So will Dick Blick and Jerrys Artarama go bankrupt? Both sell art supplies which are mostly imported. A good portion of their product comes from Europe and another good portion comes from Asia. The Trump Administration doesn’t really seem to like either Europe or Asia. And while Europe may do better tariff percentage wise, it’s still going to have tariffs raised on goods coming from there. And of course Asia is seemingly disliked the most by the Trump Administration (out of the major trade partners, Africa and the Middle East don’t count for much in their world) and is going to face major tariffs.
So what happens to companies whose main products are imported?
Their costs are going to skyrocket. Their ability to get products can be damaged. They’ll face the choice of eating the increased costs themselves or passing some or all of the costs on to the consumer. And with businesses that already struggle with profit margins like specialty retailers, they will most likely have to pass all of the cost on to the consumer.
Dick Blick is a large sized specialty retailer while Jerrys Artarama is a midsized specialty retailer. Both are privately held and do not report revenues, profits, or even total number of employees. We just have very general estimates and even those don’t feel trustworthy. But what we know is that art supplies is a mixture of high volume low margin products and low volume high margin products, almost all of which are traditional products of Europe or products of convenience from Asia.
Winsor & Newton is an English company that has its oil paints made in France with pigment from all over the world. Gamblin makes oil paints in the United States from pigment sourced from around the world. Blockx makes oil paints in Belgium from pigment sourced from around the world. Most paintbrushes are made in China or use Chinese components. A significant amount of paintbrush hair comes out of China. Canvases are made in India. Oil pastels are made in Japan and France. Acrylic paints are made all over the place from the United States to Japan. Do you see the problem?
The world of art supplies is absolutely global. That is its nature, that’s its history. Just like with perfume, France has a long tradition of producing art supplies. Its products are world renowned. And yet US consumers will face a tariff on products from France regardless of that fact. There’s no way the Trump Administration is going to make a tariff exception for art supplies. So that’s a problem.
And there’s another problem for Blick and Jerrys, if tariffs are implemented consumers are inevitably going to cut back on expenses. And there is no easier expense to cut back on than making art. Nobody NEEDS to make art. Nobody NEEDS to paint. It’s just something we all do that isn’t necessary but is nice. So that’s easy to cut. And it can be a very large expense. Art supplies are not cheap.
Jerrys Artarama and Dick Blick are under threat of going bankrupt. They are both highly sensitive to tariffs thanks to their global supply chains and do not have large margins, to my understanding. I also doubt they actually have much in the way of cash reserves. There’s no way for us to know because they’re both private companies but I imagine as specialty retailers they’ve just never felt they needed large cash reserves. I doubt it has crossed their minds.
So we have a loss of revenue and higher costs. That can be deadly for any business but more so for a specialty retailer like Jerrys and Blick. And yet I kind of imagine that neither Jerrys Artarama or Dick Blick will be the ones going bankrupt.
Instead I see smaller competitors being the ones going bankrupt and business from their customers helping to even out the consumer pullback that Dick Blick and Jerrys Artarama will face if the Trump Administration’s tariffs are implemented. I also think that Dick Blick and Jerrys Artarama could build a nice cash reserve if they started acting now instead of waiting until after tariffs eventually hit them.
So there’s some good things, like picking up new customers, and some very bad things like experiencing high costs and a consumer pullback. There’s a threat of bankruptcy. But I just doubt America is going to lose its preeminent art supplies retailers.
So the answer to whether or not Dick Blick and Jerrys Artarama are going to go bankrupt is… probably not!
I will say again that Dick Blick and Jerrys Artarama are both private companies that do not report their financial data. All statements are a matter of opinion. Only Dick Blick and Jerrys Artarama should be relied upon for factual data regarding their financial health.