Tiny Rhode Island Very Big in Costume Jewelry : but Imports Are Making an Inroad

Rhode Island produces 80% of the costume jewelry--or fashion jewelry, as the industry calls inexpensive to medium-priced adornments--made in America. Concentrated in Providence and its suburbs are 900 jewelry firms employing 24,400 workers with an annual payroll of $350 million.

Among the products turned out by Providence's factories are earrings, bracelets, necklaces, pins, pendants, rings, chains, cuff links and tie tacks.

"Jewelry is the largest manufacturing sector in Rhode Island," said Bill Parsons, assistant director of the state's Department of Economic Development. "We ship 1 million pounds of costume jewelry a week out of state. It is a $1.5-billion industry for Rhode Island." Rhode Island has been the heart and soul of costume jewelry for nearly two centuries. In 1794, Nehemlah Dodge--considered the father of the industry--developed a revolutionary process of plating base metal with gold in his small Providence shop.

A number of other companies quickly grew up around Dodge's factory, using the techniques that he pioneered. Today, the concentration of jewelry producers has expended to Massachusetts towns bordering Rhode Island--but nearly all are located within a 30-minute drive from Providence.

Most of Rhode Island's jewelry manufacturers continue to be small, family-owned and -operated businesses with 25 to 100 employees. But there are also many large, well-known companies such as Trifari, Monet, Jewel Co. of America, Kienhofer & Moog, Anson, Bulova, Gorham, Swank and Speidel.

Costume jewelry represents 40% of all jewelry made in America. The other 60% is more expensive jewelry of precious metals and stones, primarily produced in New York, New Jersey, California and Florida.

The 1980s have been booming for fashion jewelry. But the biggest beneficiaries haven't been U.S. manufacturers."At a time when fashion jewelry is selling like hot cakes, we're getting squeezed out by foreign imports," lamented Charles Rice, a spokesman for the 2,400-member Manufacturing Jewelers & Silversmiths of America, headquartered here.

Imports have made serious inroads in the last eight years. More than 8,000 jewelry employees have lost their jobs and 300 companies have folded since 1978.

According to the MJSA, U.S. sales of all types of jewelry increased 40% in the last four years, with the total value (manufacturers' price) increasing to $6.4 billion from $4.5 billion. The value of jewelry imports, however, increased 83% in the same period--to $1.9 billion from $1 billion.

American Ring Co. and Excell Mfg. Co. are examples of two family-owned firms that have successfully coped with the challenge from foreign imports.

Renato Calandrelli, 59, a native of Naples, Italy, came to this country when he was 18. He worked for minimum wages for a tool-and-die company until Jan. 21, 1973, when he decided that he would try to make it on his own by launching American Ring Co. in East Providence.

"That first year I was the company's sole employee. The company grossed $24,000 from the sale of 2,000 rings," Calandrelli recalled. Last year, he said, American Ring employed 180 workers and had gross sales in excess of $11 million.

"Competition from the Orient is fierce. It is a constant worry," Calandrelli admitted.

His company is a style setter. It produces 80,000 rings a week, most of which retail at $15 to $20. "Every three months we introduce new styles," he explained. "That is one way to beat them (imports). I spend between $200,000 and $300,000 a year on new ideas, developing new models.

"Foreign producers don't know what the American public wants. They have to follow us. We establish trends (that) they copy." Fred Kilguss, 75, chairman of the board of Excell Mfg. Co., one of the nation's largest jewelry chain companies, told how his firm took a different approach to counter the loss of business to Italian imports.

"The Italians came out with a new fashion chain that became popular overnight in the United States," Kilguss said. "We were not making that kind of chain. Our sales plummeted.

"We could have gone belly-up like several chain companies in Providence did, but we climbed on the bandwagon. The Italians not only manufacture chain but sell the machinery to make chains. We bought the Italian machinery." But despite that success, Kilguss said, "it's almost impossible for companies here to compete with the low end of the costume jewelry business. Items selling from less than $1 to $5 now are being made almost entirely in Taiwan, Hong Kong and Korea. But on more expensive items like our chains, which retail from $20 to $2,000, we can compete." Excell does not reveal gross sales, but Kilguss said his company employs twice as many workers as it did 10 years ago, and sales are 10 times what they were in 1976.