Breakfast at Tiffany & Co. has turned into a bountiful buffet, complete with the finest crystal and flatware, as well as more ubiquitous fare. Its specialty is fine jewelry, but the company also puts its name on silverware, timepieces, china, stationery, and other luxury items. Many products are packaged in the company's trademarked Tiffany Blue Box. To entice budget-minded Buffys to do more than window shop, Tiffany has broadened its merchandise mix to include key chains and other items that sell for much less than the typical Tiffany price tag. The company sells its goods exclusively through nearly 250 Tiffany & Co. stores and boutiques worldwide, its website, business-to-business accounts, and catalogs.
As would be expected, the company generates more than 90% of its sales from jewelry. By concentrating on sales of silver and gold items, which bring in 31% of revenue, Tiffany has weathered the economic downturn well. The company's more traditional fare, such as engagement jewelry and wedding bands, account for 29% of the retailer's business. As was the case with other companies that cater to the affluent, Tiffany has continued to sell its statement, fine, and solitaire jewelry even when times are tough.
Tiffany has been expanding its retail presence while working to maintain its high-street image. Its goal is to avoid over-proliferation of stores, however, or entering second-tier markets that could diminish its brand. About 90 stores are located in the US and the company plans to add a handful of new shops on its home turf. Tiffany, which is focused on diversifying its customer reach through other retail channels, markets its products through a Selections catalog, website, and iconic annual Blue Book catalog.
Despite a tough selling environment in recent years, Tiffany has seen steady sales increases and even a rebound. Net sales rose 18% in fiscal 2012 across the board and net earnings increased 19%. Overall, while the jewelry retailer lost its firm footing in the Americas at the onset of the downturn, Tiffany in 2012 surpassed pre-recession revenue figures thanks to a boost in sales in other regions, such as Asia/Pacific and Europe. Indeed, it's in these two regions where Tiffany has expanded, with 14 stores in Asia-Pacific in 2011 and 2012 and six in Europe during the same period. Signaling an effort to expedite its plans, Tiffany in 2011 hired former LVMH Moët Hennessy Louis Vuitton executive Frédéric Cumenal to lead the company's retail push in Asia-Pacific, Europe, Russia, the Middle East, and India.
While jewelry is the company's primary business, Tiffany works to extend its reach into other market niches. One such example is the company's exclusive deal with eyewear behemoth Luxottica to make and market Tiffany-branded ophthalmic and sun eyewear through 2016. To further broaden its accessories collections, the jeweler acquired luxury handbag and footwear brand Lambertson Truex from Samsonite. Other deals haven't gone as planned. In a bid to re-enter the watch business, Tiffany formed an alliance with The Swatch Group in 2007 to create a new company to make and distribute Tiffany-branded timepieces. The deal was inked through a noteworthy 20-year licensing agreement. The alliance ended, however, in 2011 with both sides making allegations of non-fulfillment of the agreement.
Tiffany sold its store in Tokyo's tony Ginza district to Goldman Sachs for about $318 million. The jeweler purchased the nine-story building for $140 million in 2003. Tiffany now leases the property (through 2032) from Goldman. – less