* Store count to rise as much as 8 pct/year
* Operating margins could match record 2007 levels
* Shares down 1.5 percent in late morning trading
(Adds details on market share, Japan, byline, updates shares)
By Phil Wahba
NEW YORK, March 24 Tiffany & Co (TIF.N) aims to
increase its store count by as much as 8 percent per year for
the "foreseeable future," and the upscale jeweler's operating
margins could again hit all-time highs reached in 2007, Chief
Executive Michael Kowalski said on Wednesday.
Tiffany, which on Monday reported strong holiday results,
can "ultimately double its stores in the U.S. and Europe,"
Kowalski said at an investor conference that was broadcast over
The company operated 220 stores worldwide as of Jan. 31,
2010 and said on Monday it planned to open another 17 locations
this year. [ID:nN22185211]
While Tiffany reported a fourth-quarter profit that was
nearly five times greater than a year earlier, the company's
margins took a slight hit because of higher diamond and
precious metals costs.
Its operating profit margins in 2009 were 16.3 percent.
Kowalski said that matching an all time high of 19.6 percent
reached in 2007, before a financial crisis and recession
severely curbed the luxury market, was "well within reach" if
its sales growth continues.
Sales at Tiffany stores open at least a year rose 11
percent in the United States during the quarter that included
Black Friday and the Christmas shopping season, which accounts
for about 40 percent of overall jewelry sales.
One trouble spot is Japan, where Tiffany operates 57 stores
and where sales fell 9 percent during the holiday quarter.
Kowalski said he expects sales there to be weak over the
UP FOR GRABS
Kowalski said the distress in the jewelry industry last
year had left an opening for Tiffany to win market share from
rivals and that his plan to raise marketing spending this year
was directly aimed at a new set of shoppers.
"There are many orphaned customers out there looking for a
new relationship," Kowalski said.
Tiffany and downmarket rivals such as Signet Jewelers Ltd
(SIG.N) SIG.L and Zale Corp ZLC.N have gotten some relief
from competitive pressures after a number of jewelers,
including Fortunoff and Finlay Enterprises, went bankrupt last
A report by Citigroup, which hosted the investor
conference, found that between 5 percent and 10 percent of the
U.S. jewelry market was now "up for grabs" following those
Tiffany shares were down 70 cents, or 1.5 percent, at
$47.06 in morning trading on the New York Stock Exchange.
(Reporting by Phil Wahba, editing by Dave Zimmerman)