Tiffany seeks U.S. job cuts, sees charges in Q4
NEW YORK (Reuters) - Tiffany & Co (TIF.N) offered voluntary retirement incentives to about 800 U.S. employees, as the upscale jeweler grapples with an economic downturn that has led its affluent customers to cut spending.
Tiffany, which revealed the details of job reductions it first announced on November 26, said in a regulatory filing on Tuesday that it expects to record a pretax, nonrecurring charge of $50 million to $65 million in the fourth quarter of fiscal 2008 because of the incentives.
The 800 who were offered the incentives work over a range of Tiffany's divisions and make up roughly 13 percent of its U.S. staff. Tiffany has a little over 6,000 employees in the United States, a company spokesman said.
The final charge will depend on the number of eligible employees who take up the offer, Tiffany said, warning that it could take additional charges after management finalizes its plan for further adjustments by the end of the fourth quarter.
The incentive includes "increased age and service credit for pension purposes, severance payments, enhanced retirement health care benefits and accelerated vesting and extended exercise rights for equity grants now outstanding," Tiffany said in a U.S. Securities and Exchange Commission filing.
In late November, Tiffany slashed its full-year forecast and trimmed its 2009 store growth plans, puncturing hopes that it was more immune to the global economic slowdown than other retailers. It was also a sign that its affluent consumer base was being hurt by the global financial crisis.
At that time, Tiffany Chief Executive Michael Kowalski said it was impossible to say when consumer confidence would be restored.
The company expects full-year earnings of $2.30 to $2.50 a share, down from a prior view of $2.82 to $2.92 a share.
The charges tied to the retirement incentive were not included in the full-year forecast, Tiffany said.
Its shares closed up 86 cents, or 4.8 percent, at $18.84 on the New York Stock Exchange.
(Reporting by Aarthi Sivaraman, editing by Matthew Lewis, Gary Hill)
