Tiffany Twisted: Retailer Cutting Jobs After Weak Holiday

Comps fell 5 percent this holiday

Tiffany is slashing staff after holiday sales were hurt by the strong dollar and tough worldwide economic climate.

A statement said the retailer plans “staff and occupancy reductions,” without getting more specific. Its spokesperson did not return a request for comment at press time, but the company told CNNMoney the job cuts will impact a range of functions and take place this month. It also told The Wall Street Journal the occupancy reduction referred to a decline in space in the company’s corporate office, not in the number of stores.

The company’s comps for the November–December holiday period fell 5 percent, and worldwide net sales fell 6 percent to $961 million.

The decline included the United States, where the strong dollar led to lower spending by foreign tourists at its New York City flagship and elsewhere. Overall comps in the Americas fell 8 percent, and total sales dropped 5 percent.

The storied retailer’s statement didn’t have much detail about its holiday results, saying that “there were no noteworthy differences in performance among jewelry categories.” But president and CEO Frederic Cumenal did say in a statement he was “pleased with initial sales of our new fashion and fine jewelry designs, a solid increase in worldwide e-commerce sales, and our ability to maintain gross margin at normal levels.”

As a result of the bad news, Tiffany lowered its projected earnings forecast for fiscal 2015. It originally foresaw a 5 percent to 10 percent drop in earnings; now it projects that will come in at 10 percent. It added that “the strong dollar and global macro challenges will likely result in minimal growth in net sales and net earnings” for fiscal 2016.

At press time, its shares were trading at $64.67, about one-third less than the $96 they were trading at last summer.

JCK News Director