Popular Jewelry Maker Posted Slumping Sales
Because of the ongoing recession which forces people to stop buying dispensable and luxury products such as jewelry, popular jewelry maker Tiffany has posted 75 percent decline of sales in the fourth-quarter of 2008. To keep its finances afloat, the company said it will reduce its workforce up to 10 percent before the year ends.
Popular jewelry maker Tiffany & Co. posted a 75 percent decline of profit during the fourth-quarter of 2008 as more consumers preferred low-priced items over expensive, luxury products amid economic recession.
Fourth-quarter sales declined by 20 percent to $841.2 million from $1.05 billion in 2007. Despite these massive losses, the result is better than the previous prediction of Wall Street.
According to Tiffany, the company’s sales were also affected by other competitors which offer cheaper jewelries and big discounts to consumers. Meanwhile, the company said it will not lower its prices to maintain the same quality standard it boasts for many decades.
To keep its finances afloat, the jewelry maker has recently provided an early retirement to more than 600 of its employees. Meanwhile, the company announced it will reduce its workforce up to 10 percent that is expected to save more than $60 million before the year ends.
Engagement ring, which used to account for the biggest sales of Tiffany, has experienced low demand for the past couple of months in the US. Meanwhile, the demand for charm jewelries continues to remain strong despite recession.
Meanwhile, the Jewelry maker’s iconic store on Fifth Avenue in New York posted a 34 percent dropped in sales. Also popular among local and foreign visitors, this store accounts for more than 10 percent of Tiffany’s gross profit.
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