Tiffany & Co has posted better-than-expected Q4 results and its shares rose to a 19-month high last week after deciding to push its fashion jewellery ranges amid poor sales.
The New York-based high-end jeweller recently begun driving higher-margin, more affordable fashion jewellery and has since seen improved global sales.
Gold items from the rapidly expanding Tiffany T collection have seen some of the retailer’s strongest sales worldwide.
“The fashion category is where we have enjoyed the most relative success, so I think that speaks at least directionally of some success in appealing to millennials,” chairman and interim chief executive, Michael Kowalski, said in a conference call.
Results showed sales of jewellery under £400 were up in the fourth quarter and Tiffany & Co plans to drive this arm of its business in response to “disappointing” ecommerce sales.
For the full year, the firm suffered a 5% decline in comparable store sales and performance across “all categories were generally soft”. However, in Q4 sales increased 1% to nearly £1 billion.
Higher foreign tourist spending in the UK helped the company’s European constant-exchange-rate sales rise 1% in Q4.
But in Europe overall, total sales for the fourth quarter were down 7%. Tiffany & Co blamed lower spending by local customers and foreign tourists across continental Europe. Strong performances in the UK, the Americas, China and Japan are mainly responsible for Q4 growth.
For the year ahead, Tiffany & Co predicts single digit growth.
In a report by the BBC, Neil Saunders, managing director of GlobalData Retail, was quoted as saying: “American consumers, especially younger demographics, see it [Tifffany & Co] 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.”