Tiffany: Case Study
The jewelry and luxury goods company Tiffany and Co. is one of the world's most famous companies, immortalized in the film Breakfast at Tiffany's. It has shown robust growth in recent months, rebounding nicely after the recent credit crisis. Tiffany's and the luxury, high-end market also recovered quickly after the recession of 2001. Luxury consumers tend to be less impacted by economic downturns than middle and lower-class consumers (Blackburn 2004). More of high-end consumers' income is derived from diversified investments and they are less dependent upon a weekly paycheck. While high-end consumers may curtail their spending if their investment income has decreased, few are so negatively impacted by the economy that they feel forced to cut out all luxuries from their budget. Furthermore, jewelry is viewed as an investment, rather than as a frivolity. And, in Tiffany's favor, the upper echelon of the market has grown wealthier and more concentrated, and increased purchasing power of wealthy consumers means increased sales for Tiffany's. "The jewelry sector is the largest in the luxury goods industry with global retail sales amounting to $150 billion" (Blackburn 2004)
In 2010, Tiffany's sales in the Americas increased 15%; U.S. store sales increased 12% and in New York alone Tiffany's sales boasted a 20% increase. Internet and catalog sales in the U.S. increased 17%. Sales in the Asia-Pacific region increased 11%. Sales in Europe increased 30% (Tiffany's holiday season sales increase, 2011. Investors: Tiffany Website). Tiffany rebounded more quickly from 2008 than its primary competitors Bulgari and Cartier, given that it tends to attract older...
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