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Despite the COVID-19 crisis, Tiffany & Co. sales have boomed in China, beginning in April and May (Pictured: Jackson Yee, the celebrity brand ambassador for the new Tiffany T1 collection).
Despite the COVID-19 crisis, Tiffany & Co. sales have boomed in China, beginning in April and May (Pictured: Jackson Yee, the celebrity brand ambassador for the new Tiffany T1 collection).

Tiffany & Co. reports 37 per cent decline in sales; optimistic for China-led recovery

Following the severe disruptions of the COVID-19 pandemic, Tiffany & Co. has reported a 37 per cent decline in international sales for the six months to 31 July, to $US1.3 billion, and an overall loss of $US33 million.

The declines were concentrated in the US – its largest market – falling 45 per cent for the period. At the time of publication, the country had the highest proportion of COVID-19 cases and deaths, and was also recently beset by protests which led to additional temporary store closures.

Alessandro Bogliolo
Alessandro Bogliolo
"Retail sales in Mainland China began to rebound in April and continued to accelerate in the month of May, during which retail sales increased approximately 90 per cent as compared to the same period in the prior year"
Alessandro Bogliolo, Tiffany & Co.

Sales also fell in Tiffany & Co.’s other key markets, including Europe and Japan, which both recorded a 34 per cent decline.

However, Alessandro Bogliolo, CEO Tiffany & Co., pointed to a promising sales rebound in Mainland China in April and May.

“Retail sales in Mainland China began to rebound in April and continued to accelerate in the month of May, during which retail sales increased approximately 90 per cent as compared to the same period in the prior year. This robust recovery continued throughout the balance of the second quarter, with retail sales up approximately 80 per cent for the full quarter as compared to the same period in the prior year,” he said.

Bogliolo attributed the success to “effective local market messaging” – particularly a new marketing campaign featuring celebrity brand ambassador Jackson Yee, which generated “impressive levels of social media fan growth and consumer engagement” – as well as strong sales for the new Tiffany T1 gold and gold-and-diamonds line.

He also noted an increasing proportion of sales from e-commerce – a trend which has accelerated across the jewellery industry during the COVID-19 lockdown period.

“Globally, our e-commerce business was up 123 per cent... This puts global e-commerce sales at approximately 15 per cent of our total global net sales for the first half of fiscal 2020 versus 6 per cent in each of the last three full fiscal years,” Bogliolo explained.

While the company recorded a loss of $US33 million for the first half of the year, it made a $US32 million profit for the three months to 31 July – compared with $US136 million for the same period in 2019.

Expressing optimism for the rest of the year, Bogliolo said, “I firmly believe that Tiffany’s best days remain in front of us because of the team’s demonstrated agility in response to unforeseen hurdles and our stated strategies, which continue to prove sound. Our second quarter results and August trends to date, in light of these challenging times, confirm the power and resilience of this venerable brand.”

The company closed one store and opened five, bringing its total international store count to 322 as at 31 July 2020.

The results follow the delay of Tiffany & Co.’s merger with French luxury conglomerate Moët Hennessy Louis Vuitton SE (LVMH), which was recently pushed to 24 November.

 

More reading:
UPDATED TIMELINE: Inside the Tiffany & Co. and LVMH merger
LVMH reiterates commitment to Tiffany & Co. takeover
Australian regulators stall LVMH acquisition of Tiffany & Co.











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