| Luxury jeweler Tiffany & Co |
[Mar. 13th, 2009|02:43 pm] |
Luxury jeweler Tiffany & Co. said it plans to close its unprofitable Iridesse pearl jewelry chain, partly because of a tough economy that has hindered demand for jewelry.
Tiffany spokesman Mark Aaron said Iridesse hasn't been profitable since it opened in 2004. Iridesse also generated "very modest" sales worth less than 1 percent of Tiffany Earrings total revenue, Aaron said.
"It had been posting an operating loss since it opened," Aaron said. "It might have been viable if there was a better retail environment, but the economy was the last straw."
Aaron said Iridesse stores will start closing once Tiffany is able to reach agreements with its landlords and sell off inventory. Aaron said the store closings will result in some job losses, but could not yet say how many.
"We hope to place at least some of the employees in positions at Tiffany Necklaces
Aaron said.
There are 16 Iridesse locations nationwide, Aaron said, and are located mostly on the East and West coasts.
Aaron said Iridesse's closing allows Tiffany to turn its focus to its core Tiffany brand.
Like many other retailers, Tiffany has been hurt by softness in luxury spending and continued layoffs nationwide.
On Monday, Standard & Poor's lowered its fiscal 2010 profit and sales forecast for Tiffany on economic weakness. However, S&P said it still expected Tiffany to emerge from the recession with increased market share and expansion opportunities.
In January, Tiffany said same-store sales for the holiday season slid 24 percent mostly because of softness at U.S. stores. Same-store sales, or sales at stores open at least a year, are a key indicator of retailer performance since they measure growth at existing stores rather than newly opened ones. At that time, the New York-based company also lowered its full-year profit forecast.
Looking back to the third quarter, Tiffany's earnings topped Wall Street expectations, helped by higher sales in the Asia-Pacific region and in Europe.
The company is slated to report fourth-quarter results on March 23. At that time, the company will provide more information on charges to close the stores, Aaron said.
Shares of Tiffany added 19 cents to close at $18.45. Last week, the shares hit a nine-year low of $16.70 |
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