Tiffany&Co Annual Report
Tiffany & Co, home office at New York City, is a luxury American multinational jewelry and silverware corporation with over 8,000 employees. They produce jewelry, sterling silver, china, crystal, stationery, fragrances, and watches. But it is well-known for its luxury goods, like diamonds: diamond jewelry and especially its diamond engagement rings. Tiffany has more than 200 retail stores all over the world and they also sell their products through direct-mail (catalogue), corporate merchandising and wholesale to third-party distributors. As the major jewelry producer in the world, Tiffany has kept increasing their sales in the whole jewelry market, leading this domain for almost 10 years. Michael J. Kowalski, the CEO of Tiffany&Co Inc., has made a new announcement in Tiffany’s annual report that Tiffany achieved record financial results in the year ended January 31, 2012 (“fiscal 2011”). Net sales rose 18% and net earnings increased 19%, surpassing the goals they had set at the start of the year. (Tiffany Annual Report 2011)
Industry Situation and Company Plans
Nowadays, luxury jewelry market is controlled by three leading companies, Cartier, Bulgari and Tiffany. Although Tiffany always keeps the stable percentage in the market share, it has to pay more attention to the challenge from the industry itself. Under current jewelry industry, the gross margin of silver products become fewer and fewer because people do not want to pay on the silverware as much as they used to pay. Golden is their new favorite. So, for Tiffany whose key products are silver jewelry and accessories, they need a new plan to reorganize their silver product lines. Moreover, the production of diamond is far way difficult than before. According to the CEO Michael, the yields of diamond around the world have continuously decreased in the past 5 years. The Diamond, as Tiffany’s core products, is so scarce that it may be the most painful headache...
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