Tiffany Holiday Sales Up 4%, Comps Flat, at ‘Low-End Of Expectations’

Tiffany & Co. said Thursday that worldwide net sales increased 4 percent to $992 million for the November-December holiday period, while same store sales were unchanged from the prior year.

“Holiday period sales growth was at the low-end of our expectations, and we now expect that net earnings for the year ending January 31 will be at the lower-end of the forecast that we issued on November 29 of $3.20 – $3.40 per diluted share,” said Michael J. Kowalski, Tiffany chairman and CEO. “Due to uncertainty about general economic conditions in all our major markets, management is planning sales growth conservatively for 2013 and at this point expects net earnings growth of 6 percent – 9 percent.”

Net sales for the holiday period by region and category include:

Sales in the Americas region increased 3 percent to $516 million in the holiday period. On a constant-exchange-rate basis, total sales increased 2 percent, and same store sales declined 2 percent in the New York flagship store and in branch stores. Performance was relatively similar across much of the region. Internet and catalog sales rose 4 percent.

Sales in the Asia-Pacific region increased 13 percent to $187 million. On a constant-exchange-rate basis, total sales increased 11 percent (due to growth in Greater China and most other markets) and same store sales rose 7 percent.

In Japan, total sales declined 5 percent to $153 million. However, on a constant-exchange-rate basis, both total sales and comparable store sales rose 1 percent.

In Europe, sales increased 2 percent to $119 million due to mixed performances by country. On a constant-exchange-rate basis, total sales also increased 2 percent and same store sales were flat.

Other sales increased 114 percent to $17 million, largely reflecting the conversion in July of five Tiffany stores in the United Arab Emirates from independently-operated distribution to company-operated retail stores.

“Looking forward, we are formulating plans for continued store expansion and new product introductions in 2013,” Kowalski said.

Tiffany currently operates about 274 stores (115 in the Americas, 65 in Asia-Pacific, 55 in Japan, 34 in Europe and five in the U.A.E.), compared with 246 stores (102 in the Americas, 57 in Asia-Pacific, 55 in Japan and 32 in Europe) a year ago.

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Harry Winston Says Retail Sales Sparkle While Mining is Ahead of Plan

Robert Gannicott, Harry Winstion Chairman and CEO

Harry Winston Diamond Corp., in an interim trading update, said the first two months of the third quarter have seen the jewelry and watch sales continue to increase. Sales have been particularly strong in the U.S. and Japan. Chinese customers represent a growing share of the clientele in all sales regions. Strong advertising of new product lines, such as Midnight watches, bridal and designer jewelry, has delivered particularly strong increases while sales continue in high jewelry, Harry Winston's traditional business.

The Toronto-based company, which does business as a luxury retailer and a diamond miner, said it released its update in response to recent market volatility surrounding the Euro sovereign debt crisis.

The company said its mining business, which consists of 40 percent ownership of the Diavik Diamond Mine in northwest Canada, is modestly ahead of its production plan while joint venture cash calls have been below budget in Canadian dollars which, combined with the fall in the Canadian dollar against the company's reporting and sales currency of US dollars, gives an 11 percent reduction in joint venture operating costs for the first two months of the quarter against plan.

The company said it has approximately $ 112 million of rough diamond inventory at June sales prices (prices peaked at the July sale) and a further $75 million of capacity in its mining debt facility. The jewelry and watch business has its own credit facility secured by its inventory.

Having increased in price by around 25 percent over the past year up to the end of July, the polished round diamonds that form the core of its jewelry sales, and polished diamond inventory, have since declined in price by about 10 percent. The price changes are not uniform with some items, such as fancy shapes, not declining at all. Over the same periods rough diamond prices increased by around 50 percent, but are now correcting against polished prices.

The credit facilities essential to the diamond polishing industry are largely underwritten by European banks that are currently under stress with European sovereign debt issues, the company said. Credit hasn’t been withdrawn or reduced, but neither have they been increased against higher unit prices. The processing industry is now selling polished and reducing rough purchases to increase liquidity even as jewelry retail consumption continues at levels higher than last year.

“The credit crisis of 2008/9 was centered on consumer credit and the banks that were supporting it. This had a dramatic effect on the consumer. The current crisis is centered on sovereign debt and the largely European banks that are its holders, while consumer off-take remains resilient,” said Robert Gannicott, Harry Winstion Chairman and CEO.

“Although we continue to make small sales of specific rough diamond assortments to specialist clients, we have elected not to make broader rough diamond sales into an unstable market that seeks bargains. As a result, significant rough sales revenues from this period will be deferred into the fourth quarter, and possibly subsequent periods. This time of the year is traditionally quiet in the rough diamond market being the Jewish and Indian holiday periods. We expect a return to normality in November as demand increases in the lead-up to the Christmas, Indian wedding and Chinese New Year seasons.”

LVMH Watch and Jewelry Sales Up 29% in 2010

LVMH Moët Hennessy Louis Vuitton annual watches and jewelry sales grew by 29 percent in 2010 to 985 million euros ($1.34 billion) and profit from recurring operations doubled. Watch and jewelry brands gained market share across all regions.

For its 150th anniversary, TAG Heuer successfully launched a new watch movement and enhanced its presence in Asia, the company said. Hublot benefited from the growing success of the Big Bang and King Power collections, continued to increase its high-end offering and integrated its workshop of high-end watch making. Zenith found a new strong momentum with its new collections and the El Primero movement. The jewelry brands Chaumet, De Beers and Fred registered solid revenue growth in their European and Asian store networks.

Overall, the world’s leading luxury products group reported a 19 percent increase in revenue in 2010 to 20.3 billion euros ($27.67 billion), exceeding the 20 billion euro mark for the first time. All business groups saw excellent momentum in Europe, Asia and the United States. Louis Vuitton, in particular, once again recorded double-digit revenue growth during the year.

Revenue increased by 20 percent in the fourth quarter with organic growth rising 13 percent, the luxury group said February 4. Profit from recurring operations increased by 29 percent to 4.32 billion euros ($5.88 billion). The current operating margin improved by 1.6 percentage points to reach 21.3 percent in 2010 with all businesses contributing to this performance. Group share of net profit was 3.03 billion euros ($4.12 billion).

“2010 was a great vintage for LVMH,” said Bernard Arnault, LVMH chairman and CEO. “The quality of our products, the originality of our brands and the talent of our teams bolstered by the economic recovery allowed us once again to gain market share throughout the world. In 2011, LVMH intends to further strengthen its global leadership position in high quality products by relying on its sound long term strategy.”

Bulgari Sales Up 20%, Jewelry Sales Up 28%

Bulgari Group said Wednesday that fourth quarter 2010 sales increased 20.5 percent at current exchange rates to 357.8 million euro ($491.3 million) at current exchange rates (Sales increased 11.4% at comparable rates).

“The fourth quarter results certify a definitive recovery in all geographical areas and product categories,” the Italian luxury jewelry house said in a statement. “An excellent performance by jewelry was thus accompanied by highly positive accessory and perfume sales results, whilst with regard to watches the Serpenti, Bulgari Roth and Bulgari Genta collections, launched during the quarter, had an excellent start.”

Strong sales gains were reported in all regions, with the strongest growth in Asia.

By product category, jewelry sales grew by 28.3 percent to 166.7 million euro ($229 million) for the period, the company said. Excluding the significant but volatile contribution of the high jewelry segment, the category increased by 36 percent
.
Watch sales grew by 7 percent for the period to 73.5 million euro ($101 million), after three weak quarters. Its accessories business posted a 31.4 percent uptick and perfumes also did very well, with a 14.1 percent rise.

By region, the fourth quarter saw U.S. increase by 10.3 percent. Sales in Europe rose 8.4 percent and Middle East rose by 13.9 percent.

The company noted the “spectacular” sales gain in Asia at 37.7 percent, including the “progressively improved” performance in Japan, up 24.9 percent. Sales were up 47.3 percent in greater China. The remaining areas of Asia grew by 48 percent.

“These sales results are highly satisfactory overall, and represent a record fourth-quarter turnover in the history of the company, thus confirming the recovery we had already noted in the previous quarters, said Francesco Trapani, Bulgari Group CEO. “The performance of watches, in particular, demonstrates that with the expansion and the upgrading in our offer we are going in the right direction. In the core business of jewelry, the innovation and design of the Bulgari brand have achieved excellent performance levels both in the basic and high-end segments, in spite of the challenging comparison bases. Lastly, perfumes and accessories prove once again that the diversification strategy aimed at competing at the highest levels in the market is winning. In conclusion, these data are definitely a good starting point for the months to come, and induce me to a cautious optimism.”

Birks & Mayors Holiday Sales Up 8%

Thomas A. Andruskevich

Luxury retail jeweler Birks & Mayors Inc. said net sales during the fiscal 2011 holiday season (October 31, 2010, through December 25, 2010) increased by 8 percent to $75.5 million, compared to net sales of $69.7 million during last year’s holiday season.

The Montreal-based company, with stores in the U.S. and Canada said the $5.6 million increase in net sales was driven by an increase in comparable store sales, $1.9 million of higher sales related to translating the sales of the Company’s Canadian operations into U.S. dollars with a relatively stronger Canadian dollar, and $1.1 million of sales from two new stores, net of the closure of four stores.

Comparable store sales during the holiday season increased by 4 percent year-over-year, with comparable store sales in Canada increasing by 7 percent and U.S. comparable store sales growing by 2 percent. The stronger Canadian sales results reflect an increase in sales transactions primarily related to an increase in store traffic while the increase in the U.S. reflects a higher average sales transaction.

“We are pleased by the increase in sales in our Canadian market and are encouraged by the sales growth in the U.S., especially in December,” said Thomas A. Andruskevich, Birks & Mayors president and CEO. “As we enter our final fiscal quarter, we will continue to focus on generating increases in sales and gross profit while continuing to diligently control expenses, manage the level and productivity of our inventory and limit capital expenditures.”

Birks & Mayors operates 68 luxury jewelry stores in the U.S. and Canada. The company operates 33 stores under the Birks brand in most major markets in Canada and 29 stores under the Mayors brand in Florida and Georgia, two retail locations in Calgary and Vancouver under the Brinkhaus brand, one retail location in Orlando under the Rolex brand, and three temporary retail locations in Florida and Tennessee under the Jan Bell brand.

Tiffany Holiday Sales Up 11%

Tiffany & Co. said Tuesday that its worldwide net sales during the two-month holiday period ended December 31, 2010, rose 11 percent over the prior year to $888.5 million. On a constant-exchange-rate basis (which excludes the effect of translating foreign-currency-denominated sales into U.S. dollars) worldwide net sales increased 10 percent and comparable store sales rose 8 percent. All regions reported strong sales increases with double-digit sales growth in Asia and Europe.

Because of the higher-than-expected growth in sales during the holiday period, the management of the luxury jewelry company has increased its global sales outlook to $3.1 billion for the fiscal year ending January 31, 2011.

Net sales highlights by region:

* Sales in the Americas, which includes the U.S., Canada and Latin/South America, increased 9 percent to $484.8 million. On a constant-exchange-rate basis, sales rose 9 percent and comparable store sales increased 7 percent (comparable Americas' branch store sales rose 8 percent and sales in the New York flagship store increased 3 percent). Internet and catalog sales in the Americas increased 8 percent.

* Sales in Japan increased 11 percent to $142.5 million. On a constant-exchange-rate basis, total sales rose 3 percent and comparable store sales increased 2 percent.

* Sales in the Asia-Pacific region (which Tiffany reports separately from Japan) rose 23 percent to $138.9 million. On a constant-exchange-rate basis, sales increased 18 percent due to growth in most countries, and comparable store sales rose 15 percent.

* Sales in Europe increased 13 percent to $114.9 million. On a constant-exchange-rate basis, sales rose 21 percent due to growth in the U.K. and most of continental Europe, and comparable store sales increased 15 percent.

* Other sales declined 45 percent to $7.4 million. The company this came from an expected decrease in wholesale sales of rough diamonds (following higher-than-normal sales in the previous year), partly offset by increased wholesale sales of finished goods to independent distributors within emerging markets.

“We are very pleased with this worldwide sales growth, and with the increases we saw in every region in both months of the holiday period,” said Michael J. Kowalski, Tiffany chairman and CEO. Healthy sales growth was seen across most product categories, with particular strength in Tiffany's fine jewelry collections, diamond engagement rings and fashion gold jewelry, although with limited growth in silver jewelry sales.”

During the holiday period, the New York-based company opened U.S. stores in Houston, Jacksonville and Los Angeles; Asia-Pacific stores in China (Kunming) and Korea (Seoul); and European stores in Spain (Barcelona) and the U.K. (London). The company operates 232 stores (96 in the Americas, 56 in Japan, 51 in Asia-Pacific and 29 in Europe), versus 220 stores a year ago.

Fewer People Spent More on Luxury Jewelry

Luxury jewelry spending increased 3 percent, year-over-year, in the third quarter of 2010, according to American Express Business Insights. The average transaction size for luxury jewelry purchases increased 6 percent while transaction volume for the category fell by 3 percent.

These are much lower numbers than what was reported by the Spend Sights Report—Luxury Retail survey for the prior two quarters. For example, spending on luxury jewelry increased by 18 percent in March and 17 percent in April, while increases for the last four consecutive months was below 6 percent—including no increase at all in September.

Males were responsible for 71 percent of consumer luxury jewelry purchases and consumers over 46 years of age were responsible 54 percent of total jewelry spending—according to the report, which tracks furniture and home furnishings, apparel and accessories, jewelry and department stores.

Shoppers under the age of 35 made up 25 percent of total luxury jewelry customers in the third quarter, slightly higher than the year prior at 21 percent.

Overall, the luxury retail sector continued to show improvement as consumer confidence slowly restores, the report states.

According to the report, furniture and home furnishings posted the most significant year-over-year gains of the third quarter with a 13 percent increase, with department stores were not far behind at 10 percent. Overall spending for apparel and accessories for the period rose by 5 percent.

Individual consumer spending was up across all luxury retail sectors and showed an increase of 12 percent in furniture & home furnishings. Small and large businesses, however, continued to hold back and decreased spending in this category by 2 percent and 7 percent, respectively.