Tiffany Plans Two New U.S. Stores, Hurt by Soft Silver Sales

Tiffany plans to open two new stores in the United States in the next year, executives announced in a conference call following the release of its latest financial results.

The stores will be in the Garden State Plaza in Paramus, N.J., and in Cleveland’s Eton Shopping Center. Another store is coming in Canada, in the West Edomonton Mall in Alberta.

The company opened four U.S. stores in 2012: one in Salt Lake City, two in California (San Francisco and La Jolla), and one in New York City. 

CEO Michael Kowalski said the company saw “pronounced softness” in the sterling silver category—generally considered a Tiffany mainstay—particularly in entry-level price points under $500.

“That is partly due to an ongoing brand strategy that is [focused] on the mid- to upper-level consumer,” said vice president of inventor relations Mark Aaron. “[It also] reflects the pressure on the economically sensitive silver jewelry purchaser.” 

Aaron also said the company had seen encouraging results with its yellow diamond collection, the new Tiffany Enchant diamond jewelry collection, and its relaunched 1837 collection with the RUBEDO metal.

Kowalski added that the retailer hopes to expand its non-jewelry offerings, including its leather assortment and bag and accessories collections. It also remains “absolutely committed” to developing its watch business, currently the subject of a legal action with Swatch. It will also refresh its website in the second half of the year.

Overall, the company’s worldwide net sales in the fourth quarter (ended Jan. 31) rose 4 percent to $1.2 billion, while net earnings rose 1 percent to $180 million. Company sales for fiscal year 2012 were far more mixed, with sales increasing 4 percent to $3.8 billion and earnings declining 5 percent to $416 million.

“Clearly, we were not pleased with Tiffany’s financial results in 2012, which are not representative of how our company should perform,” said Kowalski. 

The company’s comp store sales in the Americas fell 2 percent in both the fourth quarter and in fiscal 2012. Sales at its New York City flagship, which accounts for 8 percent of the company’s total sales, fell 3 percent in the fourth quarter and for the year.

JCK News Director