New York“s most famous jewellery Tiffany & Co. has decided to discontiue selling jewellery and tabletop products in department and specialty stores starting 1 January 2000.
“US trade distribution, …
New York“s most famous jewellery Tiffany & Co. has decided to discontiue selling jewellery and tabletop products in department and specialty stores starting 1 January 2000. “US trade distribution, which began 14 years ago, represents less than 3% of Tiffany“s total sales and has only been marginally profitable,” said vice president and chairman James Quinn. “This decision also reflects our strategy to maximize control over the distribution of our products and our brand, as well as our focus on company-operated store development.” Quinn said Tiffany currently operates 37 stores in the US, and that the company believes it is better positioned to serve its customers through its growing network of retail stores and network marketing. “We expect no adverse impact on Tiffany“s earnings as a result of the decision.” The company reported that net earnings increased 70% in its second quarter ended 31 July 1999 to US$ 23 million. Net sales increased 24% from the year-ago period to US$ 307 million. According to Thomas Weisel Partners, a merchant bank, the wholesale division accounted for approximately 3%, or about US$ 30 million, of total company sales of US$ 1.16 billion in 1998. Tiffany entered the business in 1985 and currently sells to approximately 275 retailers. “We viewed this as a positive move for a number of reasons,” said Alan Rifkin, a partner at Thomas Weisel Partners. He said it will enable Tiffany to control its brand image and focus on its core business, which is its branch stores. After the announcement of Tiffany“s recent decision, Thomas Weisel Partners did not change its revenue or earnings estimates for the company, said Rifkin. “It continues to be one of our favourite picks.” In 1998, Tiffany tableware, which includes china, crystal and silver, accounted for 9% of total sales, or US$ 105 million.