Monday, March 24, 2008

Luxe Industry News

Lot's of business news today from Women's Wear Daily.

Tiffany's 4th quarter profits down 15.8% or 89 cents per share due to special charges including a bad loan to Tahera Diamonds, while US sales were up 4% and international sales were up 21%. Overall profits for last year were up 19.6% or $2.40 per share.
This year, the company expects “robust” growth outside of the U.S. and Japan, with overall earnings of $2.75 to $2.85 a diluted share.

Also, Wall St. Cutbacks Could Weigh on Luxe with layoffs in all the major firms and lowered bonus payouts next December. Luckily for the luxury market the dollar is low.
For now, weakness in the luxury market Stateside is being delayed by an influx of foreign shoppers. "It's definitely being offset to some the fact that the dollar's so weak and there's been so much international visitation to the U.S., and especially New York," said DiNatale.
As stores look out over the horizon, perhaps seeing the storm clouds of more declines, they might choose to pull back on their orders. "The fallout from the macro climate definitely is going to impact wholesale because stores are looking at it and they're going to plan their budgets," said Jeffry Aronsson, former ceo of Donna Karan International and Marc Jacobs, who now runs his own luxury investment firm. "If it's a big company that in effect has been betting on its future or has analysts on the Street that they have to please, they're going to be under pressure."

Diamond Industry Braces for Challenging Times with the decentralization of the industry and end of the control of diamond distribution from London.
"Because there is much more awareness of building demand and catering to demand rather than just producing diamonds and then selling them into the market, it can be summed up that the diamond industry is changing from a supply-driven model to a demand-driven model," said Jeffrey Fischer, president of the International Diamond Manufacturers Association. He added that control in the industry is becoming decentralized, with countries like Russia and Canada taking charge of their own distributions.
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