Timeless Tiffany

"Was there life before Tiffany?" smiles Jim Quinn when I ask him about his career prior to joining the renowned luxury jeweller over 20 years ago. In fact, this laconic Irish-American New Yorker worked for some 12 years with Citibank in various wealth management and private banking roles, completing an MBA at night before joining Tiffany in 1986.

Quinn attributes much of Tiffany's success to the longevity and dedication of the senior management there. "I've been here 22 years, the chairman has been here for 20 years and the CFO for 25 years. We have had the enormous good fortune to work together over many years and see the company grow to where it is today."

And grown it has. Despite its iconic status, thanks to the Truman Capote novella and subsequent movie Breakfast at Tiffany's, when Quinn joined it was a relatively small New York business with just six US branches. Today it is a truly global brand, with nearly 200 stores in 30 countries, from Toronto to Moscow, Tokyo to Beijing.

Quinn says he started at Tiffany during an important transitional period. The business had gone through several changes in ownership. For many years a private company, in the late Seventies it was acquired by Avon Products, which by the early Eighties was looking to sell the business. The executive management at Tiffany organised a leveraged buyout and took the company private again.

“It was a terrific time to join because the executive management that's here today was essentially coming together at that point, although in much more junior positions. We have grown up together professionally as the business has grown up, and that has been a strength.

“Today we are present all over the world, we have a multichannel business, not just retail but a catalogue and ecommerce business too. We manufacture and design most of our products and source many of our precious metals and gems directly from the mines. We now have a multi-functional global business with a very exciting and complex business model."

Iconic luxury brand

As I head to Tiffany's Madison Avenue offices to meet Quinn, a bus stops alongside my cab, its advertising livery touting some standard American romantic comedy. Depicted is a well-dressed suitor bearing a gift in a small neat box. No logo is visible but it strikes me that it is instantly recognisable as a Tiffany gift box, thanks to its iconic - and trademarked - blue.

It's a timely reminder of the ubiquitousness of the premium brand, but of course the brand is about a lot more than its famous packaging. "It is interpreted in many ways - the design, quality and craftsmanship that goes into the product," says Quinn. "It is interpreted in how we communicate it in our creative marketing, how we design and build our stores, the experience the customer has when they come in. In essence it is at the core of everything we do."

Of course everything about the brand must shout luxury, including the all-important choice of store location; the Beverly Hills store is located on Rodeo Drive, the London one on Bond Street. It is no accident that Tiffany only made its move on Dublin when a prestigous retail unit became available on Grafton Street. The new 120 square metre store opens this autumn and will be on the refurbished ground floor of Brown Thomas.

“It's a terrific market," Quinn enthuses. "If it were solely up to me we would have opened in Dublin a long time ago, but smarter people prevailed and now the time is right. We know already that many Irish customers shop in our London and New York stores, and we expect to do exceptionally well there."

He agrees that location is certainly, in part, what paces Tiffany's store expansion. "At any one time we will have two or three times the number of stores planned under consideration, until the right location becomes available. We won't open in anything less than an A1 location, so when this one finally became available on Grafton Street, there was really no other place for us.

“It all goes back to the brand. Where you locate yourself, the neighbours adjacent - it all communicates something about what you believe your brand to be, and more importantly your customers' perception of it."

Going global has created its own challenges, Quinn admits. "The brand management becomes far more interesting and complex as we expand, because now we need not only to understand our brand, but to understand our customers all over the world and how they respond to that brand."

China is one market where Tiffany is aiming to capture the hearts of the burgeoning upper and middle classes. It opened its first store there back in 2002 and is about to open an eighth store in Qingdao. The jeweller already operates two stores each in Beijing and Shanghai, and one each in Tianjin, Shenyang and Chengdu. And this is just the beginning.

“It is only in the past year that we have been given the ability to have a wholly foreign-owned entity there, which gives us a lot more flexibility about where we open stores. This means we've accelerated our pace and expect to open another four or five stores in China each year over the next five years."

A European tradition

Europe too remains a key market. When we meet, the first quarter figures have recently been released, showing that global sales are up by 12pc, European sales by 38pc. "Yes, Europe has been a terrific market for us," says Quinn. "We opened our first store in Europe 20 years ago in London, but for the first five to 10 years we were really finding our way.

“There is no more competitive marketplace for jewellery than Europe because the traditional jewellers came from Europe, from France, Italy, Germany and the UK. By opening in London we went into the lion's den."

Quinn says it took quite a while for Tiffany to establish its own presence in Europe, to build awareness and appreciation of the Tiffany brand. "But in the past several years, with a platform now of 15 stores in Europe, it has become a very profitable business, and we're accelerating our pace of growth there." Indeed, Tiffany has just opened its first store in Brussels, has plans for two more in Germany and is opening a flagship store in Madrid this year - and of course there's the Dublin branch.

Riding the slowdown

Given the current economic outlook, our conversation inevitably turns to the fate of luxury brands in a slowdown. In Japan's recession in the Nineties, the premium brands are famously the ones that fared best in a depressed market.

“We're not immune to macro-economic conditions, and we certainly have to respond to them," says Quinn. "In the US our business has slowed down in the first quarter, but outside the US - in Europe and Asia in particular - our business has grown exceptionally fast, well beyond the trends. So we do benefit from our business model of multi-channel distribution, with business all over the world. If one particular market is suffering more, we can compensate for that by the strength we have in other areas."

Another factor that offers Tiffany a little more buoyancy in difficult economic times, says Quinn, is the fact that weddings and engagements are the centre of its product offering. "I wouldn't say it's a recession-proof market but it's a little more resilient. Our product is purchased to celebrate the most important moments of life, the birth of a child, a birthday, an anniversary, a wedding - those occasions continue to happen even in tough economic times. People continue to fall in love. Budgets may be modified but the occasions don't go away."

Not that Quinn has any illusions about the challenges for retailers. "That said, if people are suffering economically they have to find a way to take care of the most essential things in their lives, and while we like to think we're important, we're not essential."

And the future for Tiffany? "Well, we have to stay very close to trends all the time, and we're constantly looking for new opportunities for growth and new ways of being smarter and more productive," says Quinn. "We're currently planning a major renovation of our flagship Tokyo store, and we'll use the opportunity to refresh our presence there through promotion. We're also looking at our whole store design process and new store formats. We have to continue to be responsive to changing customer needs and tastes.

“And we'll continue to look for opportunities to grow within mature markets like the US and Japan, and to expand in our early development markets like China and even Europe. We still see Europe as an early development market, because we have far fewer stores there than our global competitors."

So overall the long-term strategy is world domination, I suggest. "Yes," laughs Quinn. "I guess you could say that."

Jim Quinn is a director and former chairman of the North American Advisory Board of UCD Michael Smurfit Graduate Business School.

This article first appeared in Business Connections, the UCD Business Alumni magazine: www.ucd.ie/businessalumni