17 Mar Trump Tower is hammering Tiffany’s sales on Fifth Avenue
Trump Tower’s shadow is snatching the sparkle from its bauble-hawking neighbor.
Sales at Tiffany’s flagship — located next door to the president’s security-barricaded residence on Fifth Avenue — tumbled 7 percent in the fourth quarter, the jeweler revealed Friday.
The troubling trend shows no signs of improving anytime soon, execs griped on an earnings call with analysts.
Interim CEO Michael Kowalski said Tiffany is working with the “Secret Service and NYPD to maximize access to the store and minimize disruption” as a maze of police barriers and around-the-clock cop stakeouts are expected to bedevil the block for the foreseeable future.
Even so, Kowalski conceded that the flagship’s traffic troubles are “largely beyond our control” and stopped short of calling for an improvement this year.
Signaling that it’s feeling boxed in, Tiffany likewise admitted it’s now studying how to make better use of its other stores in the Big Apple.
Some of the hubbub around Trump Tower has died down now that the president is spending most of his time at the White House. But management said it’s still not yet sure what lies ahead.
We “plan somewhat cautiously for the New York store for 2017, but were not going to share our assumptions for you on that,” Mark Aaron, vice-president of investor relations said.
The flagship’s fourth-quarter sales drop might have been doubly bad if not for “some large transactions in January,” Aaron said. The store’s holiday sales plummeted 14 percent.
Tiffany's on Fifth Ave turns Trump Tower security into ad space
Tiffany & Co. is making the best of the heightened…
The diamond retailer had complained of dwindling foot traffic at its famed location soon after President Trump’s election win in November.
Even draping some of the security barricades in front of Trump Tower in Tiffany’s signature robin’s-egg blue did little to lure shoppers inside.
Meanwhile on the call, Kowalski spoke briefly of Tiffany’s search for his successor.
“We assume it may take time to find the right person with broad experience and broad management with global experience,” Kowalski said.
Now-former CEO Frederic Cumenal abruptly stepped down from his post in early February. Since then, Tiffany reached an agreement with New York hedge fund Jana Partners to allow three new appointees on Tiffany’s board, including former Bulgari CEO Francesco Trapani.
Jana and Trapani own a total of 5.1 percent of Tiffany and will be helping the company in its CEO search.
Tiffany’s fourth quarter results of adjusted earnings of $1.45 a share on $1.23 billion in revenue beat analyst estimates of $1.38 a share on $1.22 billion in revenue.
Globally, Tiffany’s sales were helped by increasing demand in the Asia-Pacific region. Full year sales in Japan grew 12 percent to $604 million, while elsewhere in the region, total sales grew 1 percent to $1 billion.
Shares of Tiffany were up 3 percent at $92.73 in Friday afternoon trades.