See full article in todays WSJ. This is growth engine I have been waiting for. I'm in and adding on dips, and confirmation of traction.
The jeweler is launching an expansive collection of handbags, ranging from clutches to totes to satchels, in a dozen of its U.S. stores on Sept. 1. Every piece bears an element of Tiffany's signature robin's egg blue, whether on a clasp, in a lining or all over a dyed-crocodile purse. Prices for women's handbags start at $395 for a small suede tote and rocket up to $17,500 for a large crocodile handbag.
Handbags have enjoyed sparkling sales in recent years and are in some ways easier for a retailer to move: Women are more likely to splurge on bags for themselves than on jewelry. "Unlike jewelry, which sometimes feels extravagant, handbags always serve a purpose," says John Long, a retail strategist with consultancy Kurt Salmon Associates.
And next week, we will launch the very enticing collection of leather handbags and accessories in select US stores and online. Perhaps, you have seen some of the favorable media coverage it has recently received. In addition, we have been very pleased with initial customer response to other new designs like Paloma Picasso’s new Marrakesh jewelry, and the Tiffany Garden collection, which combines diamonds and colorful gemstones based on designs in the Tiffany & Co. archives.
We have been expanding our very successful Keys, Charms, and Return to Tiffany collections. As we said, we are pleased with customer response to new watches in our stores, and we look forward to a significant expansion of wholesale distribution. To build awareness of our new products and stores, we’re spending more on marketing communications this year in absolute terms, and as a percentage of sales. It will be a significant step up in marketing spending in the third quarter, some of which will be tied to our hosting of major customer and media event in Beijing. In fact, we noted in today’s news release that the rate of earnings growth in the third quarter will be somewhat restrained by that increased marketing spending. But we believe the long-term benefits to the brand will far outweigh the short term cost.
We have produced good results in the first half of 2010, and are looking to the back half with a sense of guarded optimism to quote Mike Kowalski in today’s news release. We are almost one month into the third quarter, and are pleased to say that our consolidated worldwide sales growth has accelerated from the second quarter rate, and is currently increasing at a low double-digit percentage pace, with some variations by region.