Tiffany has unveiled plans for a new 2000-foot store concept, tenatively titled “Tiffany and Co Collections.” The new stores will not feature engagement or “statement” jewelry, and will be aimed at the female self-purchase market. Below is one pic of the new proposed store. A pic of the interior can be seen here.
We spoke with Mark Aaron of Tiffany investor relations about the concept … He didn’t give us many new details, but he did note:
– The stores will feature price points from $100 to $15,000.
– They will feature the same products as in Tiffany stores, with the two exceptions (bridal and statement) noted above. “It is essentially a Tiffany store, offering a subset of our product offerings,” he said. “It is not a budget version of Tiffany or separate brand.”
– They will carry mostly gold, silver and platinum. Asked about diamonds, Aaron said there will be pieces with diamond accents.
– The stores will open in both areas where Tiffany has no presence and cities where it wants to supplement an existing presence. He gave university towns as an example of the former and Los Angeles as an example of the latter. (But just an example, he stressed.)
– There will likely not be different advertising, although obviously engagement-oriented ads are out.
– Asked if he was concerned about diluting the brand, Aaron said, “If there was, we just wouldn’t do it. We are talking about, maybe, in 15 years, having 170 stores in the U.S.”
Even so, this is big news. Tiffany currently has 68 stores in the United States. This plan calls for at least 70 more — nearly a doubling of the current size of its U.S. division (and it plans another 30 or so standard Tiffany’s.) All this will take over a decade – current plans call for opening three to five of the new stores a year, later increasing from eight to ten — but it does show some confidence that Tiffany is not testing the concept on a limited basis but is announcing a full-steam-ahead expansion plan.
Aaron notes that the stores will have greater productivity and profitablity than the standard Tiffany stores, especially given the absence of engagement rings. Which is a pretty sad commentary on what is going on with the diamond industry, that even Tiffany doesn’t consider diamond engagement rings a particularly profitable business.
In any case, there has been a lot of talk that this industry neglects the female self-purchaser. If Tiffany can’t attract that consumer, no one can. Good luck.
The AP reports on analyst reaction. So far, it’s favorable.