Wexler Jewelry, a third-generation family-owned Houston jeweler, will serve its last customer on New Year's Eve after operating 97 years in an industry currently fraught with stiffening online competition, rising rents and shrinking profit margins.

Store owner Dan Wexler said the time had come: "I knew I was going to disappoint some people, but I look forward to the transition to retirement."

Retail jewelry store sales in the U.S. from 2011 to 2016 have been sluggish, especially in the last three years, according to a report from Polygon, a gem and jewelry trade group. Total U.S. sales were $30.53 billion in 2015, compared with $30.51 billion in 2014.

Profit margins are shrinking as industry leaders try to match price points available through online retailers, and closures of traditional retail jewelry stores will likely become a norm in the next few years.

"The pie may have gotten bigger, but the slices have gotten smaller," said Wexler, who has seen the number of jewelry retailers, both physical and digital, grow over time at what he sees as an unsustainable rate.

Veteran jewelers and analysts note that retailers are often constrained by rising commercial real estate costs. Property taxes and land values have risen sharply, particularly in the Inner Loop, in the last 20 years, said Jason Baker, principal at Baker Katz. And it's harder to find a stand-alone location.

"You're not going to see any single-level retail development at any scale in the foreseeable future," he added.

This wasn't an issue when Wexler's grandfather opened the shop in downtown Houston in 1919.

He had immigrated from Poland and was headed for Austin, but he got on the wrong train and ended up here, Wexler said.

In the 1960s and 1970s, Wexler's father enjoyed a boom in independently owned jewelry stores. Now, it's rife with chains and big boxes.

Wexler's lease is coming due at River Oaks Plaza on Gray Street, where the shop moved 20 years ago. He said he was able to renew the lease, but at age 69, he said he felt it was time to retire. He doesn't have anyone in mind to run the business and mused that often the third generation is the limit for family-owned jewelers.

He's also watched as the industry's retail model has changed over the years. Customers have become more price-conscious, and more informed by looking up gem and diamond sourcing online.

They shop with a great deal of information, but also a lot of questions. Great customer service and offering recommendations on particular metals and stones have always been Wexler Jewelry's forte, and Wexler said it's the best way for a small jeweler to survive.

"You really have to find your little niche," he added.

To be sure, the era of family-owned jewelry stores hasn't ended yet. Jay Landa, owner of the 17-year-old J. Landa Jewelry in Rice Village, says independent jewelers like him need to go multichannel.

He prides himself on building up trust with his customers through his blogging and social media as well as his in-person recommendations. His store's smaller size also allows him to more easily update inventory according to trends and customers' preferences, something that's harder for big-box jewelry retailers.

At Tenenbaum Jewelers on Westheimer Road, co-owner Tony Bradfield strives to compete against online and big-box retailers by offering services such as repairs and custom work, and buying directly from individuals and estates rather than manufacturers, keeping price points competitive.

In the last few years, Tenenbaum's investment in knowledgeable staff and its willingness to try new retail models, including online sales, have paid off, Bradfield said. In the last year, it acquired three local jewelers and moved to its current location between Highland Village and the River Oaks District, which gives it more showcase space.

Wexler doesn't have much hope of growing his profit margins in the current retail environment. Yet he takes comfort in how long his family business stayed in the game and how loyal its customer base stayed.

As the day came to a close on Wednesday, a customer hugged Wexler and told him she would wear the earring she just bought from him to the closing day. She said on that last day, she would return to shop for her grandmother, a longtime client who was sad to see the store go.

Wexler bid her goodbye, wiping away tears.