Tiffany & Co. said Thursday it is selling its Caribbean retail subsidiary to a company who operates jewelry retail stores in the same region of the world.
The New York-based luxury jeweler said it will sell 100 percent of Little Switzerland Inc., to NXP Corp., which operates retail stores under the brands “Jewels” and “Azura by Jewels” in the Caribbean offering branded jewelry and watches.
The loss related to this transaction is expected to reduce Tiffany’s after-tax earnings in the second quarter ended July 31, by approximately $0.15 – $0.18 per diluted share. Tiffany said it expects to complete the transaction on or about Aug. 31.
Earlier this year, the Tiffany disclosed that it had hired Evercore Group L.L.C. to assist management in exploring various strategic alternatives related to Little Switzerland.
The Boca Raton, Fla.-based jewelry retailer operates about 25 mostly duty-free stores that sell jewelry, watches, crystal, china, and other gift items priced from $20 to more than $10,000. Its stores, located on 11 Caribbean islands and in Florida, appeal to tourists (mostly from the U.S.) looking to avoid the import taxes—particularly passengers on the cruise ship lines. The company was previously headquartered in St. Thomas, Virgin Islands.
Tiffany first bought a 45 percent stake in Little Switzerland in 2001 and the remaining stock a year later. Also in 2001, the two companies announced that Tiffany was building a boutique store adjacent to Little Switzerland in Bridgetown, Barbados. The following year they announced they were building two more Tiffany boutiques adjacent to Little Switzerland Store in St. Thomas and Aruba.
Tiffany expects to report its second quarter results on Aug. 30. At that time, the company said it will discuss the post-sale beneficial effect of this transaction on its future financial results.