The economy- groan. Last week, consumer confidence fell to an all time low (WWD), and not surprisingly, retail took a hit, too.
Poor performers include: Talbots- down 13.3%, Tiffany & Co- down 11.2%, and Macy’s, Saks and Nordstrom, which all fell more than 4% as well.
A slow in consumer spending is partially to blame for lackluster profits. Unimpressive holiday sales also have not helped the bottom line for reatailers.
WWD targets Tiffany in an article today, highlighting the fact that not even the luxury sector is unaffected by the current market conditions. Despite the steep drop in stock price at the closing bell last week, Tiffany remains confident that ‘08 will be a good year for the brand. Recently, Tiffany announced its new partnership with Swiss watchmaker, Swatch. Tiffany plans on aggressive moves this year, as it will open new specialty watch stores and expand the line of products with the help of its strategic alliance partner, Swatch.
It’s going to be a tough fianancial year for the U.S., and it looks as though retail is struggling alongside American consumers.
3 responses so far ↓
1 Alex@Barf // Jan 15, 2008 at 8:49 am
I am really curious to see how this year and next plays out for Tiffany & Co. First the Swatch alliance and then the planned opening of Tiffany Collection (correct name?) stores that will specialize more budget-friendly Tiffany items.
Budget and Tiffany? Yikes! It reminds me of the massive expansion through licensing and subsequent loss of sole that Gucci went through before Tom Ford came along to save the brand (and the day, and fashion?).
There is a ton of money to be made in going mass (for example, you might pick up some of those would-be counterfeit buyers by having items at their price point) but is it good for the brand in the long run? Is Tiffany thinking in decades or in quarterly earnings?
Quarterly earnings blur judgment.
2 European Retail Begins to Sing the Familiar Blues in Chorus with U.S. // Jan 15, 2008 at 5:49 pm
[…] October 2007 ← Retail Slumps as U.S. Economy Slowly Dips […]
3 Virginia Lumpkin // Jan 15, 2008 at 5:55 pm
Much agreed, Alexis. Quarterly earnings are a source of many errors in judgment. However, it is a difficult game to please all the player involved!
I am still totally fascinated by the teaming up with Swatch, and I’m very interested to see what comes out of the partnership.
Leave a Comment