NEW YORK — Tiffany & Co. has set an ambitious agenda, highlighted by a new, smaller store format to showcase accessibly priced women's jewelry.
The 2,000-square-foot store model unveiled Wednesday to securities analysts and investors during a breakfast at the week-old Wall Street unit is called Tiffany & Co. Collections. The company plans to open 70 of the shops, which will feature women's jewelry ranging from slightly less than $100 to $15,000.
The concept will not include the engagement rings or high-priced statement jewelry for which Tiffany is famed. In the past five years, engagement jewelry in the U.S. has grown at a rate of 20 percent annually.
The first Collections location is slated to bow in fall 2008 but hasn't been identified. Three to five Collections stores are to open each year, starting in 2009, eventually reaching a total of 70.
"We believe there is a much larger Tiffany universe," Michael J. Kowalski, chairman and chief executive officer, said in an interview. "[The stores have] a more modern design that will allow us to showcase jewelry, so you can interact with it and explore. It's simply a new way of looking at Tiffany."
The luxury jeweler has been on a mission to show customers its diverse product range, from tabletop to silver jewelry. It is a luxury pioneer in lower Manhattan and also intends to develop its watch business. In 2002, Tiffany launched a 5,000-square-foot store concept that brings in sales of $1,000 per square foot. Starting in 2009, the company plans to open five to seven of these full-line stores until reaching a total of 100. There are now 68 Tiffany stores in the U.S.
Kowalski predicted that the Collections shops would bring in more than $1,000 per square foot.
"We anticipate the stores to be more profitable," he said. "The gross margin is higher, capital expenditure will be more efficient. It's a smaller inventory investment without engagement rings."
The decision by Tiffany to focus on more accessibly priced jewelry is notable because several jewelry companies are pushing high jewelry and rare pieces that sell from the hundreds of thousands of dollars to the millions. Chopard, Graff, De Grisogono, Leviev and others all claim that the consumer demand for these pieces is seemingly unquenchable, considering supply of the rare gemstones and the labor that goes into the pieces.
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