2016, another tough year for B&M Jewelers

[Rockdiamond]

Here's a partial list of jewelry store closures from 2016......I used to call on at least 5 or 6 of them......anyone in your neck of the woods?



Donn Powers Jeweler, Milwaukee; V.V. Vick, Jewelers, Columbus, Ga.: Gaalaas Jewelers, Stillwater, Minn.; Wexler Jewelry, Houston; Maxwell Jewelers, Winston-Salem, N.C.; Schmidt’s Jewelry, Wisconsin Rapids, Wis.; Lindsey’s Jewelry, Harrisonville, Mo.; Lee Jewelers, Mayfield Heights, Ohio; Volkmann Diamonds, Kankakee, Ill.; John S. Price Jeweler, Frazer, Pa.; Stevens Jewelers, Glen Allen, Va.; Page-Parsons Jewelers, Grand Junction, Colo.; Waterbury Fine Jewelers, Watertown, N.Y.; Rogers Jewelers, Great Falls, Mont.; Martin’s Jewelers, Brandon, Fla.; Stephens Jewelers, Hot Springs, Ark.; Churchill Jewelers, Santa Barbara, Calif.; Beauchamp Jewelers, Albuquerque, N.M.; Fremeau Jewelers, Burlington, Vt.; Bachrach’s Jewelers, Richmond, Va.; Scoville Jewelers, Glens Falls, N.Y.; Jack Weinstein’s Tower of Jewels, Las Vegas; Robert’s Jewelers, Southhold, N.Y.; Alvin Magnon Jewelers, Tampa, Fla.; Sasha’s Jewelry, Indianapolis; The Jewel Box Jewelers, Campbell, Calif.; Gold Ray Jewelers, Hackensack, N.J.; Zerbe Jewelers, Colorado Springs, Colo.; Everson’s Jewelry, Coeur d’Alene, Idaho; Kimpel’s Jewelry, Columbiana, Ohio; Gems by Chao, Houston; Deister & Butler, Elmira, N.Y.; Bagley & Co., Duluth, Minn.; Wick & Greene Jewelers, Asheville, N.C.; Buschemeyer’s Jewelers, Louisville, Ky.; Supreme Jewelers, Hyde Park, lll.; Van Sweden Jewelers, Kalamazoo, Mich.; Stanley Jewelers Gemologist, North Little Rock, Ark. (pictured); Thalheimers Jewelers, Naples, Fla.; Rinaldi Jewelry, Solon, Ohio; Steve Hydock Jewelers, Kingston, Pa.; Washington Jewelers, Washington, N.C.; Shrode Jewelers, Sarasota, Fla.; Cameo Shop, Norton, Mass.; Charlotte’s Jewelry, Montgomery, Ala.; Stanley Jewelry, Emporia, Kan.; Dorfman Jewelers, Boston; Signatures Fine Jewelry, Wichita, Kan.; Baucom-Phillips Jewelers, Kannapolis, N.C.; Bentley’s Fine Jewelry and Repair, Scottsbluff, Neb.; Michael C. Fina, New York City; Mills Jewelry, Bowling Green, Ohio; Marilyn’s, Burlingon, Vt.; McWhorter Jewelers, Ramona, Calif.; Butler Truax Jewelers, Selma, Ala.; Ryan’s Jewelry, Sault Ste. Marie, Mich.; Diamonds on the Avenue, Davenport, Iowa; Levinson Jewelers, Fort Lauderdale, Fla.; Forney’s Jewelers, Dover, Del.; Stout Family Jewelers, Kinston, N.C.; Oletowne Jewelers, Pottstown, Pa.; Connor Jewelry Store, Shelbyville, Ind.; Readers Fine Jewelers, Santa Monica, Calif.; Weber Jewelers, Dayton, Ohio; Weinzierl Jewelry, Waconia, Minn.; JJ Jax, Cookeville, Tenn.; Showroom of Elegance, Canton, Mich.; McCarley’s Jewelry, Longview, Texas; Stuart’s Jewelers, Lubbock, Texas; Altier Jewelers, Scranton, Pa.; Krumrich’s Jewelers, Waukesha, Wis.; Jewels by James, Tulsa, Okla.; Douglas Jewelry Design, Bend, Ore.

 

[tyty333]

Do you think it's mostly because of on-line sales or diamond/jewelry sales are down all around?

 

[retrogamer]

I'd suspect from the decrease in jewelry sales as to the cause of closures.

 

[denverappraiser]

In 2009, at the start of the ‘great recession’, lots of jewelers went out of business. Some of that was competition from internet dealers, some was just that jewelry is a discretionary product and the whole market shrank, but who went under were the weakest players. This is different. Who we’re seeing closing now are the stores that survived all of that. Some of these stores have been in business for 100 years. That's two world wars and a great depression ago. Now the problem is succession planning. Jewelers are getting older and their kids, who grew up watching their parents work the long hours and shoulder the stresses and the risks, don’t want the job. They don’t want to BE a jeweler, even if there's a profit in it. Selling to someone else has the same problem. Lots of people would like to own a successful jewelry store, but not so many want the job of a jewelry store owner. It’s not that a store is impossible to sell or even give away, but it’s close. The answer is to just sell the inventory, close the doors, and go golfing. None of us are getting any younger and, if they can afford a comfortable retirement, why not take it? If not now -- when?

 

[baby monster]

I've been to Michael C. Fina on 5ave once. Left without purchasing anything. Overpriced jewelry and uninformed sales people.

 

[Rockdiamond]

I think it's a whole lot of factors.
People are still buying a lot of jewelry- although this sector may not currently be in a growth phase.
More efficiency in the supply chin is responsible for a large percentage of it IMO.
tyty- without a doubt, you, and many others like you, have influenced the English speaking diamond market. Yes, the internet- and IMO this forum and it's main players- like you-- have made a mark. Consumers advising other consumers has made people feel more comfortable to buy online.
The big internet players offer diamonds at very low margins. Diamonds were a critical aspect of profitability for many high volume jewelry stores. They can't compete with online pricing without changing the business model.
That right there is a biggie.
Then there's the cost of retail space, and how that's distributed.
We have too much square footage devoted to shopping- malls are trending down- but still cost a lot to rent in. Downtown spaces in hot areas are made very costly when banks and CVS moves in.



To Neil's point- I think there's surely some young'uns not looking to follow in the footsteps of dad who works 6 days a week....
On the other hand, if it was a profitable endevour, that would not be so prevalent. In "the good old days" being a retail jeweler was a very nice profession. Nowadays it seems like a tooth and nail fight all too often.
I consider myself very lucky to be here. I would never be able to have a viable company today if I hadn't accidentally made some crucial correct decisions 18 years back. The business really has gotten more difficult for many dealers and cutters that used to be quite successful.

 

[whitewave]

Direct to consumer Etsy people and the millenials not seeing diamonds as a requirement for engagement, Several I know have chosen gems instead, or just a wedding band

 

[LLJsmom]

Why do most B&am jewelers not get competitive? Learn what an ASET is. Get better cut diamonds and show potential customers why their product is worth buying. Look at GOG. If they didn't sell AVR OR AVC, I would still consider them a contender for other stones. I am so turned off every time I go into a B&M store and I feel like I know more than the salesperson. That's sad cause overall, I know so very little. And then they don't even care that I do. It's crazy cause they are supposed to be selling expensive items and you would think the store would require their employees to have a certain level of knowledge. Ugh. It's hard for me to feel sorry for these B&M stores if they can't atay competitive. And if they don't even care to and want to go golfing, by all means...

 

[bmfang]

Down here in my part of Australia, our B&M retailers are separated out into similar cases as y'all over in the States. The first are those where the sales people are just that, sales and they don't know much about the product they are selling. They tend to fall into the chain stores. Every now and again, there is some good quality product there and like a needle in the proverbial haystack, there is at times one salesperson who actually knows about the products they are selling (I'm a diamond and watch geek, so to find one of those at a chain store is a rarity for me and a joy to have a discussion with them). I still remember walking into one big chain to have a sticky-beak and asked some questions about a horrible looking 1ct J/I1 graded by GSI and two salespeople insisted that a GSI grading was the same as a GIA grading (if not better than GIA) and that an I1 stone was perfect and great value for the slightly discounted price of AUD$8599. Erm... no.

And then there are the small independent jewellers who have either a single store or two to three stores in the local area who still manage to survive the onslaught of advertising that the chains put out there and survive with good customer service, quality product, and staff who actually know the products that they are selling (and who have had training either from GIA or the Australian equivalent, the GAA). I've purchased from some of them in 2016 and their inventory is far better (negotiation on price is also better too but then again, they price their goods much better than the chains do). Thankfully here in the CBD where I work, those independents are still going strong and they do have walk-in business. None in my Aussie capital city as far as I know have shut down in 2016 (and I hope they don't!).

But as much as I want to support these local independent jewellers, their pricing structure is still far more expensive compared to what I can find online. And their inventory levels aren't that deep (for obvious reasons). For me to get a stone that is as well cut as the one I purchased recently from BGD and get it set locally, I'd be going at least AUD$1k higher based on some limited discussions I've had with the independents (who have questioned my personal specifications). So even with paying the GST upon import, I will still be better off financially (until the AUD-USD exchange rate tanks). That plus at local B&Ms, I have ended up being gently pushed to higher colour and clarity stones that they have in their inventory, usually pre-set too, (with the attendant price jump as well).

 

[WinkHPD]

Why do most B&am jewelers not get competitive? Learn what an ASET is. Get better cut diamonds and show potential customers why their product is worth buying. Look at GOG. If they didn't sell AVR OR AVC, I would still consider them a contender for other stones. I am so turned off every time I go into a B&M store and I feel like I know more than the salesperson. That's sad cause overall, I know so very little. And then they don't even care that I do. It's crazy cause they are supposed to be selling expensive items and you would think the store would require their employees to have a certain level of knowledge. Ugh. It's hard for me to feel sorry for these B&M stores if they can't atay competitive. And if they don't even care to and want to go golfing, by all means...

LLJsmom,

I hate to say it, but you are so right. You, and most of the regulars here, know so much more than most jewelers about diamond cut especially. The chain stores do not want their sale clerks to know much, because if they did, they could not possibly sell the junk that they are showing. The klieg lights make even poorly cut junk look great, until they leave the store, and that is just fine with the Zales and Jarrod's of the world.

The good stores often have huge problems getting qualified people to work for them, and once they have been properly trained it is hard to keep them. This may have been okay before the extreme education available for only a few hours of looking on the net, but it just makes life harder and harder for the jewelers of today. While the percentage of people buying on the net is still very low compared to the percentage buying in the B&M stores, the percentage of people getting educated on the net is now HUGE!

There will be those who do what it takes to learn and survive, and there will be many who will not make the effort. For many years, I was the only jeweler in Idaho who even owned an ASET, let alone knew how to use it. How sad is that? One of the best and easiest to use sales tools ever created to make a jeweler's in house sales and education easier for his clients, and no one could be bothered to get it. Insane!

Now, I know of at least one other jeweler in Idaho who has one and several well trained employees in her store who knows how to use it. For me, I can not imagine not having one in a B&M store, but hey, I hang out on Pricescope, where it is mandatory.

As a gemologist, I am proud to say that you, and many others here, keep me on my toes and force me and all of the jewelers who would do business with Pricescopers to keep learning if we want to keep earning.

Wink

 

[Snowdrop13]

Why do most B&am jewelers not get competitive? Learn what an ASET is. Get better cut diamonds and show potential customers why their product is worth buying. Look at GOG. If they didn't sell AVR OR AVC, I would still consider them a contender for other stones. I am so turned off every time I go into a B&M store and I feel like I know more than the salesperson. That's sad cause overall, I know so very little. And then they don't even care that I do. It's crazy cause they are supposed to be selling expensive items and you would think the store would require their employees to have a certain level of knowledge. Ugh. It's hard for me to feel sorry for these B&M stores if they can't atay competitive. And if they don't even care to and want to go golfing, by all means...

This is so true! In my neck of the woods the "high end" family jewellers are now selling GIA graded stones (finally) but they are not all excellent cut and there are certainly no ASETs, it's almost as if they feel just having a certificate will be enough satisfy the customer. Prices are still very, very high and lots of their ready made pieces have no info on diamond cut. They still emphasise high colour and clarity as being the most important thing above all.

And don't get me started on the second hand/antique retailers- I recently saw a beautiful pair of diamond earrings online (I guess at least this B and M had an internet offering). Approximate carat weights, vague mention of colour/clarity, no idea of cut type, no mention of condition, terrible return policy. How can I work out if the price is fair, or not? This is why I buy from the likes of JbG, everything is properly appraised so I know what I'm buying with my hard earned cash! (Sorry, mini rant over).

 

[soxfan]

Why do most B&am jewelers not get competitive? Learn what an ASET is. Get better cut diamonds and show potential customers why their product is worth buying. Look at GOG. If they didn't sell AVR OR AVC, I would still consider them a contender for other stones. I am so turned off every time I go into a B&M store and I feel like I know more than the salesperson. That's sad cause overall, I know so very little. And then they don't even care that I do. It's crazy cause they are supposed to be selling expensive items and you would think the store would require their employees to have a certain level of knowledge. Ugh. It's hard for me to feel sorry for these B&M stores if they can't atay competitive. And if they don't even care to and want to go golfing, by all means...

Bingo. I avoid B&M at ALL costs. It's exhausting.

 

[oldminer]

From just your partial list, I count 11 stores we used to supply as wholesalers. Many of them were really nice, high end, full services stores. Egos and stubbornness often serve like blinders on a horse which prevent seeing what is coming at us except from dead ahead. Sticking to your game plan in spite of obvious changes in the game rules has had dire results. In many ways, it is both necessary and good to see the herd thinned out. Suppliers cannot rely on nearly defunct firms to pay their bills. It is best in the end that the strongest and best managed survive and adapt.

Highly creative firms, the ones with fresh and correct understanding of the new structure of retail will have a better chance without some of these firms to "go out of business" every month. This is a part of the business cycle which is painful to those who did not see the changes coming. I saw these changes evolving in the mid 1990's and began a vast strategic change in my operations. To me, the change was clearly evident, but many really fine family firms, many with lots of long time employees, plowed ahead hoping for something to happen which was never in the cards.

 

[WillyDiamond]

I think Neil has a good point, children of the long time parent-jewelers do not want to go into the business.
I have noticed lots of jewelry stores closing their doors in my area.

I am a watch enthusiast, I window shop at Tourneau, but don't buy from them, overpriced, I buy from reputable sellers on the watch forums. I think the internet sales of diamonds has hurt the B & M stores terribly. Their sales people are terribly informed and I hardly ever see the same people twice, big turnover.

As far as jewelers who sell high end watches, Rolex over the past few years has cancelled selling agreements with many jewelers, even ones that have been selling Rolex for over 25 years. It seems Rolex wants to have a display or corner of a store and if the owner is not willing to segregate a part of his store, Rolex will yank the selling agreement.

 

[whitewave]

My kids don't want to go into my husband's profession (I was a high school teacher and I quit before the internet and cell phones got going).

Yes. Color and clarity. That is all you are going to get here. Probably not gia graded and certainly no ASET. The business model is outdated and probably only the ones who are willing to keep up (and thank you to those who do!) will be the ones to survive.

As others mentioned, consumers are much better educated from when DH and I walked in and bought an engagement ring based only on price and size, but many jewelers are selling based on that same thing: price and size.

I will never purchase that way again. The guy who started Blue Nile did so because he was angry about all of it and saw a better, more straightforward way. I wish B&M would redo how they sell diamonds, but probably they are like old doctors: too close to retirement to invest time and money into everything change requires.

Plus, you know the 3 generations rule: first generation starts the company. Second generation maintains and runs the company. Third generation runs it into the ground. I wonder how many companies listed above are in third generations.

 

[Paul-Antwerp]

David's list comes from an article on JCK, and that article also gives further background:

- One thing mentioned is what Neil brought up. Most closures of 2016 are related to no-succession. One can argue about the underlying cause.
- Another important aspect mentioned is the over-supply of retail-space in the US. Per person (inhabitant), the US has 50% more retail-space than Canada and double that of Australia, and these two countries are number 2 and 3 on the worldwide-list. Partially thus, this wave of closures is also a correction to normality.

Nevertheless, jewelry remains a sector where there are far more independent retailers than in any other type of product. And regardless of the Internet and potential online-sales, jewelry will continue to lend itself to brick-and-mortar shopping. Yes, I do believe also because of the two factors mentioned above, that many more independent jewelers will close their business in the next years, but other independent jewelers will pick up most of their business and grow. Especially those adapting best will thrive.

On a personal level, I have seen stores best adapting to our product increasing their sales approximately 30% during 2016.

Live long,

 

[Rockdiamond]

Like David, I also counted a bunch on that list I used to call on when I sold diamonds wholesale.
The aspect of succession is greatly impacted by profitability and ease of business IMO

As someone who's spent a lot of time on both sides of this issue, I see this from a unique perspective.
I understand the perspective of a tradesperson who is "old school" running head on into some newer technologies that are a challenge to the traditional way of grading and selling diamonds. I don't agree with how many have handled these changes- but I understand it.

When confronted with BN, JA or a large internet diamond site, many old school sellers scoff and insult the internet.
How many have a computer terminal on hand to shop with their potential client?

Maybe if the business had been richer over that past 10 years, the younger generation might have been more interested, and had a better handle on how to properly sell against the internet.

Paul- the 30% number you mention...is that specifically your product, or a 30% overall increase?
I could see the increase in your specific product- which is perfectly suited to the "new diamond world"....but even strong retail sellers had an overall weaker '16 as compared to '15

 

[Texas Leaguer]

It is sad to see so many going out, but this is a continuation of a trend that has been going on for many years. Yes, the recession absolutely primed the pump. And the other reasons mentioned here are contributing.

With regard to succession, the character of the retail jewelry business traditionally has been small independents. Family businesses mostly. They were built around local communities and were relationship based, depending heavily on the specific individuals who built and ran the businesses for their success and continued viability. Not many built their businesses to be organizational or institutional style operations. Therefore, without the principals they had limited re-sale value. There was staying power if the heirs were interested and capable, but without them the businesses would generally just be liquidated and go out. Hard economic conditions just hastened the inevitable.

Too, these businesses tended to be more old school and have been quite slow to modernize. The landscape has changed so much just in the last few years. Consumers have vastly different shopping habits today. Failure to adapt and adapt quickly is a death sentence to any business in the modern era.

On the bright side, the closings are providing opportunity for businesses with the skills and determination to evolve. There will always be a place for good local jewelers who know how to add value.

 

[Karl_K]

Lack of succession has been putting jewelry stores out of business here for over 15 years.
Many of my favorites when I started at PS are gone for that very reason.
There have been some new ones opening in the same time frame.
One extended family has a bunch of them.

 

[flyingpig]

One suggestion to the industry.

This industry needs something that excites consumers.
Every year I look forward to Baselworld, car shows, CES, Blizzcon, home and design shows, wine festivals, dining events, etc...
I cannot think of any jewelry/gem show that worths mentioning.

Also, they are many youtubers who showcase they watch and handbag collections. For jewelry?? I cannot think of a single youtuber..

 

[bmfang]

One suggestion to the industry.

This industry needs something that excites consumers.
Every year I look forward to Baselworld, car shows, CES, Blizzcon, home and design shows, wine festivals, dining events, etc...
I cannot think of any jewelry/gem show that worths mentioning.

Also, they are many youtubers who showcase they watch and handbag collections. For jewelry?? I cannot think of a single youtuber..

I happened to stumble across one Youtuber who has a jewellery vlog on it. However, it seems that the vast majority of her vids are essentially Tiffany or Hearts on Fire items. And she discusses nothing about the actual characteristics of the products except to say that they look good, so brilliant and sparkly, etc. Which tells people absolutely nothing of value. Apart from her having a very expensive habit which is probably kept fuelled by Youtube advertising revenue flowing back to her based on the number of views she gets.

 

[denverappraiser]

Retail is not dead or even dying. The biggest players are growing. Walmart. Costco. Jared. Home Shopping Channel. Macys. Tiffany. The big are getting bigger. The bottom is proliferating too. The number of individual artists selling through channels like etsy and craft fairs is exploding. Around here, the jewelry offerings at non-traditional jewelry stores, like hair salons and ski lodges, seems to be on the rise as well. What’s slipping away is the familiar specialty jewelry store where expertise is what’s being marketed.

I again suggest that succession planning is at the heart of it. Etsy jewelers rarely are trying to build a saleable empire. They make their stuff, they sell it, and when they’re done they shut off the account. It was never intended to be cross-generational or to be sold as a business. Meanwhile, one of the strengths of Macys is that they don’t really have an ‘owner’ at all. They’re a machine. Crossing this line is where the big payday for a merchant happens and it’s HARD. I can’t think of the last jeweler who succeeded in the style of Ben Bridge and Fred Meyer. Ben, for example, is long gone. Some of his kids and grandkids still work there but the whole thing is part of Berkshire Hathaway. It sort of looks like a family business from the outside, but it’s a corporate behemoth on the inside.

 

[Karl_K]

I again suggest that succession planning is at the heart of it.

I think its an issue for many small stores and businesses in a lot of sectors.
I know of 2 small shoe stores, a camera/AV store, and a used car lot that closed over the last few years due to it also.

 

[denverappraiser]

It’s definitely not just an issue for jewelers or just retailers. Jewelry is one of the few ‘mature’ industries that’s managed to resist the consolidation of business into fewer, larger, players. I’m not ready to throw in the towel for independent jewelers the way I’ve seen it go for travel agents and bookstores yet but Costco, Macys, Amazon et.al. do seem to have some distinct advantages.

I would not want to own a shoe store or a camera store these days.

 

[Rockdiamond]

I get a figurative slap in the face every morning. I park on W48th St in Manhattan.
IN the '70's there were at least 10 independent music stores there.
I was lucky enough to be hanging around when all kinds of stars happened to visit- which they did, from all over the world. On any day you could see the likes of Jimmy Hendrix, John Lennon, Eric Clapton, George Benson...it was paradise.
Today, ZERO music stores are left. Like a freakin' desert.
Most of the stores are actually vacant- I have heard they were bought by the company that owns Rockefeller Center- waiting to be built into yet another monstrosity skyscraper.

So let's add music stores into this equation.
A point could be made that this trend is part of the overall economic difficulties many people are facing. Instead of the wealth being spread around to many small retailers, behemoth corporations take all of that. The added efficiency means products cost less. Diamonds- especially those over 1ct cost consumers far less than they did 20 years ago- in many cases without even accounting for inflation.
It's clearly a double edge sword- we all pay less for things, but there's a cost to this reduction in margins......