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Mom-and-Pop Stores Doing OK – for Now
Jul 22, 2020 9:14 AM
By Joshua Freedman
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RAPAPORT... Independent US jewelers have weathered the Covid-19 crisis well, but face a serious challenge if the pandemic persists, according to Jewelers of America (JA) CEO David Bonaparte.
“Mainstream mom-and-pop retail jewelers, especially the ones that are in a standalone location, aren’t doing that badly,” Bonaparte said Monday in an interview with Rapaport News. “And they’re starting to do business again due to pent-up demand now that we’re [not in] mandatory lockdown.”
Single-store businesses are the core of the US industry, accounting for around 90% of the trade organization’s membership. Those companies can endure the downturn much better than chains can, as they often own their store premises and are in strong cash positions, Bonaparte explained.
Moreover, the smaller, family retailers have benefited from continued demand for jewelry related to life-cycle events such as engagements, marriages and graduations, he added. The government’s Paycheck Protection Program, a stimulus package for small businesses, has also helped, he said. But mid-market, multi-store companies are struggling as many landlords still expect rental payments.
“The biggest challenges [are for] anybody operating in a mall,” Bonaparte said. “It’s extremely challenging, because some of the malls haven’t even opened yet.”
Better than 2008
JA has gained more than 300 new members since April after a successful promotion, Bonaparte reported. Meanwhile, only 56 US jewelry retailers closed during the second quarter, compared with 105 a year earlier, data from the Jewelers Board of Trade (JBT) showed. (That decline largely reflected the logistical difficulties in confirming that a company has shut permanently, according to the JBT.)
“I don’t think the industry is contracting as fast as people thought,” Bonaparte said. “It’s definitely not as fast as it was in the 2008 [financial crisis]. The financial markets are back pretty much to where they were [before the pandemic].”
Still, a second virus wave could have a heavier impact on mom-and-pops as their financial situations deteriorate, he cautioned.
“They’ve probably gone through some cash, and it would depend on whether or not the government puts in another stimulus package,” the executive said. “If it doesn’t, we could see some problems. If it does, perhaps they could weather it, but it’s a big question at this moment. Everybody’s watching this increase in Covid-19 cases…across the country very, very carefully.”
Main image: A jewelry store display. Inset: David Bonaparte. (Shutterstock, Jewelers of America)
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Tags:
COVID-19, David Bonaparte, independent jewelers, ja, jbt, jewelers, jewelers board of trade, Jewelers of America, Jewelry, Joshua Freedman, mom-and-pops, Paycheck Protection Program, PPP, Rapaport News, retail, stimulus
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