Tiffany & Co.'s sales are now drumming to the beat of a global rhythm — and it has big growth plans ahead.
As the high-end specialty retailer posted fourth-quarter earnings that were essentially flat compared with year-ago results, the company clocked international sales that reached the $1 billion mark for the year despite continued weakness in Japan.
Tiffany wants to maintain that pace, with plans to accelerate its store expansion program in the U.S. to five to seven new stores annually from three to five a year, and the opening of 10 stores internationally in 2007, according to Mike Kowalski, chairman and chief executive officer, during a conference call with Wall Street analysts.
In a telephone interview, Mark Aaron, Tiffany's vice president for investor relations, said the retailer will open three stores in Japan, two in Tokyo and one in Hiroshima, this year. The company, which last month opened a store in Seoul, will open a unit in Singapore at the Changi airport in 2007. In Europe, a store is set to open later this year in Hamburg, Germany.
The retailer has 52 stores in Japan and four in Mainland China. In China, there are two stores in Beijing, one in the Palace Hotel and the other at Oriental Plaza, and two in Shanghai, one in City Plaza and the other in Plaza 66. Off the mainland, there is a store in Macau and six sites in Hong Kong.
Indicating Tiffany's growing interest in the Chinese market, which offers huge potential for luxury brands, the retailer has established an informational Web site in the country. "We wanted to build brand awareness, and the informational site will help us do that," Aaron said.
He said the company felt it was too early to have an e-commerce site for China, which will also mean setting up an infrastructure for order fulfillment services. The baby step in China is not unlike what Tiffany did a few years ago in setting up its informational site in Japan before expanding into e-commerce in 2005. Tiffany also operates e-commerce sites in the U.S., the United Kingdom and Canada.
"All international markets are growing at a robust rate, [although] Japan has softened....Japan is still very important to us, but those other regions also have become important so that we are more geographically diversified," Aaron said.
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