Tags: Tiffany | TIF | SWGAY | LVMUY

Tiffany & Co. Vaults Ahead, Despite Economy

Monday, 03 Oct 2011 03:11 PM

By Meghan Sapp

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
Times are hard for everyone in this global economic mess. Well, not everyone it seems. The world’s second-largest jeweler, Tiffany & Co. (TIF), has managed to increase net sales by a quarter during the first half of the year and show no signs of slowing down.

In fact, since the end of the recession in the United States in 2009, the market value of TIF has tripled to $8.5 billion. Its stock price was up more than 166 percent in the period through mid-September. The biggest growth in Tiffany’s American sales segment during the second quarter was among products valued at more than $20,000 and at more than $50,000.

What this means is that rich people will always be rich, no matter the economy, and Tiffany has brand recognition that they reach for. That brand strength has gone global in recent years with domestic and international sales now roughly equal. Tourism sales, especially in flagship department stores, are especially strong, with Chinese tourists seeking out Tiffany diamonds on European shopping trips.

Serious Chinese shoppers won’t have to wait for trips to Europe for long. The company plans to have 25 to 30 new stores there in the next three years or so, according to the China Daily newspaper. There are currently two stores in Beijing. In a nod to its roots in New York City, the company will open its third New York City store in Soho in 2012 to celebrate its 175th anniversary.

Premium pricing

It’s not just the Chinese who are keen on Tiffany, however. After ending a joint venture with Swatch (SWGAY) to develop and market Tiffany watches, there are rumors that some luxury goods players are interested in snatching Tiffany up. LVMH Moet Hennessy Louis Vuitton (LVMUY) is the name most often tossed around, not surprising considering its current bid to buy up jeweler Bulgari for $5.2 billion.

If Louis Vuitton wants to add Tiffany to its global lineup of luxury goods, it’s going to have to shell out a lot of cash. Analysts estimate that a buyer would have to pay a premium between 30 and 40 percent in order to satisfy current investors’ demands for a company that is set to grow by 30 percent in the next handful of years alone. That would put a valuation on the company anywhere between $11 billion and $13 billion.

Goldman Sachs recently raised estimates and its price target on Neutral-rated Tiffany & Co. to $72 from $67 following better than expected second quarter results.

Tiffany’s reports its third quarter earnings on or around Nov. 29.

© 2014 Moneynews. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Crackdown on Apple in Ireland Opens Front in Tax Avoidance War

Tuesday, 30 Sep 2014 18:41 PM

The European Commission's crackdown on the deal between Irish tax authorities and Apple Inc. marks an expansion in the g . . .

Murdoch's News Corp. to Buy Parent of Realtor.Com for $950 Million

Tuesday, 30 Sep 2014 10:07 AM

News Corp. is spending about $950 million to buy the online real estate business Move Inc. in a deal that aims to speed  . . .

Yahoo Investors Stand to Reap $11 Billion From Possible Breakup

Tuesday, 30 Sep 2014 11:29 AM

Yahoo! Inc. shareholders are inching closer to a potential $11 billion windfall, as activist fund Starboard Value steps  . . .

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved