Tiffany & Co. has sold its Caribbean-oriented Little Switzerland division to NXP Corp., which operates retail stores under the names Jewels and Azura by Jewels in the Caribbean. The company did not disclose the sale price but admitted it came at a loss, which would affect its financial results.
Credit Suisse analyst Paul Lejuez called the sale “an incremental positive,” estimating that Tiffany bought Little Switzerland for $37 million but sold it for between $5 and $10 million. He estimates Little Switzerland lost over $20 mil-lion in 2006.
As a result of a $23.58 million after-tax charge from the sale, the company’s net earnings in the second quarter of 2007 dropped 10 percent to $36.97 mil-lion. However, net earnings from continuing operations rose 41 percent to $63.21 million. Second-quarter net sales jumped 19 percent to $662.56 million, while global comparable store sales grew 13 percent.
Tiffany first became interested in Little Switzerland in 2001 when it bought 45 per-cent of the company. The following year it purchased the rest. But earlier this year it hired Evercore Group to explore strategic alternatives related to Little Switzerland.