The Tiffany Board of Directors has extended the expiration of its stock repurchase program. They have also authorized the additional repurchase of up to $500 million of common stock.
The Company plans to repurchase up to $637 million of its common stock through 2011.
Michael Kowalski, the company’s chairman and chief executive officer, said, “We have repurchased a considerable amount of stock in recent years, but have been substantially more active in 2007. In fact, we have spent approximately $400 million to repurchase 8.9 million shares in the current quarter since November 1, 2007.”
The company continues to expand its retail network.
Tiffany plans to open two new stores in Japan making their total number equal to 56. The company is expected to open boutiques in Tokyo’s Matsuzakaya Ginza department store, and in Fukuoka’s Hakata Daimaru department store on March 1, 2008.
The company has announced the opening of a new 100 square meter boutique in the Abu Dhabi Trade Mall. According to Tiffany’s press release, this room “faithfully replicates” the quite and comfortable ambience of its Fifth Avenue boutique in New York.
In 2008, the company plans to open new stores in Madrid, the Spanish capital, and in the City of Columbus, Ohio.
In all these cases, the company’s stores will have their traditional format.
Tiffany expects a 10-percent increase in their net sales worldwide through 2008. This figure includes higher (within a 10% limit) retail sales in the U.S.A. and reflects lower comparable store sales in the U.S.A. as well as some other indicators.
Michael Kowalski, Tiffany’s chairman and chief executive officer, said, “Having completed our planning process for the new fiscal year, we now think it is appropriate to share our thinking with investors. Our U.S. sales results for the month of January were modestly improved from December 2007 and we are seeing ongoing strength in Asia-Pacific outside Japan and in Europe. Generally speaking, we are planning our U.S. businesses cautiously for the first half of 2008 while planning for continued healthy international sales growth throughout the year.”
The company’s fiscal year began on February 1.
Luxury goods maker and seller Richemont has published its preliminary results for the fourth quarter 2007.
The group reports strong demand for such goods as jewelry, watches and writing instruments. In the mentioned period, the sales went up 8% reaching approximately $3.3 billion.
The group attained its best results in Asia Pacific and Europe.
According to the company, its jewellery houses reported a 15% major sales growth in the quarter. Cartier points to strong growth in Asia Pacific, whereas Van Cleef & Arpels reports strong growth in all regions.
According to the Luxury Institute survey, Harry Winston was named the most prestigious brand of 2008 by high net-worth consumers. Respondents view this trademark as having “a great reputation,” and being the leader in diamond design, and emphasize the quality and exclusivity of its jewelry.
Buccellati and Van Cleef and Arpels tied for the second place while Graff placed third.
“The luxury jewelry industry is still very inwardly-focused,” said Milton Pedraza heading a New York-based research company. “This segment of the luxury industry can benefit from understanding how affluent consumers perceive jewelry brands defining what luxury is, and what is not.”
Vacheron Constantin was also named as the most prestigious luxury watch brand by prosperous consumers. The second and the third places were taken by Patek Philippe and Piaget accordingly.
Blue Nile reported it was starting international delivery of goods to 12 countries of Europe and the Asia-Pacific region. Now, besides the U.S.A., Canada, Great Britain and Ireland, the Internet store selling diamonds and jewelry will accept orders from Australia, Belgium, France, Germany, Hong Kong, Japan, the Netherlands, New Zealand, Singapore, Spain, Switzerland and Taiwan.
Company President Mark Vadon says the company is committed to expanding its international operations as its primary target.
Probing new markets for further growth, Blue Nile takes its decisions proceeding from relevant metrics, such as their general acceptance of online shopping, market size and, most important, local consumer demand growth, particularly in the Asia-Pacific region.
On December 8, 2007, Blue Nile filed a complaint in the Washington State Federal Court against Yehuda Diamond Company. Recently the defendant told the court that the company had not done anything unlawful posting price and appearance comparisons of its products (clarity-enhanced diamonds) to those of Blue Nile (which sells natural non-enhanced stones). Blue Nile claimed that Yehuda Diamond implications were misleading clients.
In its recent statement, Yehuda Diamonds informed it was going to fight Blue Nile for its right to compare prices. “Consumers have a right to know how much they stand to save by shopping with us and we will defend that right both in court and the marketplace,” the company said.
In its declaration to the court, Blue Nile informed that, although diamond enhancement added to diamond clarity, Yehuda Diamonds was misleading its clients comparing its prices with prices for Blue Nile untreated diamonds.
Yehuda Diamonds enhances diamonds to improve their clarity by way of filling feathers and then sells them in stores, unlike Blue Nile, which sells its products through the Internet only.
As promised, Blue Nile published its financial results on February 12.
The Web company’s net income in the fourth quarter registered an increase of 31.1% and totaled $7.5 million. $7.5 million. Net sales grew 23.3% to $111.9 million. International sales went up 155% totaling $7.2 million. During the quarter, the number of orders rose 14.9 percent and the average order was $1,411. The average engagement ring sale was $6,200.
Profits for the year rose 34% (to $17.459 million). Sales rose 27% (to $319.3 million). Year-end international sales rose 108% (to $17.2 million). Sales for diamonds in the $25,000 and higher category rose 50%.
Summing up the 2007 results and forecasting its further development, De Beers has published a detailed press release partially cited below where it sees into jewelry business expansion.
Demand
Consumer sales of diamond jewelry have increased by around 3% for 2007 as a whole. Strong sales growth in China, India and the Middle East was partially set off by a disappointing Christmas season in the U.S. market.
Investments into independently managed business
During 2007, De Beers Diamond Jewellers, a trade joint venture with LVMH, posted a 44% rise in sales through its own retail network due to new franchising agreements. In 2007, the company opened eight new stores in the U.S.A., Japan, Dubai and Korea totaling their number to 23 worldwide. In 2008, further expansion is expected including new stores in the U.S.A., Hong Kong, Russia, the Middle East and a flagship in Tokyo.
Outlooks
The outlook for 2008 is tempered by a high level of uncertainty in the world market. The economic conditions in the U.S.A. may continue to impact diamond jewelry sales through the first half of the year. Nevertheless, we expect strong demand from China, India and the Middle East to sustain pricing for larger and better quality diamonds.
The strong demand in the emerging markets of China, India and Russia preserves a possibility for continued growth of rough prices. Under these circumstances, De Beers continues to concentrate on reorganization to secure a leading position in the ever-competitive diamond industry. Having a market share of about 40%, the company’s strategy is aimed at prospecting and developing new deposits; assisting its partner countries in their intention to produce added value; finding new and efficient ways of management for the global group of companies; as well as developing innovative marketing moves, such as De Beers Diamond Jewellers and FOREVERMARK, to upswing the demand and create new cash flows.
The Italian Trade Commission (ICE) announced a new ‘Made in Italy’ advertising campaign starting from February 2008 in the U.S.A. Italian-born actress, model and business entrepreneur Isabella Rossellini was shot for advertisements to be published in the “Harper’s Bazaar”, “Esquire”, “Architectural Digest” and other magazines.
The advertising commercials celebrating the “high-quality sophistication and luxury of Italian fashion, accessories, jewelry and home products” were shot in Rome. Apart from printed editions, the ads will appear on the Web in Style.com and FashionWireDaily.com, and will be broadcast by local TV and radio stations in the United States.
Trying to stress the quality and charm of Italian luxury products, the commission has decided on Ms. Rossellini for the advertising campaign as the best person to translate what is called “Italian style.” Italian Trade Commissioner and Executive Director for the USA Aniello Musella said, “It is important that the American public understands the values and qualities to be discovered in Italian products available in the U.S.”
“Let yourself be charmed by an Italian” is a central slogan of the advertising campaign voiced by Ms. Rossellini in an attempt to highlight the perfect style and passion for handcrafted detail that makes Italian products so special and unmistakable.
Since the 1950s, when Italy started its export to the U.S.A., the latter has become the largest market for Italian made luxury products.
