Jack Kellmer Co. has been a mainstay among area specialty jewelers for so long that many of its customers thought the business might be around for as long as the diamonds it sells.

But, it turns out, Kellmer's isn't forever.

After 72 years, the company that has served generations of families will close in the next few weeks when the last of its inventory is sold.

"They're an institution," said longtime customer Ellen Saft, whose family has shopped with Kellmer's for decades. "If it's buying something important to mark an occasion or something insignificant like changing a watch battery, I still think, 'Oh, my God, where am I going to go?' "

The company, which began on Sansom Street during the Great Depression, now has stores in Center City and Haverford.

It will be shuttered not because of the recession, but because the family's second generation wants to do something else, said Jim Kellmer, company president and chief executive officer and son of the late Jack Kellmer, founder of the business.

Jim Kellmer decided a year ago to close the business. "There are opportunities out there, and we want to take advantage of them and move on, explore other chapters in our lives," said Kellmer, 63, who runs the firm with his sister Diane Kellmer Young and his sons Dan and Jeffrey.

One of the most tempting opportunities has been selling the family's real estate. Kellmer stores occupy valuable property at 1521 Walnut St. in Philadelphia and at 569 W. Lancaster Ave. in Haverford. In Cherry Hill, the family owns property on Route 70, the site of a Kellmer store before it closed last year. The Walnut Street property has been sold to an investment group, and there are potential buyers for the other two, Jim Kellmer said.

Although he maintains that the economy had little to do with his decision to close, national jewelry sales are flat, and the industry is losing a wave of specialty jewelers, said Kenneth Gassman, president of the Jewelry Industry Research Institute, in Richmond, Va.

In a typical year, the industry loses 500 specialty jewelers, Gassman said. This year, it is on track to lose 1,000 of the 23,000 specialty jewelers in the United States.

"You've got jewelers saying, 'I'm tired of it. My kids don't want to be in the business. My supplier isn't giving me the kind of credit I need. My clients aren't getting the credit they need to buy jewelry,' " Gassman said. "And you've got competition from nontraditional jewelry retailers like Wal-Mart, and the Internet."

For family-run businesses, the challenge of keeping successive generations interested in and committed to running the operation is critical.

About 30 percent of family-owned businesses survive the second generation, said Barbara Spector, editor of Family Business magazine. The figure drops to 12 percent in the third generation and to only 3 percent after that.

Since its inception in 1936, Jack Kellmer Co. has been a family affair. Jack Kellmer founded the company after learning the business working for his uncle, a wholesale jeweler. Jack Kellmer, a law school graduate, opened the company when he could not find a job as a lawyer.

He started in 1936 on Jewelers' Row on Sansom Street. His brother William joined him in the business when it moved in 1945 to the 700 block of Chestnut Street.

The business eventually expanded to a retail operation and moved across Chestnut Street to a former bank building after a devastating fire. Over the years, the product line grew to include a thriving gift business. Stores opened in 1971 in Cherry Hill and in 1989 in Haverford. The Philadelphia store moved to Walnut Street four years ago. The firm has annual sales of about $10 million.

Kellmer's was the kind of family-owned business where everybody pitched in at times, including Jack Kellmer's wife, Doris (in the early days), his daughter Jane, before she died, and Kellmer cousins, aunts, uncles and grandchildren. Employees often worked there for decades, cultivating lasting relationships with generations of client families.

"When I saw the ad in the paper about the [closing], it really shook me up," said Jules Silverstein, 86, who worked for the company in advertising and management for 55 years. "We felt like we would stay there until we died. That's how we felt."

When Jim Kellmer and sister Diane Young think about what their father's reaction might have been to the closing, they say it would be multifaceted - pragmatic about the opportunity to sell the real estate, but sad that something he started had come to an end.

At least one Kellmer will stay in the business. Jeffrey Kellmer plans to open his own jewelry store near the family's current location in Haverford, his father said.

"It's just time," Jim Kellmer said of the changes. "Time for beginnings, and time for the end."

Contact staff writer Kristin E. Holmes at 610-313-8211 or kholmes@phillynews.com.