Tiffany’s Downturn Jolts Luxury Retailing

[DeepModem Mom]

Source: New York Times

By MICHAEL BARBARO
Published: January 11, 2008

Not even luxury products are immune. The upscale jeweler Tiffany & Company said Friday that the number of purchases at its American stores dropped during the holiday shopping season, a sign that a pullback in consumer spending that started at the low end of American retailing is percolating up to high-end merchants. The slowdown was unexpected and it sent jitters through the world of luxury-goods makers, who had seemed invulnerable over the last five years, even as energy prices surged and the housing market began to sputter.

The Tiffany results were among the clearest evidence yet that wealthy consumers — and middle-class shoppers who sometimes splurge on luxury items — are starting to tighten their purse strings.

Saks Fifth Avenue, Coach and Nordstrom have all warned of a slowdown in momentum over the holiday season. They are careful to emphasize that the truly rich are still shopping with abandon — Louis Vuitton merchandise, for instance, was a hit in December — but they concede that just about everybody else is starting to cut back. At Tiffany’s, for example, the most disappointing categories were not $50,000 engagement rings, but jewelry priced between $1,000 and $10,000, executives said....

Over all, Tiffany’s United States retail revenue rose 4 percent between Nov. 1 and Dec. 31, to $450 million, because the average amount spent by each Tiffany shopper rose compared with last year, offsetting the drop in the number of purchases.

But nearly all of that 4 percent growth can be traced to foreign consumers, who capitalized on the weak dollar to buy jewelry. Tiffany said that without foreign tourists, its domestic sales would have been unchanged from last year. The company likewise credited a 10 percent increase in sales at its flagship Fifth Avenue store in Manhattan to foreign shoppers....

Read more: http://www.nytimes.com/2008/01/11/business/11cnd-luxury.html?_r=1&oref=login

[brentspeak]

1. Tax cuts for the rich sure spurred on the economy, didn't they?

:sarcasm:

[Crazy Dave]

6. Just like the tax free subsidies for the oil companies help gas prices

:sarcasm:

[truthisfreedom]

2. Jeepers! What's next?

Beanie babies?

[gratuitous]

3. Cut your clientele to only the overrich

And suddenly you find yourself struggling to maintain even a high-end business. I know it's not fashionable for the likes of George W. Bush and his wealthy pals to worry overmuch about folks who less well off than them, but I have to tell you that they need us a hell of a lot more than we need them.

[angrycarpenter]

4. A lot of human suffering goes into diamond jewelery

So good.

[Manifestor_of_Light]

15. There are many gems prettier than diamonds.

And Tiffany's is not first caliber jewelry. I suppose Bulgari, Cartier, Harry Winston, Black Starr & Frost would be.

I have 2 GIA certificates - one in Diamond Grading and one in Colored Stone Grading.

Diamonds are way too expensive and there are much prettier stones out there.

[Joanne98]

5. Maybe the rich can't think of anything else they want.........

Which wouldn't be surprising after 30 years of stuffing their fat faces of everything they want!!!!!!!!!!!

[Warpy]

7. Tiffany's doesn't carry the cachet it once did

It's more like the Neiman Marcus of jewelry for the super rich.

The super wealthy buy cut stones and have artists design the settings. They certainly don't want anything they might see an executive's wife wearing.

[Fed_Up_Grammy]

9. Unbelievable,isn't it? I was just debating ordering

an $89.00 ring from QVC.

I didn't !!!!!!!

[Warpy]

11. I did get a ring online this year.

All the jewelry my mother left me was stolen in late October, so I treated myself to a birthstone ring this month.

I was a nurse too long, though, that garnet looks like a blood clot on my finger.

I can't win.

In any case, Tiffany's is high end white collar, not luxury trade, not any more.

[Fed_Up_Grammy]

12. Sorry about your mother's jewelry being stolen. Awful !

[redqueen]

8. HA HA!

Finally hitting the fat cats huh?

Bout frickin time.

[Benhurst]

10. My guess: The rich are still buying; but those in the middle class have stopped splurging.

[Demobrat]

14. I think that's it.

Now that the house is no longer appreciating 20%/yr.

[MasonJar]

13. What else is to be expected by a loser who has failed at everything he has

ever tried? Please tell me again how we and the world ever got into this mess. Why would anyone vote for an intellectually perverted and ability-deprived pseudo-neocon, who never had the gumption to do anything but drink and snort cocaine until we started to pay for all his useless and mindless actions, not the least of which have been countless trips of embarrassment to foreign lands and vacations at the pig farm. A rancher who is afraid of horses is a laughing stock; sign the great prevaricator up!!!!!!!!!!!!!

[daleo]

16. Noooooo! Not Tiffany's!!

The humanity!

[tanyev]

17. We're going to get scolded in the SOTU Address for not shopping enough.