Tiffany & Co. is venturing to launch more specialty shops in China and make the most of the country's faltering currency that has somehow limited the Chinese' spending power abroad.
A weak yuan forces Chinese shoppers to instead shift their preference of spending overseas and indulge in luxury shopping in their own soil. This is where Tiffany & Co wants to capitalize on.
On Thursday's Bloomberg interview in Shanghai, Tiffany & Co. chief executive officer Alessandro Bogliogo said that a disruption in the country's currency flow has had a significant impact on the "intention of the Chinese to buy abroad," pointing out that the company has "seen a huge increase in sales in mainland China."
Bogliolo said they are seriously looking into opening more branches in the country's mainland. Specifically, Tiffany wants a shop right at the heart of the capital city's airport in the next few weeks.
The luxury jeweler wants to make its main shop in Shanghai as its most valuable branch in the world, next to its famed New York City outlet, the CEO said.
Double-digit profits of the company in the Chinese market provided a big motivation for the US jewelry authority to expand its global presence.
The jewelry retail giant's sales output in the first six months showed impressive growth in China, however weak sales in Hong Kong and mixed profits in other locations in the region are noted.
Market segments that range from travel and tourism to luxury products that leaned largely on China's foreign spending are not as upbeat as the Chinese currency drops and the ongoing economic issues between US and China puts a burden on market conditions.
In Japan, Tiffany's total sales of $155 million remained firm in the first half but shed 2 percent to $300 million in next quarter with comparable sales slowing 1 percent and 2 percent, respectively.
GlobalData Retail executive Neil Saunders said that after taking into consideration Tiffany's robust prior-year figures, the total output showed a marked slowdown from the kind of improvement it wants to attain a few quarters earlier.
Meanwhile, the jewelry retailer's sales in the US to foreign tourists were down by over 24% in the last quarter, even before Chinese tourism officials issued a travel advisory in June against visiting the US.
According to Bogliogo, to keep their prices competitive, Tiffany will also abide by the new taxes on its US-made jewelry array and exported to China, instead of just passing the increases on to their clients.
