In 2015, according to the Jeweller’s Board of Trade, the US lost over 700 retail jewellery stores. The decline in our industry has been steady for over a decade. More than 30% of all retail jewellery doors have closed since 2000. This trend will continue with no end in sight.
The economy took its toll on the industry but in the recent recovery, stores continue to close even though the industry saw a slight increase in sales. Some are quick to blame online venues for stealing market share. Others will point to increased competition from technology products like tablets and phones. These are valid points and the effect on our industry is severe, but not fatal. Jewellers with a comprehensive bricks-and-clicks strategy and a strong social media presence can find ways to compete and keep their doors open.
The law of attrition
Many businesses have reached the end of their natural lifespan. Owners are retiring with no one to take over the business and keep it alive. Some of the largest and better known multi-generational stores, several over 100 years old, closed in the last few years. In most cases the businesses were still robust and profitable. But the next generation, some who grew up in their family’s store, are not interested in taking over the business.
Retail is hard work
We like to complain about the next generation being lazy, but that is not the case. They are just smarter than us. The hours in retail are long, especially for an owner. Your feet ache from standing all day. If you work at the bench, you’ll probably have pain in your neck and upper back and numb fingers. There is the hassle of managing employees and keeping the books. And of course, the constant worry and anxiety that comes with all of the responsibility.
It is brutal work and for what? Decreasing sales, shrinking margins and increasing expenses? Why should they bother when they can sell online? That is if they want to stay with jewellery. There are so many other options that could have them managing websites, blogging, or freelancing from a street cafe in Tibet. They aren’t lazy; they are geniuses!
Know when to fold ‘em
The most difficult things an owner must eventually face is the possible demise of business. It is necessary to take an objective look at the facts and realities; at some point, you will be unable to work the business. Have a frank discussion with your family about their interests in running the store. Let them know it is OK to want to do something else with their lives.
I know of one situation where the father could have retired long ago but is still showing up every day to provide a thriving business for his sons; who work with him out of respect but plan to sell or liquidate when he is gone. Had they communicated earlier, the father would be comfortably retired and the sons would be living the lives they want.
If you discover that you have no one to carry on after you, start planning an exit strategy now. Talk with your financial advisors and your family about your goals. Once you hit your financial targets, retire. Life is fleeting. It is never too early to retire, but it can be too late. Closing your business, especially while it is still on top, is not a failure; it is the reward for years of hard work.