Tiffany Looks to China for Growth

Tiffany & Co. Shanghai Store.  Photo: Cal Otero

Luxury retailer jeweler Tiffany & Co. said it will open more stores in China than anywhere else in the world over the next three years.

“China will rapidly become the place where we will have the greatest number of new stores. Within the next three years, the number will stand between 25 and 30,” Michael J. Kowalski, chairman of Tiffany & Co, told China Daily.

The New York-based company plans to open four stores in China during the current fiscal year, which ends January 2011 and will invest more heavily in the country’s second and third tier cities, Kowalski reportedly said.

Expansion in China is being driven by robust sales growth in the market, Kowalski said. In the second quarter of 2010, Tiffany witnessed its fastest growth in China, with a 27 percent increase, year-over-year. He expects sales in the Asia-Pacific region, led by China, to increase by more than 20 percent. He said China will surpass the United States as the largest jewelry market in the world over the next five to 10 years.

The jeweler currently has 12 retail stores and boutiques in China, including three in Beijing, four in Shanghai and one in Chengdu. Its store at the China World Shopping Mall in Beijing opens this month, with another in Kunming opening in December.

To attract as many customers as possible in its fastest-growing market, Tiffany unveiled its 2011 jewels and diamonds collections in Beijing on October 22—the first time the brand has unveiled a major new collection outside the U.S.

“We aim to let Chinese customers become more familiar with the connotation and history of our brand through this activity, which brings Tiffany closer to its Chinese buyers,” Kowalski reportedly said.

In contrast to other luxury brands, whose stores are operated by their Chinese distributors, all of Tiffany's boutiques in China are owned directly by the company, and that will continue to be the case, Kowalski reportedly told the newspaper. Currently, 97 percent of Tiffany stores around the world are operated directly by the company.

Retailers Upbeat on Platinum Jewelry Sales

Platinum "Triad" ring that recently received an AGTA Spectrum Award in the Bridal Wear - Platinum Honors category.

Retailers are showing a renewed sense of optimism when it comes to sales of platinum jewelry, according to a recent survey by Platinum Guild International, an organization that promotes the platinum jewelry to consumers and the jewelry trade.

The survey, conducted by GFK Audits and Surveys, reports positive growth in platinum bridal jewelry sales for the first half of 2010, and a projected 3 percent increase through the end of the year.

A total of 56 percent of the 419 small chain and independent retailers surveyed plan to purchase additional platinum product through the end of 2010. In particular, they are stocking up on platinum bridal inventory as they prepare for increased engagement business during the holidays.

The strongest factor contributing to the strength of platinum sales in 2010 was the rising price of gold, PGI said. Platinum’s competitive pricing against gold attributed to 31 percent of retailers stating platinum’s price as a positive attribute, while an additional 29 percent found value in platinum’s unique properties of durability and strength.

The survey also reported that some retailers attributed platinum sales increases due to their staff suggesting platinum to customers more often than before, PGI said.

More than a quarter of the retailers surveyed are considered Preferred Platinum Partners, those who work closely with PGI to increase platinum jewelry sales.

The Pentagon's Jeweler Remembers 9/11

The Pentagon in January 2008. Photo credit: Wikipedia; Source: the Pentagon; Author, David B. Gleason

While much of the world will be focused at the World Trade Center complex for events in remembrance of the 10th-year anniversary of the 9/11 terrorist attacks, the Pentagon will hold its own low-key commemoration. One person who will not be attending the Sunday event is Brian Mann, who has spent his entire working life in the building that serves as the headquarters for the U.S. Department of Defense.

About 23,000 military and civilian employees work in the 6.5-million-square-foot structure, considered to be one the world’s largest office buildings by floor area. To service their needs there are host of private companies in the concourse area that include a food court, pharmacies, laundry and dry cleaning services, a florist, a candy store, an electronics store and a barber shop. There’s also a family retail jeweler, David Mann Jewelers.

The retail operation was founded by David Mann in 1945, three years after the Pentagon opened, as a watch repair shop. Over the years the business grew to a full-scale jewelry retail operation. It is now owned and managed by David’s sons, Brian and Conrad. “I’m 57 years old and my brother is a little older,” Brian says. “It’s the only job we’ve ever known.”

The brothers were working in the store as usual on September 11, 2001, when five al-Qaeda operatives hijacked American Airlines Flight 77, en route from Washington Dulles International Airport to Los Angeles International Airport, and deliberately crashed it into the west side of the Pentagon at 9:37 a.m.

The brothers’ store is on the southeastern side of the building. They were close enough to the crash site to know that something unusual had happened but far enough away to not know what it was.

Brian says at first he thought it was a construction accident, because that portion of the building was undergoing a renovation. He and brother realized quickly that it was something worse, perhaps a bomb, when they saw people running and were told by the Pentagon police to leave. He says as he was driving away he saw the black smoke from the fire. He was able to get in touch with his wife and son and daughter while in the car driving to his Maryland home, but it was difficult because of all the cell-phone activity.

“There was a lot of confusion at that particular time,” Brian says. “No one knew exactly what happened. It was not until I was able to get in the car and head home hearing it on the radio that it obviously was a plane and it was not a construction mishap.”

A total of 125 people in the building were killed as well as all 64 people on the airplane. Because of the renovation (part of a 12-year upgrade for the entire building) the area was only about 20 percent occupied at the time of the attack.

“It could have been in the other side of the building,” he says. “I think everyone in the building and throughout the world thought about the what ifs and what was going to happen. It affected a lot of people who had friends and relatives (inside the building). We’re just fortunate. It could have been worse and for some it was the ultimate sacrifice.”

They actually opened the shop the next day at the request of then Secretary of State Donald Rumsfeld but it quickly became obvious the store and building couldn’t function as if it were a normal day.

“The building was still on fire before we opened by 8 a.m. We were told to close down.”

One of the personal connections he had to someone who died in the attack was with TV commentator and attorney Barbara Olsen, (who was on the plane that crashed into the Pentagon). He met Olsen a couple of times through a friend who published some of her books. With a few others, he says he recognizes them as customers.

“There are familiar faces that you would remember who might have come in,” he says. “Face recognition was the most important thing and there were a handful that I recognized.”

Needless to say while David Mann Jeweler is a typical jewelry store, there are some unusual aspects to having a business that serves, almost exclusively, Department of Defense officials and contractors. First are the days and hours of operation. Store hours are from 8 a.m. to 5 p.m. Monday through Friday. The shop is closed on weekends and holidays and there are no evening hours. He and his brother begin work at 6:30 a.m. each weekday.

“If you average it all out with a seven-day operation or a six-day operation, (the hours) will equal out,” he says. “You have the benefits of three-day weekend holidays and some not so good benefits. When Christmas falls on a Monday, my last business day is on Friday. For two full days we’re closed. You’ve got to make hay when the sun shines.”

Security has tightened over the years, even before the attack. He used to be able to serve customers who did not have a relationship with the Pentagon, but that gradually ended. Now it is very difficult, only possible with an escort service. However, he does have some impressive clientele, including the past two secretaries of defense (Rumsfeld and Robert Gates).

“Rumsfeld was in the store five days after 9/11,” he says, “a very, very nice gentleman and very well-respected in the building. You just never know who might come in.”

Since the attacks, activity in the Pentagon increased as one would expect during a time of war and security is even tighter. Another change is the store was renovated and relocated to a new space in the concourse. It was the final stage of the long-term renovation program, prior to 9/11. All of these changes were anticipated. However, there has been one unexpected change since the attacks: the level of business for Valentine’s Day.

“A lot of jewelers when it comes to Valentine’s Day, it’s not a big day,” he says. “After 9-11 we call it a mini-Christmas.”

Brian says it’s obvious why the first couple of Valentine’s Days after the attacks were busy but buying jewelry for loved ones on this romantic holiday has morphed into a sort of tradition at the Pentagon.

“I can’t say for sure why, but other than Christmas it’s our busiest day depending upon how the calendar falls,” he says. “We’ve been very fortunate that love is in the air in the Pentagon.”

Benches at Pentagon Memorial. Photo credit: VeloBusDriver via Flickr

 
September 11 happens to fall on a Sunday this year, an off day for Brian Mann and that’s just fine with him. He says after 10 years he would rather spend the day as usually does.

“The Pentagon was the first one to have a memorial outside. I’m sure they’ll be things going on that day for the people who want to observe and I’m sure that’s what they will be doing. I’ll certainly think about it but ten years has past and life goes on,” he says. “Let everyone remember in their own way on a very nice Sunday.”

This story also appears on Forbes.com.

Signet Replaces CEO for UK Division

Signet Jewelers said Tuesday that Rob Anderson, CEO of Signet's UK division, will leave the company at the end of July. He will be replaced by Sebastian Hobbs who has been promoted to the new position of managing director for the UK division, effective immediately. Hobbs will report to Mike Barnes, Signet CEO.

The Bermuda-based company is the largest specialty retail jeweler in the US and UK with approximately 1,952 stores (1,449 in the US and 503 in the UK). Its retail chains in the US include Kay, Jared and Ultra Diamonds. In the UK, it owns and operates the H.Samuel and Ernest Jones jewelry chains.

“Seb has made important contributions to our UK division and we believe his experience in UK retailing and strategy make him a perfect fit for this role,” Barnes said.

Hobbs joined Signet's UK division as commercial director in March 2011. From November 2006 till March 2011, he was commercial director of Blacks Leisure Group. Prior to this, he was trading controller for WH Smith, a retail consultant for KPMG, and held management positions at Mothercare and British Home Stores.

Signet’s UK division has been struggling since the financial crisis. In its 2013 fiscal year, the division reported that sales fell 0.8 percent to $709.5 million. Same store sales increased 0.3 percent compared to an increase of 0.9 percent in Fiscal 2012. Sales performance was primarily attributed to lower traffic particularly in the fourth quarter.

By contrast, US division sales for the 2013 fiscal year increased 7.9 percent to $3.27 billion. Same store sales increased 4 percent for the year compared to an increase of 11.1 percent in Fiscal 2012.

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