Tiffany hopes to ride out Wall Street storms

NEW YORK (Reuters) - Stock market experts say trying to time a market perfectly is a fool's game: Picking a perfect bottom to buy something or a perfect top to sell never pays off.

Upscale jeweler Tiffany & Co (TIF.N) is betting its decision to open a fancy new store on Wall Street in lower Manhattan will pay off in the long-term, despite a newfound thriftiness among bankers, traders and other market players.

Tiffany's Wall Street store -- a stone's throw from the New York Stock Exchange -- has not gotten off to the greatest start. Its first months have coincided with a market slump that has rocked banks, cost thousands of jobs and created anxiety throughout the financial industry.

"I suppose that looking back a couple of years from now, we might say 'Yeah, the timing wasn't perfect for that store,'" said Edward Jones analyst Stephanie Hoff.

"But I think strategically it still makes sense ... when you look at Tiffany, its growth profile and its ability to drive Wall Street into its stores."

Indeed, times are tough on Wall Street.

The turmoil of financial markets has left many bankers with uncertain futures, or worse, without jobs, and many of those who are still employed face lower bonuses.

Tiffany's new store, aiming to be as close as possible to Wall Street's legion of high earners and residents of downtown Manhattan, opened last October.

"Of course the timing wasn't the best," said Pam Danziger, president of market research firm Unity Marketing. "Tiffany focuses on luxury consumers and being on Wall Street, their target market is the Wall Street types who are taking a hit."

Given the time and investment that go into opening a new store, it would have been costly for Tiffany, which has a 20-year lease for the Wall Street location, to alter its plans.

"You certainly can't just say 'Oh well, the economy looks like it might be turning down and therefore we are not going to open our store,'" Hoff said. "They have to think longer term."

MORE CONSERVATIVE SHOPPERS

The Tiffany shop boasts 12-foot glass walls, jewelry displays on two levels and a staircase made of marble, glass and stainless steel.

In November, spokesman Mark Aaron said the store, "has had a very good start."

But weak sales at Tiffany's established stores, much like at other jewelry retailers over the holidays, have left the jeweler wary about U.S. sales for the first half of the current fiscal year -- mere months after the Wall Street store opened.

On a recent Friday afternoon, the shop was mostly empty, with only a handful of people browsing through the jewelry displays.

James Hawthorne, manager at the Thomas Pink store a short walk from Tiffany, said he too had noted that Wall Street's spending seemed down. Thomas Pink, a high-end shirt maker, is owned by luxury goods group LVMH (LVMH.PA).

While pointing out that he expects the slump to be temporary, Hawthorne said "a lot of these guys" (bankers) were not shopping at lunch time anymore.

"They don't want to be seen coming and shopping at lunch because of the overall seriousness of what's going on in (Wall) Street," he said.

Some were spending more cautiously, Hawthorne added.

Pali Capital analyst Stacey Widlitz agreed. "Right now, some consumers are being more conservative and buying $500 bracelets instead of a $1,000 bracelet," she said.

Tiffany's Aaron acknowledged the trouble on Wall Street, saying the company had never claimed it was recession proof.

A BETTER FUTURE

While it is not exactly a sparkling time for domestic jewelry sales, Tiffany will recover quickly, said Doug Fleener, president and managing partner of retail consulting firm Dynamic Experiences Group.

"They will be the first to bounce back," Fleener said, comparing it with other jewelers. "Right now, Wall Street is just waiting for some good news."

Tiffany's fabled name, its appeal to tourists, a good product range and focus on expansion all bode well for the jeweler, industry experts and analysts said.

Another long-term boost for the Wall Street location will be the Freedom Tower, due to be completed in 2012, said Thomas Pink's Hawthorne and Joanne Podell, executive director for Cushman & Wakefield's retail services.

"In a few years when everything is sorted out and (the new) World Trade Center is up ... you are going to see a huge community there," Podell said.

(Reporting by Aarthi Sivaraman and Steve Orlofsky)