of claims against jewelers in 2009 was 2,641, down 1 percent from the prior year.

• A total of 83 jewelry businesses – retailer, wholesalers and manufacturers – have declared bankruptcy so far this year, about double last year’s year-to-date level of 43.

• A total of 1,578 jewelry businesses – retailers, wholesalers and manufacturers –have vanished from the U.S. market by bankruptcy, merger, consolidation or simply closing their doors, a 60 percent increase from the first nine months of 2008.  

Conclusions & Outlook

• While the number of jewelry firms closing is above last year’s level, it is not as high as many had expected. This is because many of the weaker competitors closed their doors in 2007 and 2008.
• The number of doors closing in 2009 will likely be 1,000 or less, down from an estimated 1,200-1,500 last year. Two major chains failed in 2008. To date, no major chains failed in 2009.

Net Number of Retail Jewelers Continues to Drop

The graph below illustrates the steady decline in the number of retail jewelry firms in the U.S. market. At the beginning of 2008, there were just over 23,000 retail jewelry firms. At the beginning of 2009, there were just over 22,600 retail firms. At the end of September, the number of retail jewelry firms in the U.S. had dropped to 22,251, as the graph below illustrates.

 

Source: Jewelers Board of Trade

 

The U.S. jewelry industry has lost a net of 372 jewelry retail firms this year for the year-to-date period through September 2009, up 21 percent from the net loss of 308 at the end of the first nine months of 2008, as the graph below illustrates.

 

Source: Jewelers Board of Trade

 

A gross total of 507 retail jewelry firms have gone out of business this year, according to the Jewelers Board of Trade, up 14 percent from last year.

 

However, there has been an offset to jewelers who have closed: a number of new retail jewelry firms have opened. So far in 2009, 135 new retail jewelry firms have opened, about flat with the 137 that opened in the first nine months of 2008. The graph below summarizes year-to-date openings and closings for retail jewelry firms.  

 

Source: Jewelers Board of Trade

 

Vendor Claims Against Jewelers Down, but Value Up Notably

For the year-to-date period, vendors have placed 2,641 claims against retail jewelers with the Jewelers Board of Trade. This is down about 1 percent from the prior year. The graph below summarizes year-to-date average vendor claims.

 

Source: Jewelers Board of Trade

 

While the number of claims against retail jewelers is down, the average value of the claims continues to climb. The average claim for the year-to-date against jewelers is $8,651, up 11 percent from last year’s average for the first nine months. In September, the average claim was $8,365, up 28 percent from last year’s $6,515. Last year’s level of September claims was unusually low; in prior and subsequent months, the average claim was in the $7,000 to $8,000 range. The graph below compares the value of the average claim this year for the first nine months to the same period last year.

 

Source: Jewelers Board of Trade

 

Other Statistical Highlights

Here are some other statistics from the Jewelers Board of Trade census of the U.S. market.

 

Source: Jewelers Board of Trade

Based on the Jewelers Board of Trade census, IDEX Online Research estimates that there are about 26,000 jewelry doors in the U.S.