Jewellery firm Tiffany makes 'patchy progress'
- 17 March 2017
- From the section Business
The high-end jewellery firm Tiffany is making "patchy" progress but it is not yet back to full health, according to one retail expert.
Better sales in Japan and China helped it to report a 1.3% rise in sales to $1.23bn between November and January.
It has struggled with sales in its home US market, particularly among the younger generation.
Sales at its New York store, close to Trump Towers, were hit by the extra security, which disrupted access.
The company said it saw customer traffic dip by about 14% in November and December. The flagship store accounts for a significant part of the group's sales, sometimes up to 10%.
But it is thought that should improve now that President Donald Trump has moved to Washington, although Melania Trump and son Barron Trump still live there.
Neil Saunders, managing director at Managing Director of GlobalData Retail says the company's troubles range more widely than the flagship stores and lower tourist spend.
"Tiffany is a brand that is increasingly overlooked by American consumers, especially younger demographics, who see it is as old-world luxury.
"Just as was the case at the start of the year, Tiffany is still failing to connect with many shoppers segments and continues to lose ground to rivals," he says, adding that Europe was also a problem region for the company.
Christmas has also become less important for jewellery buying, a key driver for Tiffany sales, a "distinctly unhelpful" trend, Mr Saunders says.
"While it remains the most important single period for purchasing, it accounts for a much smaller share of annual sales than it once did," he says.
The company's newly-installed interim chief executive, Michael Kowalski, remains positive:
"Despite macroeconomic and geopolitical challenges in the past year that we believe will continue in 2017, we strongly believe that Tiffany's strategies are sound and that we have meaningful growth opportunities," he said in a statement accompanying the results.
Net profit fell to $446m million in the quarter, compared with $464m the previous year.
Looking ahead, Mr Saunders believes the new management team need to bring about a "fundamental" change in products and approach to selling. He says the Superbowl advertising which highlighted Lady Gaga as the face of the brand was a good start in bringing a more contemporary feel to the firm.
But he says the company also needs to update the stores and get away from the wood lined walls and thick carpets that give the shops an old fashioned feel.