Jewelry Maker to Lay Off Workers

Two weeks after finalizing its acquisition of jewelry maker OroAmerica Inc., a Fort Lauderdale, Fla., company said Friday that it plans to lay off an unspecified number of workers at the firm’s Burbank factory.

The new company, Aurafin OroAmerica Inc., was formed last month when Aurafin acquired Burbank-based OroAmerica. Workers at the Burbank offices and factory were notified of the impending layoffs this week, said company Vice President Robert Whitaker.

The layoffs are due to work force duplications resulting from the merger, he said. He declined to say how many workers would be affected.

Privately held Aurafin acquired OroAmerica on June 21 in a $74-million purchase of OroAmerica stock at $14 a share. The deal joined two of the largest U.S.-based gold jewelry manufacturers.

Aurafin specialized in a line of fine gold jewelry sold at independent stores, and OroAmerica focused on less expensive, trendier jewelry sold at wholesale clubs, discount retail chains and department stores.

The new company has 1,500 employees worldwide and projected annual sales in excess of $325 million, according to a company statement. OroAmerica, which is now a division, had sales of $172 million last year.

Gold jewelry sales in the United States steadily rose over the last nine years, including a 6% bump last year, according to the World Gold Council, a trade group.

But the current economic slowdown has been hurting retail sales across the board. This week, for example, giant Federated Department Stores warned that its second-quarter earnings will fall short because of disappointing sales.

“We’re seeing a lot of jewelry suppliers who are cutting back” in manufacturing, said Kenneth Gassman, an independent jewelry industry analyst.

Jewelry sales are down 5% this year through May, compared with the same period last year, Gassman said. However, he said, that decline is mostly in “white” jewelry, such as diamonds and platinum, not in gold, where sales remain flat.

OroAmerica acquired a small Minneapolis-based gold jewelry business in 1998 and made an unsuccessful bid to buy Mount Vernon, N.Y.-based Michael Anthony Jewelers Inc., another top U.S. gold jewelry maker, in 1999.