BOSTON (Reuters) – Tiffany & Co is sending more of its priciest jewelry to mainland China to reach consumers kept at home by a weak currency, Chief Executive Alessandro Bogliolo said on Thursday.
FILE PHOTO: A Tiffany & Co store is seen on 5th Ave in New York, New York, U.S., March 19, 2019. REUTERS/Carlo Allegri/File Photo
“We follow our customers where they shop,” Bogliolo said in an interview.
A lower domestic sales tax has also contributed to double-digit decreases in sales to Chinese tourists in the United States and in other destinations, he said, reflecting an effort by China’s government to “repatriate consumption” by its citizens.
Bogliolo spoke after a luncheon put on by Boston College’s Carroll School of Management. Among the inventory moved abroad, he said, has been high-end jewelry like diamond necklaces valued at $1 million and up. In the past, more of these types of pieces were purchased by wealthy Chinese travelers in New York or Paris, he said.
Tiffany (TIF.N) shares were trading around $89 each on Thursday, well below the closing high of $139.50 they reached in July 2018. New York-based Tiffany is among a group of luxury brands grappling with the U.S.-China trade war, along with lost business due to the protests that have rocked Hong Kong since summer, forcing malls to shut.
The protests have led to a rising number of store closings in the Chinese-controlled territory, Bogliolo said, without giving a precise figure. “We hope for a positive resolution of the protests, but it’s not improving at all,” he said.
Hong Kong accounts for up to 10% of the estimated $285 billion annual global market for luxury goods. Other brands under pressure include Swatch Group, (UHR.S) Cartier-owner Richemont (CFR.S) and France’s Hermes. (HRMS.PA)
In their ongoing trade war, Washington and Beijing have levied punitive duties on hundreds of billions of dollars of each other’s goods, roiling financial markets and threatening global growth.
Bogliolo said he could not forecast how long tensions might continue but said he aimed to “act on what is in our control.”
The company last month opened an exhibit of its jewelry at Shanghai’s Fosun Foundation, for instance, and Bogliolo said he wants to avoid charging Chinese consumers extra to cover the costs of tariffs on jewelry it imports into the country.
Reporting by Ross Kerber in Boston; Editing by David Gregorio