Byline: Wendy Hessen

NEW YORK — Consistent with its move to increase control over all its distribution channels, Tiffany announced Thursday that at the end of this year it would discontinue wholesaling to independent jewelers and department stores in the U.S.
James E. Quinn, vice chairman of Tiffany, said in a statement that, “U.S. trade distribution, which began 14 years ago, accounts for less than 3 percent of Tiffany’s total sales and has been only marginally profitable.”
Tiffany currently sells jewelry, gift, table and flatware in 265 doors in the U.S. The move does not effect Tiffany’s wholesale sales in Canada, the Caribbean or Puerto Rico.
The decision to limit distribution to its own stores and catalog is not a major surprise. As the firm has expanded its number of freestanding units — which will number 38 at yearend — reports have routinely surfaced that the wholesale distribution would be eliminated. A year ago, Tiffany decreased the assortment of products available to its wholesale accounts, including a key proprietary brand, Elsa Peretti.
“The writing was on the wall when Elsa Peretti was removed from our assortment,” said John Green, president and chief executive officer of Lux, Bond & Green.
The Hartford-based jeweler is Tiffany’s oldest continuous wholesale account, selling Tiffany jewelry, home and gift merchandise in four of its five stores.
“This is all very predictable and I’m not upset,” Green said. “Tiffany merchandise accounts for about 4 percent of our total. Actually, we’re viewing this as a great opportunity. It’s been easy to show and sell Tiffany, but now we will just have to work a bit harder at our own branding. Our business is growing at the same or even better rate than Tiffany’s, and in the long run it will be better for both of us.”
Not everyone was so sanguine.
“I’m disappointed,” said Mark Udell, owner of London Jewelers, which has five stores on Long Island. “They have developed a nice partnership with key jewelers who have really supported them over the years. I would have liked to have the opportunity to talk to them about it. Given the choice, I would have definitely continued with Tiffany.”
When Tiffany opened a store in the American shopping center in Manhasset last year, London, which also has a store in the center, replaced its Tiffany boutique with a Bulgari boutique. It continued selling Tiffany merchandise in its East Hampton and Greenvale stores.
Quinn said Tiffany will “work with our retailers through the holiday season.”
“They have placed their orders and we expect to fulfill those orders,” he added. “After the holidays, we will visit each account and are prepared to take back inventory, signage and other display materials and furniture.”
He said the firm will continue with its plan of opening three to five Tiffany units each year, with the ultimate number possibly reaching 70 stores.
Several retailers said they would miss the bridal and tabletop merchandise the most, because of its high quality and good pricing. Add to that Tiffany’s recent purchase of a diamond mine, which will insure competitive pricing on its bridal jewelry, and some speculated that the entire bridal area could be becoming a key focus for Tiffany expansion.
Quinn acknowledged that “the bridal and tabletop arena is a good business for us, but it could be better.”
“We want to devote considerable attention to it over the next few years,” he noted. “At some point, it is a category particularly suitable to online sales, although that won’t happen right away.”
Tiffany is slated to launch its own web and e-commerce sites, probably within the next five or six months, Quinn said.