Luxury market up for Tiffany and Zale

Experts say middle-class
shoppers aren’t buying
as much jewelry.

DALLAS (AP) — Jewelry retailers Tiffany & Co. and Zale Corp. said Thursday they made money this summer, but their quarterly sales performance suggested the luxury end of the market is stronger than the vast middle.

Zale, which operates middlebrow chains such as Zales Jewelers and Gordon’s Jewelers, saw its same-store sales fall 0.5 percent.

But at high-end Tiffany, sales at stores open at least a year — one of the most closely watched indicators in retailing — jumped 17 percent in the United States and 13 percent overall from a year ago.

Industry experts said Zale’s middle-class shoppers were feeling pinched by high energy prices and slumping housing markets.

“The economy and the mortgage market are in flux, and that has some effect on purchases of luxury items such as jewelry,” said Mark S. Gottlieb, a business appraiser who has testified in court and written about the jewelry industry. “It may have more impact on the Zale-type customer than the Tiffany-type customer.”

Despite the increase in same-store sales, Tiffany’s profit in the May-July quarter fell 10 percent due to a charge for selling its Little Switzerland retail business.

Net income was $37 million, or 26 cents per share, down from $41.1 million, or 29 cents per share, a year earlier.

Excluding the charge and results from the pending sale of Little Switzerland, New York-based Tiffany said operating profits were 45 cents per share. Analysts, who usually exclude one-time items from their estimates, had forecast 34 cents per share, according to a survey by Thomson Financial.

Overall sales rose 20 percent to $662.6 million from $554.7 million a year ago.