December is the month when the nation’s 15,200 jewelry stores really shine! Indeed, winter holiday shoppers can make or break a jewelry store, which has highly seasonal sales in December and around Valentine’s Day and Mother’s Day. Yet in recent years, jewelry stores have lost market share to a variety of channels, including department stores, mass merchandisers, online sites, and catalog and TV retailers.

Despite the relatively high failure rate due to heavy competition, cyclicality, and commodity pricing, there are a lot of positive “facets” to this sector. Here’s a look at the retail jewelry industry to help you determine if it might be a niche you’d like to include in your small- to medium-sized business (SMB) portfolio.

The big-picture numbers

A typical retail jewelry store operates out of a single location, employs 7-8 workers, and generates over $2 million in annual revenue. These businesses sell fine jewelry (which generally contains some type of precious metal or gemstone), silverware, watches, and clocks. Companies may also create custom jewelry or provide repair services.

  • The jewelry retailing industry in the U.S. includes about 15,200 companies which operate 21,700 stores, employ over 120,000 workers and generate about $31 billion annually.
  • The jewelry industry is somewhat concentrated, as the 50 largest firms account for 41 percent of industry sales. Large companies include Sterling Jewelers (Zales, Kay Jewelers, Jared the Galleria of Jewelry), Fred Meyer Jewelers, and Helzberg Diamonds.
  • The business structure of jewelry stores is 42 percent corporations, 40 percent S-corporations, 11 percent individual proprietorships, and 6 percent partnerships.
  • Half of jewelry store firms are female-owned and 31 percent are minority-owned.
  • Of the 4,200 jewelry store firms that are veteran-owned, 25 percent have employees and the remainder are owner-operated.

Top trends within the jewelry store industry

Jewelry sales improve

Historically, jewelry stores have lost market share to other channels, but have begun to post sales gains. Jewelry store sales were flat in 2014 and 2015, but increased 3.8 percent in 2016, 4.5 percent in 2017 and 9 percent in 2018. As of August 2018, the industry reported 31 consecutive months of sales growth, ranging 4-15 percent compared to the same month a year earlier. Rising consumer wealth and spending are supporting the jewelry industry’s sales.


Large companies are attempting to differentiate their products by partnering with celebrities, designers, and other equities to create exclusive collections. Sterling Jewelers found success with a Jane Seymour-branded line. JCPenney has formed a partnership with Modern Bride to produce bridal jewelry. QVC has introduced celebrity costume and fine jewelry lines, and collaborated with the Smithsonian Institute to produce replicas of famous pieces. Association with an exclusive personality or brand can give a retailer a competitive edge and help drive store traffic.

Online sales

Online jewelry sales have been growing, and some Internet-based jewelry retailers, such as Blue Nile and Amazon, have enjoyed above average growth during the industry’s recovery. Without brick and mortar stores to build and maintain, online jewelry retailers have significant cost advantages and can offer lower prices. Some jewelry stores have embraced the Internet and offer a “virtual inventory” through special agreements with suppliers. Others have been slow to adapt and continue to rely on a distinctive, personalized in-store experience to generate sales.

Marriage trends affect jewelry sales

Because the bridal jewelry market can account for as much as half of a jewelry retailers’ revenue, marriage trends can have a significant effect on industry sales. The average age for first marriage has increased, and couples are typically more affluent and able to afford more expensive bridal jewelry. However, the marriage rate is declining – a factor that can depress growth in the diamond engagement ring market. Despite a stable divorce rate (about 42 percent), there remains a significant percentage of married couples who will reach milestone wedding anniversaries, which are associated with the gift of jewelry.

Gold prices decline

Gold prices affect jewelry costs and can lead stores to raise or lower prices. The price of gold hit a high of $1,900 an ounce in 2011 and a recent low of $1,050 in 2015. Higher gold demand in China and India and investor uncertainty has increased the global demand for gold, resulting in higher prices. While gold is sometimes purchased as an investment, as the U.S. and global economies strengthen, investors see less risk in other financial vehicles such as real estate and stocks, and demand for gold slows, which brings down prices and makes inventory less expensive for jewelry stores to purchase.

Risks to the retail jewelry industry to consider

  • The business exit rate for jewelry stores from the end of 2017 to the end of 2018 was 10.37%, higher than the average for all US businesses, according to data from Powerlytics.
  • Demand is highly dependent on economic conditions since most consumers consider jewelry to be a luxury item and make purchases with discretionary funds.
  • Commodity prices can be volatile, and are influenced by global supply and demand. The cost of goods for jewelry stores is highly dependent on the price of diamonds, gemstones, and precious metals (platinum, gold, silver).
  • Jewelry stores have lost market share to a variety of channels, including department stores, mass merchandisers, online sites (retailers, auction sites, and Internet shopping clubs), and catalog and TV retailers.
  • Preventing theft from both internal and external sources is a constant challenge for jewelry stores. Inventory is small (easy to conceal) and extremely valuable (lucrative to resell). Most companies employ strict inventory control and security systems to minimize the risk of crime.
  • Because revenue is seasonal, companies have difficulty compensating for weak sales during key selling periods. In addition, companies typically increase inventory and staffing to support increased store traffic, and incur incremental expense.

Want this kind of in-depth analysis on nearly 500 other industries?

All of the industry information in this post came directly from the Vertical IQ Industry Profile on Jewelry Stores. Reviewing this profile, or even doing a quick five-minute review of the industry’s Call Prep Sheet, gives you valuable insights into your retail jewelry prospect—their opportunities as well as the issues that may be keeping them up at night.

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