Tiffany & Co. Maps Three-Year Renovation of Its Vital Flagship Store
(Bloomberg) -- Holly Golightly take cover: Tiffany & Co. is renovating its 10-floor New York City flagship store on Fifth Avenue.
The jeweler plans to spend as much as 2 percent of its worldwide net sales on the renovation over the next three fiscal years, which could peg the total cost at as much as $250 million, according to Bloomberg calculations based on last year’s revenue. Construction is set to begin in spring 2019.
“We are extremely excited about the opportunity to transform our iconic New York flagship store and create a dramatic new experience for customers,” Alessandro Bogliolo, Tiffany’s chief executive officer, said in a statement. The revamped location “will serve as the modern crown jewel” of the company’s store fleet, he said.
Since taking the helm last year, Bogliolo has been overhauling the 181-year-old jeweler to attract younger shoppers and create newfound interest in the brand. More youthful advertisements and flashy products from design chief Reed Krakoff have drawn buzz for Tiffany, which beat analysts’ estimates with strong sales growth last quarter, sending shares up the most in nearly a decade. Through Tuesday’s close, the stock is up 27 percent this year.
Tiffany will temporarily use space inside the building next door, the former location of Nike Inc.’s famed Niketown store that closed earlier this year, in order to limit sales disruption.
The 124,000-square-foot (11,500-square-meter) building, which has 45,000-square-feet of retail space, is crucial for Tiffany, as the shop accounts for as much as 10 percent of the retailer’s annual sales. In fact, during the U.S. presidential election, low foot traffic due to increased security at the adjacent Trump Tower had a meaningful impact on the company’s performance.
The flagship’s current location opened in 1940 and has become a mainstay in the New York shopping scene. The jeweler’s first store opened its doors on Broadway in lower Manhattan in 1837, and slowly moved uptown over the years. Its location on Fifth Avenue is in the center of a Midtown neighborhood known for its luxury brands. Nearby shops include Louis Vuitton, Gucci and Neiman Marcus Group Ltd.’s luxury department store Bergdorf Goodman.
The Tiffany store’s cultural importance gained momentum thanks to the 1961 film “Breakfast at Tiffany’s,” starring Audrey Hepburn as Golightly. The ground floor, full of gleaming glass jewelry cases, has a main room with a 24-foot tall ceiling.
The store is used for more than just glitzy jewelry sales. Tiffany’s Blue Box Cafe, which opened last year, is on the fourth floor, and the top floor is home to Tiffany’s high-end jewelry workshop, where craftspeople create the label’s most ornate and expensive necklaces, rings and bracelets.
Tiffany expects the improvements to be completed in the final quarter of 2021.
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