Things are not looking particularly shiny — financially speaking — for Tiffany & Co.
Reuters reports that, following a significant dropoff in sales over the holiday season, the high-end jewelry retailer is being forced to cut jobs.
The outlet posits that Tiffany’s very position as a luxury outfit — thereby targeted primarily at the most affluent consumers and not prone to offering promotions to attract cost-conscious shoppers — has contributed to its current struggles, along with the fact that the strong value of the dollar has negatively affected the company’s business from tourists visiting the U.S.
“Weak holiday trends occurred prior to recent worldwide financial market turmoil,” Oppenheimer analysts wrote in a note regarding Tiffany & Co. (shared by Reuters). “Indications of a further stepdown in sales trends are likely to further unnerve investors.”
While Tiffany was (and is) in the midst of an attempt to expand its consumer appeal — particularly to younger, style-conscious shoppers — with new designs and a marketing push in that direction, those efforts, shares Reuters, were not sufficient to offset the 3 percent decline in sales during the holiday season. Taking into account the impact of the dollar, Tiffany’s losses for that period, adds the outlet, translate as 6 percent, totaling $961 million.
Yesterday (Jan. 19), shares in Tiffany & Co. fell to what Reuters reports is close to a three-year low (of $62.90).
Having previously estimated that its total earnings for 2015 would decline between 5 and 10 percent, Tiffany’s more recent expectation is that said decline will be at the high end of that range, at 10 percent.
Despite Tiffany’s less-than-optimal current situation, Mark Aaron, a spokesman for the company, pointed out that the job cuts will not be as severe as the ones the company made in 2008 (which affected 800 employees, says Reuters), nor will they be related to store closures.
The outlet adds that Tiffany expects “minimal growth” in sales and earnings in 2016.