Tiffany & Co. said Friday that it has sold the building housing its London flagship store in Sloane Square for 73 million British pounds (approximately $149 million) and simultaneously entered into a 15-year lease with two 10-year renewal options.
Tiffany had acquired the building at 25 Old Bond St. and an adjoining building at 15 Albermarle St. in 2002 for $43 million. The acquisition was made in order to combine the buildings, renovate, and reconfigure the interior retail selling space. The work was completed in 2006, allowing the company to complete this sale and leaseback as planned.
Tiffany officials said the transaction results in a deferred, pretax gain of approximately $73 million, which will be amortized in selling, general, and administrative expenses over a 15-year period, and is not expected to have a significant effect on future earnings. The company said it plans to use the proceeds from the sale for general corporate purposes.
“Since opening our flagship store in London in 1986, Tiffany has developed a substantial and highly successful presence in London,” said Michael J. Kowalski, Tiffany chairman and chief executive officer. “Combining the Old Bond Street and Albermarle Street properties into a spacious new store has generated sales growth beyond our expectations, and we had always planned to pursue a sale-leaseback transaction following the completion of construction.”
The company currently operates five stores in London, with a sixth store opening in 2008.
Photo Credit: Stortford Interiors (UK) Ltd