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Retail Jewelry Industry in the U.S. 2016
Industry Report - In this Special Report, we have brought you a report ‘Retail Jewelry Industry in the U.S. 2016’.
By: Diamond World News Service
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Apr 29 2016 6:28PM
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Reference: 12965  

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In this report, read about major retailer sales figures, diamond prices, U.S. retail jewellery sales figures, mergers, acquisitions and closures, online sales.

Author Credit: Nathan Munn
www.polygon.net

Sales growth at U.S. retail jewellery stores was sluggish in 2015.

EXECUTIVE SUMMARY

In 2016, the retail jewellery industry in the United States continued to adapt to falling diamond prices, high numbers of jewellery store closures, and an industry-wide liquidity crunch that, combined with rock bottom prices offered by online-only retailers and foreign suppliers, is putting downward pressure on gem and jewellery prices at every step of supply chain. At the retail level, more jewellery businesses in the United States ceased their operations in 2015 than in 2014, while major retailers continued to shutter stores and shrink their distribution networks. Online retail sales across all categories continued to grow at a healthy rate, while sales of jewellery at retail stores in the U.S. grew at the slowest pace since 2011. Several of the top U.S. retail jewellery brands reported increased sales and revenues in 2015, however most of these positive reports were calculated using a constant exchange rate; currency fluctuations actually resulted in net revenue losses for many jewellery brands.

U.S. RETAIL Jewellery SALES FIGURES

According to the most recently available figures from the Census Bureau, growth of retail jewellery store sales in the United States from 2011 to 2016 has been sluggish, particularly in the last three years. Total sales at U.S. retail jewellery stores reached $30.53 billion in 2015, only a slight increase from 2014 ($30.51 billion).

Many top retail jewelleers calculate revenues using a constant exchange rate.

Combined with an increasing number of jewellery store closures and business discontinuances, this leveling out of retail jewellery store sales indicates that closures of traditional retail jewellery stores will likely continue unabated for the foreseeable future.

MAJOR RETAILER SALES

Signet

Q4 same-store sales for Signet Jewelers stores grew by 4.9 per cent Y-O-Y, a marked improvement over the previous year’s growth. Kay Jewelersposted same-store sales growth of 7.2 per cent and total sales growth of 8.9 per cent for the holiday season, Y-O-Y. Jared stores reported modest samestore growth of 2.7 per cent for the holidays, and total sales growth for the season of 6.8 percent Y-O-Y.

Zale US Jewellery stores reported 6 per cent net sales growth for the holiday season, and growth of 5.6 per cent in same-store sales, while Zale’s Jewelers grew net sales by 7.6 per cent Y-O-Y during the holidays. Peoples Jewellers grew net holiday sales by 16.5 per cent Y-O-Y, while Mappins reported a jump of 25.4 per cent in total holiday sales Y-O-Y.

Both rough and polished diamond prices continued to fall in 2015.

DIAMOND PRICES

A December 2015 study by Bain & Company revealed that rough diamond prices have fallen by an astonishing 23 per cent since May 2014, while polished prices have fallen 12 per cent in the same period. In the diamond industry, manufacturers, wholesalers and retailers are all seeing their margins shrink as industry players unload inventory at what veteran jewellers say are unsustainable prices. Some say that the only reason sellers are pricing their goods so cheap is that they are chasing liquidity, sacrificing profitability in the process.

Why the mad drive to become liquid? Several industry analysts and executives say that a tightening of financing rules for jewellery businesses by major banks has led to an unprecedented absence of credit for jewellers. The closure of the Antwerp Diamond Bank – in what some speculate was a quick shutdown to avoid scrutiny of the bank’s financial practices – has also taken a major source of diamond business loans out of the market.

CLOSURES

Are retail jewelers being affected by these realities? It’s hard to tie the performance of the retail jewellery sector to the global diamond market, but data from the Jewellers Board of Trade seems to indicate the answer is yes.

276 jewellery businesses in the U.S. closed their doors permanently in the 3rd quarter of 2015, an increase of 25 per cent over the same period in 2014. These closures included 237 retail jewellers, 31 wholesalers and eight manufacturers.

Looking at the whole year, the numbers are equally dismal: 911 North American retail jewellery stores ceased operations in 2015, an increase of 12.5 per cent Y-O-Y. This shrinkage is balanced somewhat by the fact that the number of jewellery businesses entering the North American market for the first time rose by 10.2 per cent Y-O-Y in 2015 to reach 292; however, considering that a majority of new businesses of any kind fail within five years, this increase in the creation of new jewellery businesses doesn’t necessarily indicate a strong retail jewellery sector.

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