JBT Amends Credit Reports to Account for COVID-19

RAPAPORT… The Jewelers Board of Trade (JBT) will issue two parallel credit ratings for companies during the current crisis to reflect the impact of the shutdown on cash flow.

The organization’s credit reports, which score jewelers’ debt history, will include one rating using its usual methods, mirroring the realities of COVID-19, and a second showing the situation before the downturn.

The JBT offers its credit reports to paying members, including suppliers and banks seeking information on their customers. It held discussions with those members to help it decide how to adapt the reports to the unusual situation, its president, Erich Jacobs, explained in a statement Friday. Some wanted the system to stay the same, ensuring users could see companies’ true performance, while others called for it to freeze its scoring until the pandemic was over. It decided to offer both.

“We recognize that every jewelry firm has been adversely impacted by this crisis, and to give large numbers of firms a low rating because the economic supply chain is broken isn’t particularly helpful for either the rated company or the JBT member extending credit,” Jacobs explained. “What is needed is additional context.”

Image: Erich Jacobs. (JBT)