Reuters
- Tiffany & Co will be celebrating the death of Hong Kong's extradition bill.
- The jeweler lost six days of sales last quarter after shutting its stores due to mass protests sparked by the proposed law.
- Tiffany's plans to open a new flagship store and expand its airport boutique in the region, which accounts for about 5% of its total revenue.
- Watch Tiffany & Co trade live.
Tiffany & Co will be celebrating the death of Hong Kong's extradition bill.
The jeweler lost nearly a week's worth of sales in the region last quarter, after the government's bid to allow fugitives to be detained and transferred to mainland China sparked three months of mass marches and clashes between protesters and police.
"The current situation is taking a toll on our business," CEO Alessandro Bogliolo said on Tiffany's second-quarter earnings call last week. "We estimate that during the second quarter, we lost nearly six full selling days due to unplanned store closures."
Hong Kong is "critically important" for Tiffany's, Bogliolo said. The company has 10 stores in the region, its fourth-largest market by sales after the US, Japan, and mainland China. Hong Kong generates about 5% of Tiffany's total revenue, meaning a 20% drop in local sales would trim the total by one percentage point, Bogliolo added.
Tiffany's underlying revenue in Asia Pacific inched up 1% last quarter, as higher sales in mainland China offset weaker trading in Hong Kong, the group's earnings show. While the company faces a "unique set of challenges" in Hong Kong, Bogliolo said on the call, it's committed to bolstering its presence in the region.
The jeweler plans to open a three-floor flagship store at 1 Peking Road, the region's most popular shopping area for Chinese tourists, Bogliolo said. It also intends to expand its boutique in Hong Kong International Airport into a full-sized duty free store, as the global travel hub offers a "very nice shopping environment."
Tiffany's will be breathing a sigh of relief, but there's no guarantee the disruptions will end with the extradition bill's demise, as protesters have made other demands. For example, they've called for criminal charges against protesters to be dropped, and abuse of powers by the police to be investigated.
