Tiffany & Co. Reports Grim 2008 Numbers

by Deidre Woollard (RSS feed)
Mar 23rd 2009 at 10:02PM

The economic downturn continues to hammer Tiffany & Co. which released the company's sales figures for 2008. Worldwide total sales were down three percent (four percent on a constant-exchange-rate basis) and same-store sales were down nine percent on a constant-exchange-rate basis. But that's not the worst of it. The fourth quarter was disastrous, the fiscal fourth-quarter net income dropped 76 percent with total sales falling 20 percent. In the U.S. there was a 33 percent drop in same-store U.S. sales in the fourth quarter (34 percent in the fourth quarter at the flagship store in New York City).

The internet and catalog sales categories also took a hit, falling 10 percent for the total year and 20 percent in the last quarter alone. Around 600 Tiffany employees have taken an early retirement offer and together with other staff reductions and the upcoming closing of Tiffany's Iridesse pearl stores, the company will be losing around 10 percent of its staff worldwide.

Tiffany isn't predicting blue skies anytime soon. Tiffany Chairman and Chief Executive Officer Michael J. Kowalski says the company expects to experience "challenging economic conditions throughout the year," with a total sales decline of 11 percent.

Shares of Tiffany were up after the announcement because the company is seen to have done a good job at curtailing costs and because its lower quarterly profit beat Wall Street expectations. The company has also said it will not cut prices and will focus on marketing and on new products.

Tags: jewelry, tiffany

Filed under: Jewelry

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MidnightPlatinum Mar 24th 2009 5:22AM

Corporations can be stubborn, it can be a part of their corporate soul (see Jeffrey Lawrence's upcoming book--same guy who wrote "Reality Retail Management"). A key part of Tiffany's corporate soul is unbending pride. But in this economic environment, such is a poor character trait to feed into!

This is exactly *not* the time to launch new product, and it would be wiser to discreetly discount current product than release newer cheaper lines. Just the new marketing costs alone... :-S

Also, if you ask me, some of the newest Tiffany sterling items have been continuing a poor trend for the future of the brand image, especially if they really want to remain that unattainable. Bvlgari was stubborn like this too about discounting in an interview with their CEO just post-collapse. Seriously, they could launch an effort to offer fancy, personalized discount cards to previous customers or something to drum up short term business as they carefully diagnose their specific challenges.

-MidnightPlatinum from A Flawless Red Diamond
http://aflawlessreddiamond.blogspot.com/