By  on October 27, 2008

Tiffany & Co. is putting its contemporary foot forward with a new smaller retail format that opened Friday at the lifestyle center Americana at Brand in Glendale, Calif.

The 2,600-square-foot store spotlights Tiffany pieces in a comfortable, airy environment meant to exemplify the opposite of buttoned-down selling. Customers are encouraged to try on the jewelry, with entry and middle price points ranging from $80 to $42,000 and averaging $200 to $5,000. Engagement rings and statement pieces, the steepest-priced category, aren’t available.

“Our whole intent is to zero in on the contemporary fashion collections and showcase them in a more artful and accessible way,” said Beth O. Canavan, executive vice president at Tiffany & Co. “We said, ‘Take the blinders off. Forget about the rules for how we merchandise today. Let’s think about how women shop.’”

During the more than two years it took to develop the concept, the conclusion was reached that women enjoy what Canavan described as “a sense of adventure” and to peruse wardrobe options when they shop. The standard Tiffany jewelry groupings by metal are abandoned in the store in favor of groupings by style and category. There are displays featuring Tiffany’s array of bangles and stackable rings, and a charm bar, for example.

The design, which was created by an in-house team led by Canavan and architectural firm FRCH, is expected to imbue the store with a “hushed elegance,” said Canavan. A neutral color palette adheres to browns, creams and whites. Multicolored rosewood is used on the exterior with glass and, along with white oak, in interior furnishings and display cases. The flooring is of ceramic stones and tan carpeting, and the ceiling gold leaf.

Tiffany’s signature blue is present on digital screens with soothing imagery, in glass in select displays on which jewelry is set with the signature blue boxes. Robert DuGrenier designed two crystal chandeliers, and local artist Suzanne Erickson contributed two works of the abstracted human form that can be draped with Tiffany pieces.

Along the store’s walls are displays with a dominant collection, including Frank Gehry, Elsa Peretti and Paloma Picasso, that contain items from other collections to demonstrate how jewelry can be mixed and matched. The store’s assortment includes Atlas, 1837, Somerset, Hearts, Swing, Jazz, Metro, Jean Schlumberger and Diamonds by the Yard pieces. Jewelry is openly exhibited on mountings, under glass that’s not fully enclosed and in drawers that customers are invited to open. “What it becomes is an evolution of the jewelry box,” said Canavan.

Store employees, about 11 of whom man the Glendale location at any given time to inform customers they can handle the jewelry, have been schooled as jewelry stylists, according to Canavan.

Tiffany set up a prototype of the new concept store in its New Jersey distribution center for months before it was unveiled last week. Focus groups conducted at the mock-up revealed that women who had been to a Tiffany store before “thought that most of the [contemporary] jewelry was brand new to Tiffany,” according to Canavan. “They said they would continue to be a good customer at the [traditional] store, but they would come here when they were shopping for themselves,” she reported.

Tiffany considered naming the concept something other than Tiffany & Co. and dubbed it “collection store” internally, among other titles. “We studied so many different names. There was not one that conveyed what we were trying to do,” said Canavan. And she noted that the new store’s contents can be found in traditional Tiffany stores and that products haven’t specifically been crafted for the concept.

Although Canavan said the current economic situation wasn’t a factor in Tiffany’s decision to move forward with the smaller concept, she hinted the store could be attractive to consumers searching for lower-priced items. The grim economic news hasn’t altered the rollout strategy, she said. In addition to outdoor lifestyle centers, she believes the concept could be appropriate for malls and street retail districts as standalones. Tiffany has identified 70 potential locations and has outlined plans to open three to five of the new concept stores annually; however, Canavan anticipated two would bow in 2009 and three or four in 2010.

The concept stores will be 2,000 to 3,000 square feet and located in Tiffany’s existing markets. Canavan predicted a bit of cannibalization with established Tiffany stores in a market for the first year or so, but after that, forecasts that these stores will garner a broader customer base overall in the area. “We expect to see some of our current customers and also expect to attract a new customer,” she said about the new concept. “We are going to be very careful and considerate about placing these stores.”

Across Tiffany’s retail portfolio of roughly 200 units, stores span from 1,300 to 18,000 square feet, but average around 7,100 square feet. A 5,000-square-foot concept was introduced early in the decade and, since fiscal year 2001, most new stores have been in the 5,000- to 6,000-square-foot range. That concept is estimated to bring in sales of $1,000 per square foot, which Canavan said the new concept should reach “at least.”

While visiting the concept store Thursday morning, Rick Caruso, president and chief executive officer of Caruso Affiliated, developer of Americana at Brand, expressed satisfaction with what he saw. “For the first time, they have broken down the barriers so you can touch and try on,” he said. “It meets the needs of the market out here.”

For the second quarter ended July 31, Tiffany’s net earnings rose 21 percent to $80.8 million. Worldwide sales jumped 11 percent to $732.4 million, driven by strong demand in Europe and Asia, where sales increased 35 percent and 17 percent, respectively. Sales in the Americas climbed 3 percent, but comparable same-store sales in the U.S. declined 4 percent for the quarter.

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