NEW YORK (MarketWatch) — Tiffany Co. said Tuesday it plans to close its five-year-old pearl-jewelry chain Iridesse as the luxury retailer grapples with upscale shoppers cutting back in the face of recession.
The 16-store mall-based chain hasn’t met the company’s
financial objectives, New York-based Tiffany spokesman Mark Aaron said in an interview.
An Iridesse store averages about 1,400-to-1,500 square feet in size compared with a U.S. Tiffany store, which averages 7,000 square feet. While Tiffany’s pearl jewelry can cost tens of thousands of dollars to hundreds of thousands of dollars, an Iridesse piece can range from $100 to several thousands of dollars, Aaron said. Tiffany operates 206 stores in 21 countries under its namesake label.
“Combined with the tough economic environment, we just felt it’s not prudent to put more resources into it,” Aaron said. “It might have been a viable concept in a better retail environment.”
Aaron said the exact date for the store closings has yet to be determined. He also said the company has yet to decide whether to convert some of the stores to its smaller-sized Tiffany stores, which average 2,000 square feet in size.
Like other luxury retailers from Saks Inc.
to Bloomingdale’s parent Macy’s Inc.
Tiffany has been hurt by luxury shoppers paring back in the face of a volatile stock market, rising job losses and gloomy economic reports. It’s also been hurt by its exposure to the New York markets as the city bore the front of the job losses and declining bonuses from the financial industry.
Tiffany has cut costs including offering voluntary retirement to some of its staff. In January, it posted a 21% drop in holiday sales and again lowered its full-year forecast range. Tiffany will release its fourth-quarter results March 23.
Tiffany shares rose 7.8% to $18.26.
View more information: https://www.marketwatch.com/story/tiffany-plans-shut-iridesse-jewelry-chain