Fourth Quarter Profits of Tiffany Hit by Hong Kong Protests
Recently, American luxury jewellery brand Tiffany & Co. announced that it has already met the analysts’ expectations of the quarter, but revenues were not met due to the ongoing protests in Hong Kong. The report specifies how luxury jewellery sales have dropped and tourists have not spent much in the U.S.
Tiffany has also maintained its outlook for the whole year that lowered earlier.
The strength of Chinese citizens arriving in the United States has undergone a reduction of nearly three percent in 2019. This is due to the U.S.- China trade war, stricter U.S. visa approval process and a strong dollar. The American retailers who are reliant on the high spending tourists are feeling the heat created by the protests. Various challenges are creating hurdles in their way.
In the afternoon trading, Tiffany’s shares were up at $85.42.
Due to the prolonged protests in Hong Kong, Tiffany’s stores unexpectedly remained closed for six days. The company had a recent discussion with the analysts which revealed that if the crisis continues or the situation aggravates, full-year sales and earnings could come in at the lower end of forecasts.
Being the fourth-largest market of Tiffany, the Hong Kong protests have largely affected Tiffany sales just like the sales of Switzerland based, Richemont were affected.
Chief Executive Alessandro Bogliolo told Reuters, “There is little we can do on tourist slows around the world so our way to react to this is to continue to be more active locally, domestically in China where customers are.”
As per the news by Tiffany, its expenses have fallen by five percent in the quarter. The jewellery store expects to spend more in marketing in the later part of the year to attract more number of customers. They claim to renovate their flagship shop in Manhattan soon. In the last quarter, they suspended most of their digital marketing as it overhauled its websites.
Recently, fresh collection has been introduced in all the outlets of the luxury brand. This collection comprises of affordable items like pendants and earrings to attract the millennials, who earlier preferred Tiffany’s competitors including Denmark’s Pandora A/S and Signet Jewellers.
Bogliolo announced that in the current quarter the company did not launch many products. In 2018, Tiffany released Paper Flowers, its floral jewellery collection made of reasonable platinum and diamonds.
As per the recent reports, sales in America fell by four percent to $455 million, whereas revenue in Asia Pacific dropped one percent to $298 million. The firm has confirmed that the “meaningful disruption” in Hong Kong has had a pessimistic impact on the regional sales. The recent protests have led to the shutdown of airports in the previous week.
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