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Tiffany Eyes Better In-Store Experience and Global Footage Increase

RAPAPORT… Tiffany & Co. wants to enhance its customers’ in-store experience by improving client service and increasing store space by 2-3 percent per year, a senior executive of the luxury jeweler told a recent investor in New York.

Ralph Nicoletti, executive vice president and chief financial officer, also said Tiffany aimed for mid to high single-digit sales growth, improved operating margins and doubled earnings growth “over the long-term.”

Tiffany opened new stores in 2014 in Moscow and on the Champs-Élysées in Paris and this year opened locations in the Miami Design District and Shanghai. The planned annual increase in global footage was “for the foreseeable future,” according to Nicoletti.  The retailer opened 11 new stores in the 12 months ending July 31, 2015, with 304 in operation.

Speaking at the Stifel 2015 Consumer Conference last week, the executive said Tiffany’s T collection, introduced in 2014, had shown strong appeal globally among both self-purchasers and gift givers and that the company had “many opportunities to refresh and reinterpret existing iconic collections with new designs”.

He also stressed the importance of “vertical integration” with its supply chain and said the company now manufactures internally more than half of the products it sells and sources a “high percentage” of its diamond requirements in a rough form from producers. He added that “most important to us is the security of the supply and ethical sourcing”.

The luxury seller is also introducing extensions of its existing Victorian and Bow fine jewelry, and fashion silver jewelry priced below $500 in its Infinity and Return to Tiffany collections. This year saw it introduce its CT60 watch collection, which Nicoletti said “will ultimately be an important adjacent category”.

The company reported flat sales of $991 million for the second quarter of 2015, with profit down 16 percent to $105 million and comp store sales up 7 percent.

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