Diamond jeweller’s profits sparkle
Tiffany & Co, which has struggled with online competition and lost its lustre with younger shoppers, has beaten expectations as shoppers in China snapped up its luxury goods.
The high-end jewellery company enjoyed a third-quarter profit of US$100.2 million (NZ$146.8m), up 5.3 per cent, off the back of a 2.8 per cent rise in revenue to US$976.2m.
Most of its strength came from the Asia-Pacific region, where sales surged 15 percent to US$283m.
The main driver was demand from China, although sales rose 5 per cent in Europe to $110 million.
In other places, Tiffany didn’t fare as well. In Japan, sales dropped 8 per cent and while it managed to squeeze out a 1 per cent sales increase in the Americas, that was considered a disappointment.
The company said that a downturn in spending by foreign tourists was part of the reason for the soft sales.
Under new chief executive Alessandro Bogliolo, Tiffany has been trying to lure millennials who are shopping elsewhere online.
The company said e-commerce sales increased at a slightly faster pace than overall sales growth.
The New York-based company has stepped up its marketing, using celebrities like Janelle Monae and Zoe Kravitz in advertising.
It’s also focusing more on design, and adding more lowerprice pieces such as US$95 bone china cups that look like paper cups.
Tiffany’s flagship Manhattan store on Fifth Avenue – playing off Audrey Hepburn’s classic 1961 film Breakfast at Tiffany’s – also recently opened a restaurant in the company’s signature blue.
Tiffany cited long lines for the cafe every day, and the upcoming block of reservations are full.
But the company still has a way to go.
‘‘For as much as Tiffany has made strides, it has not yet regained that full youthful vigour that so many of its peers exhibit,’’ said Neil Saunders, managing director at GlobalData Retail.