In a year marred by economic challenges, the Jewellers Board of Trade (JBT) has reported a significant 44% increase in closures among jewellery businesses in the United States during 2023. According to the JBT’s findings, 628 firms ceased operations, representing a notable uptick from the 436 closures recorded in the preceding year (2022). This trend signals a challenging landscape for the industry, with a variety of factors contributing to the increased discontinuation of operations.
The breakdown of closures reveals that four companies succumbed to bankruptcy, while 82 others were a result of mergers or takeovers. The majority, comprising 542 closures, occurred due to various other reasons, underlining the multifaceted challenges faced by businesses within the sector. Simultaneously, the industry experienced a decline in new establishments, with only 402 companies opening their doors in 2023, marking a significant 21% decrease from the previous year.
As of December 31, 2023, the total number of operational jewellery businesses stood at 23,140, reflecting a 2.7% decrease from the previous year. Within this landscape, the retail segment, the largest in the industry, contracted by 2.8%, leaving 17,554 companies in operation. The wholesale segment witnessed a 2.2% decline, with 3,352 firms, and the number of manufacturers decreased by 3% to 2,234, according to JBT, a key provider of credit and financial information to the trade.
The fourth quarter of 2023 proved particularly challenging, as new business openings plummeted by 28% year-on-year to a mere 78, while closures more than doubled to 144, compared to 59 in the same period the previous year. This sharp increase in closures during the quarter underscores the intensified difficulties faced by businesses in the latter part of the year.
In a parallel development, the JBT observed a notable shift in credit scores during the quarter. The credit scores of 595 companies across the United States and Canada were downgraded, reflecting a decrease from the 749 downgrades in the same period in 2022. Conversely, only 692 businesses experienced an increase in scores, down from 844 a year earlier. This nuanced insight into credit trends highlights the financial strain experienced by a considerable portion of the industry.
The increased closures, coupled with a decline in new establishments and challenging credit dynamics, underscore the complex landscape faced by jewellery businesses in the United States throughout 2023. As the industry grapples with evolving economic conditions, stakeholders will closely monitor developments in the coming year.
