Tough times, or is Tiffany out of touch?
The closest I’ve ever come to a signature Tiffany & Co. box was seeing it displayed alongside the crystal award it held, a Pulitzer Prize.
The box sat on a table near the podium in a local community college classroom as the award’s recipient talked about his career and winning one of journalism’s top prizes.
There’s no mistaking a Tiffany box: Its particular shade of robin egg blue is a trademarked color. And the package, usually tied with a white ribbon, always commands attention — and a bit of envy — for what may be inside.
Most often, it’s a piece of expensive jewelry from the high-end retailer, whose carefully nurtured brand has denoted elegance and taste since its founding in New York City in 1837.
But the company, with 274 stores worldwide today, stumbled over the holidays, reporting last week that November-December sales were below expectations and likely meant full-year results also would suffer. For stores open at least a year — a key measure of retail health — revenue was flat.
CEO Michael Kowalski said Tiffany still planned “for continued store expansion and new product introductions in 2013,” but management was eyeing sales growth “conservatively” because of “uncertainty about general economic conditions in all our major markets.” Observers who follow the company, though, pointed to better holiday results for other jewelry chains and opined that Tiffany may be out of step with consumers.
On CNBC, an anchor on one of the cable network’s business shows postulated that high-end jewelry may be in “structural decline” outside of Asia and the Middle East. “We live in Calvinist times; bling is not in,” he told an analyst in a segment on Tiffany’s sales report.
The analyst, Brian Nagel of Oppenheimer & Co., said he mostly agreed, but noted that jewelry also might be losing sales to other product categories.
“To a certain extent, some of the new products from Apple and other consumer electronics manufacturers squeeze out sales of Tiffany as that giftable item for the holidays,” he said.
The sentiment was echoed by Brian Sozzi, chief equities analyst at NBG Productions, in an interview with The Associated Press: “Even if the economy were to roar back, there are more items competing with Tiffany. People are looking for more items that have function.” On CNBC, Nagel also said he thought Tiffany was “suffering through a fashion miss” in its lower-end silver product line, which was not keeping up with the designs offered by other chains.
“If Tiffany can fix this fashion issue” — and Nagel said he thought the retailer could — “I think you’ll see the sales improve rather quickly.” The company recognizes “they need to do something … to pump life into that lower-end business,” he added.
Luxury retailers often seek to bring in “aspirational consumers” — everyday folks who might stretch a bit financially to get their hands on a coveted brand. That’s why Coach Inc. would pitch a $400 handbag as an “accessible” luxury or Rolls-Royce would offer a smartphone app that lets users customize a $400,000 car.
For Tiffany, it may mean adding more sterling silver bracelets and rings at $250 or less for the consumer who yearns for one of its white-ribboned boxes but can’t swing a pair of $8,000 white gold and diamond earrings.
Me, I’d rather aspire to a Tiffany’s box with an etched Pulitzer crystal inside.
Marlene Kennedy is a freelance columnist. Opinions expressed in her column are her own and not necessarily the newspaper’s. Reach her at firstname.lastname@example.org.