Tiffany and Co. said to be the world’s second largest luxury jewelry retailer had a 62% fall in profits in the first-quarter, attributed to the global economic downturn.
Their sales in the U.S took the worst hit compared to their sales abroad. U.S consumers have been moving away from purchasing luxury items.
The net income for the first quarter was $24.3 million (20 cents per share), compared to $64.4 million (50 cents per share) during the same period last year.
According to Bloomberg there has been a 42% drop in sales at Tiffany’s New York store. This has been attributed to a drop in foreign tourism.
Tiffany also cut spending in the first quarter by reducing 10% (about 900) of their staff.
Presently Tiffany has 209 stores and boutiques ,76 of which were in the USA.
Despite reduced consumer demand in the luxury sector,Tiffany is projected to remain profitable, said Chairman and Chief Executive Michael J. Kowalski.
Tiffany also faces tough competition during the first quarter, due to heavy discounts and even liquidation sales by closing stores.
Tiffany’s shares rose 24 cents to close at 28.37 on Friday.
Many analysts believe that Tiffany is doing a good job considering the present economic downturn which has badly hit the luxury sector .