The Jewelers Board of Trade (JBT) has released data indicating a significant decline in the number of active jewelry businesses in the United States during the second quarter of 2024. The report shows a 30% increase in business closures compared to the same period in 2023, reflecting ongoing challenges within the sector affecting retailers, wholesalers, and manufacturers.
Increased Business Closures
Between April 1 and June 30, 2024, 226 jewelry businesses closed, a notable rise from the previous year. Of these closures, 37 were due to mergers or takeovers, one was due to bankruptcy, and 188 ceased operations for other reasons. The total number of active jewelry companies in the US has decreased to 22,760, a 3.6% drop from the second quarter of 2023 and 205 fewer than the previous quarter.
New Business Formation Slows
The JBT report also noted a decline in new business formations within the jewelry sector. Only 83 new jewelry businesses were established in the second quarter, down from 116 in the same period last year. This slowdown in new ventures may indicate hesitancy among entrepreneurs to enter the market amidst economic uncertainties.
Sector-Specific Impacts
- Retailers: Retailers continue to dominate the industry, with 17,260 active businesses. However, this represents a 3.6% decrease year on year.
- Wholesalers: The wholesale segment saw a 3% decline, with the number of active companies dropping to 3,305.
- Manufacturers: The manufacturing sector experienced the most significant contraction, shrinking by 4% to 2,195 firms.
Credit Ratings Adjustments
The JBT, known for providing credit information to the trade, adjusted the credit ratings of numerous companies in the US and Canada during the quarter. Specifically, 633 businesses saw their credit ratings downgraded, a decrease from 873 downgrades in the previous year. Conversely, 663 companies had their credit ratings upgraded, compared to 823 upgrades from April to June 2023.
Implications for the Jewelry Industry
The data from the JBT underscores ongoing challenges within the US jewelry industry, highlighting the impact of economic pressures, changing consumer behaviors, and market consolidation. For professional jewellers, these trends suggest a more competitive environment with fewer players but also point to the necessity of adapting to the evolving market dynamics.
