ABOUT STULLER INC.
* Headquarters: Lafayette, La.
* Business: Maker of jewelry and jewelry-related products including bridal jewelry, mountings, diamonds, gemstones, metals, tools and supplies
* Employees: 1,500
* Founded: Stuller Chairman Matt Stuller created the company in 1970
* Quote: "We kept hoping to figure out a way to keep it going." -- Stuller CEO Jay Jackson on the closing of Chattanooga manufacturing facility
A company that makes gold and platinum wedding bands is shutting its Chattanooga plant and laying off about 40 workers as couples turn to cheaper metals as expressions of their love.
Stuller Inc. is closing its Bonny Oaks Drive facility at the end of June, prompted by the vast run-up in the price of the precious metals.
Jay Jackson, chief executive of the Lafayette, La.-based company, said that about 98 percent of men's bands were gold or platinum before prices skyrocketed in the middle of the last decade.
Now, that number is about 50 percent as people seek cheaper alternatives such as tungsten or stainless steel, he said.
"It has had a significant impact on the entire gold and platinum wedding band business," Jackson said. "We make a great product but it has gotten more and more difficult."
Chattanooga jewelers said they're seeing the same shift in the marketplace.
Bob Groves, a Wright Jewelers salesman, estimated that 90 percent of the bands it sells are alternatives to gold, including sterling silver, titanium and cobalt chrome -- which looks like white gold.
While a typical gold men's band may be in the range of $1,200, the others may start at $135, he said.
"It's substantially a lot less," said Groves.
He quipped that because women usually buy the men's ring, "she comes out good on the deal."
Jeremy Kennedy, store manager at Kennedy Jewelry, said there are people now asking not just for alternative metals but for wooden bands.
"It's a combination of pricing and consumer demand and taste," he said.
Kennedy said the age of the buyer also has a lot to do with what they buy as older clients still like gold and are willing to pay the difference.
"There are a lot of factors that come into play," he said.
Groves said there are downsides to buying alternate metal bands. He said that sterling silver can't be resized as a person grows older and the finger changes size. Also, Groves said, some alternative metals are so strong that the band is hard to cut off if a finger is injured.
Stuller is a manufacturer and distributor of jewelry and jewelry-related products at the wholesale level. Jackson said Stuller bought the E.B. Harvey Co. and its Bonny Oaks Industrial Park facility in 1996.
For about a decade the plant was successful as gold prices stayed in the $400 to $700 an ounce range, he said.
"We did an expansion at one point to provide more capacity," Jackson said.
But gold continued to climb, hitting a high of $1,889 in August 2011. While prices have retreated of late, including a big pullback earlier this month, they're still hovering just under $1,500 an ounce.
After attempts to maintain the viability of the Chattanooga site, Jackson said, plans are to merge its operations into Lafayette, where the company employs 1,250 workers.
"It was a very, very sad day when we made the announcement," he said.
Jackson said that from a purely financial perspective, the plant could have been shut down a couple of years ago.
"We kept hoping to figure out a way to keep it going," he said, adding the company is offering a severance package and placement services.
Plans are to put its building at Preservation Drive and Bonny Oaks up for sale.
Paul Parker, Hamilton County's real property manager, said Bonny Oaks Industrial Park is full and the high-profile site should sell without much of a problem.
"Generally, we haven't had issues with a lot of property sitting," he said. "That part has been very successful."
Since early March, at least three companies in the city have shed significant numbers of jobs.
Last week, Volkswagen said it planned to lay off about 500 people amid slowing sales of its Passat sedan.
In March, Alstom's turbomachinery plant, citing a lack of orders for nuclear power components, announced it's slashing its workforce by 80 jobs before year's end.
Contact Mike Pare at firstname.lastname@example.org or 423-757-6318.
Mike Pare, the deputy Business editor at the Chattanooga Times Free Press, has worked at the paper for 27 years. In addition to editing, Mike also writes Business stories and covers Volkswagen, economic development and manufacturing in Chattanooga and the surrounding area. In the past he also has covered higher education. Mike, a native of Fort Lauderdale, Fla., received a bachelor’s degree in communications from Florida Atlantic University. he worked at the Rome News-Tribune before ...