Tiffany & Co. started off the year on a strong financial footing as sales and profits grew across regions and product categories — and chief executive officer Alessandro Bogliolo said this is only a start.
The jewelry company said first-quarter net sales increased 15 percent to $1 billion, while net earnings, aided in large part by new business-friendly tax regulations, rose 53 percent to $142 million. Comparable sales increased 10 percent, a number that now includes web, catalogue and store sales. Wall Street was excited by the quarter and pushed the company’s shares up 23.3 percent to $126.05, an all-time high.
Sales growth was highest in the Asia-Pacific region, increasing by 28 percent to $329 million, followed by Japan, which rose 17 percent to $151 million; Europe, which rose 13 percent to $107 million, and the Americas, which rose 9 percent to $425 million. All of Tiffany’s main categories — including collections, engagement and designer — saw growth, the company said.
Bogliolo, who took on the ceo role in October after about four years as the head of Diesel, told WWD he’s “particularly encouraged by the breadth of sales growth across most regions and all product categories,” but added that he’s focused on “sustainable growth” and further implementing his strategy of improved marketing, product innovation and the shopping experience.
“The way we see this quarter, as pleased as we are, it’s really the beginning of a journey,” Bogliolo said. “A brand is not built in one day…and also the evolution is not something that happens in a quarter, like sometimes Wall Street tends to think.”
This brand evolution is set to include more of a focus on marketing and overall sales operations on Tiffany’s position as a more “inclusive” jewelry brand, something Bogliolo sees as setting the company apart from competitors.
“I’m grateful to my predecessors that there’s a DNA in the brand of being inclusive and this is extremely relevant nowadays and a very important point of difference compared to other luxury brands, especially European jewelers, because their DNA is more linked to the past, to royalty, to exclusivity,” Bogliolo said. “This brand not being about formality is a very, very strong point and we will voice it much more.”
This ethos is already apparent in some of the brand’s newer elements, like the Blue Box café at Tiffany’s New York flagship, which Bogliolo boasted as being informal and modern with a “huge appeal,” and also work by Reed Krakoff, who became the brand’s chief artistic officer in January 2017.
Krakoff started out in November with a “total revolution” of Tiffany’s collection of home goods and accessories, like flatware and china, with the idea that people rarely have a need for a large set of dinnerware anymore, and moved on to eyewear and leather accessories, all of which Bogliolo said were “very strong” during holiday and that momentum carried over into the first quarter. He said there’s now more of a “cool factor” in this area that’s selling.
The first jewelry collection under Krakoff just launched this month — fine and high jewelry designed as a modern take on florals, aptly titled Paper Flowers — and Bogliolo said it, too, is an example of Tiffany’s newer, “fresher” direction.
“It’s a very beautiful experience for me personally to work with [Krakoff]…he’s very talented, but he has very sophisticated taste and he is a quintessential New Yorker, and this is crucial for a brand like Tiffany,” Bogliolo said. “At the same time, he’s very commercial, in the good sense — he’s very close to the market, he knows what people like, what people want.”
Despite revamped non-jewelry categories doing well so far, Bogliolo was clear that “at the end of the day, Tiffany stands for diamonds,” and that engagement rings in particular, leaning toward solitaire styles, are once again selling well after a few difficult years.
“The famous Millennials still love each other and still love to use diamonds to express that love,” Bogliolo said.
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