Tiffany & Co.
By: Nick Antonucci
The Henssler Financial Group

The story of Tiffany & Co. (NYSE: TIF) begins September 1837 in New York City. With a borrowed $1,000, Charles Lewis Tiffany and John B. Young founded Tiffany & Young as a stationery and fancy goods store. On the first day of business, the store's sales totaled $4.98. Although a humble beginning, Tiffany & Young's sales grew quickly along with its reputation. Tiffany & Young began buying the latest accessories and goods from Europe, India and Asia directly from the shippers, as they arrived in New York from their various foreign ports. These exotic goods became an instant hit with New Yorkers.

With the fall of Louis Philippe's regime in France, French immigrants began pouring into New York, and were looking for a way to make money. Charles Tiffany saw this as a great opportunity and began buying diamonds from the French immigrants, making diamonds available in the United States for the first time. Tiffany later became known as "The King of Diamonds." By the 1850s, Tiffany was making quite the name for himself and was credited with being one of the world's leading silversmiths. To keep up with the high demand for silver goods, Tiffany purchased prominent silversmith John C. Moore's operations. He instructed Moore to make the metal to the highest English standard. With the retirement of his partner, Tiffany assumed full control of the company and immediately looked toward expansion. At the Paris World's Fair in 1867, Tiffany became the first American to win the Grand Prize for silver.

Charles Tiffany's continuous efforts to be the premier jeweler have paid off in the many years since the company's beginnings. The company completed its initial public offering of common stock in 1987. Today Tiffany & Co. is one of the most internationally renowned retailers, designers and manufacturers of fine jewelry and gift items. Tiffany currently operates 215 stores across the world, with 76 located in the United States. Tiffany & Company's brand is the single most important asset. The brand's value can clearly be seen in consumers' perception of the company.

Tiffany & Company's business has not changed dramatically from the business started by Tiffany years ago. Diamonds are at the heart of Tiffany & Company's offerings, but the business now includes gemstones, silver and gold fashion jewelry. Although gemstones and silver are popular jewelry items, products containing diamonds are still the best selling items, accounting for 47% of 2009 sales. Tiffany's main focus is driving sales. The company's business plan puts a high emphasis on its brand, and spares no expense in developing new strategies to maintain and improve its renowned brand.

Tiffany operates stores and boutiques across Europe and Canada, Latin America, and in established Asia-Pacific markets. Tiffany even has an emerging presence in China. The United States is Tiffany's largest market, accounting for 55% of 2008 sales revenue. Global sales revenue breakdown for 2008 was: Americas, 55%; Asia-Pacific, 32%; Europe, 10%; and Other, 3%. For the past five years, both Tiffany's net sales and gross profits increased, and it had a compound annual growth rate of 7.4%. Tiffany's key focus for the future is on global expansion with an emphasis on e-commerce, increased store productivity and maintaining active product development. Tiffany expects to achieve its future growth objectives through management's commitment to new product innovation and e-commerce.

Citations: Tiffany & Co.'s annual report and web site¹, Bloomberg², Value Line report dated 6/12/09³, S&P Advisor Insight Report dated 8/15/06 ⁴, and Yahoo! Finance⁵.