Tough Times for Tiffany

Although it may come as no surprise to many people still struggling due to the economic situation, the demand for luxury goods continues to shrink. The iconic jewelry retailer has posted a dramatic drop in fiscal first-quarter earnings, which plunged 64 percent. Tiffany has blamed this drop in earnings on shrinking sales of the highest-prices goods.

The good news for Tiffany & Co. is that the decline in sales seems to be tapering off for the most part, except for the lack of interest in their high-end jewelry. Although sales are picking up comparatively quickly for Tiffany overseas, its American operations are struggling due to a weak economy and stronger competitors.

U.S. sales dropped 34 percent in the fiscal first quarter, but still, the luxury retailer continues to resist selling lower quality goods to recoup its losses. However, Tiffany has tried its luck with the handbag industry, purchasing the Lambertson Truex brand in a move reminiscent of some of Tiffany’s most prominent rivals.

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