Tiffany has major e-commerce expansion plans for Europe

Tiffany & Co. has major plans to build up its Internet base in Europe, CEO Michael Kowalski told Wall Street analysts Monday on the jewelry retailer’s year-end earnings call.

Tiffany, No. 107 in the Internet Retailer Top 500 Guide, already sells online to customers in Great Britain, Wales, Northern Ireland and Scotland through Tiffany.com/UK. But in 2010 the jewelry retailer will expand to other parts of Europe, although the retailer has not said which countries it is targeting.

“E-commerce has proven to be very successful and an efficient complement to our retail stores in the U.S., the United Kingdom, Canada, Japan and Australia,” Kowalski told analysts. “In fact our total Internet sales in those five countries accounted for approximately 6% of Tiffany’s worldwide sales in 2009. We will further expand Tiffany’s Internet reach this year when we launch e-commerce in continental Europe, scheduled for mid-year.”

Tiffany will also diversify its online product inventory with a new line of bags and related accessories, Kowalski said. “We will move forward with a new collection of leather handbags and accessories that have been designed by Richard Lamberton and John Truex,” Kowalski told analysts. “It will debut this year with distribution limited to a small number of our U.S. stores as well as Tiffany.com. Our company has become increasingly global over the years and with it we have built a strong management team around the world.”

Tiffany is embracing more Internet-related business development in the wake of stronger fourth quarter direct sales, which include both catalog and web, Kowalski told analysts. For the year Tiffany recorded:

• Flat direct sales of about $142.9 million, but an increase of 16% in the fourth quarter for combined web and catalog revenue in the U.S. Tiffany did not break out a specific figure for the final quarter.
• Total sales declined 4.9% to $2.71 billion from $2.85 billion in 2008. Fourth quarter sales increased year over year 17.5% to $984.1 million from $837.6 million.
• Comparable-store sales declined 8% for the year, but rose 8% in the fourth quarter.
• Net earnings increased 20.4% to $264.8 million from $220.0 million in 2008. Net earnings for the fourth quarter increased year over year 351.4% to $140.4 million from $31.1 million in Q4 2008.