Tiffany's move to Tucson another step in company's expansion - Tucson Local Media: Import

Tiffany's move to Tucson another step in company's expansion

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Posted: Wednesday, November 1, 2006 12:00 am | Updated: 7:52 am, Thu Mar 24, 2011.

November 1, 2006 - First, store and local officials made welcoming speeches. Then, the doors flung open and the invited guests filed into the town's newest retailer, greeted with the sound of trumpets. Once packed inside, they ate a catered breakfast while serenaded by a string quartet.

The occasion worthy of such fanfare: Tiffany & Co. throwing an invitation-only breakfast to celebrate a new retail store it had opened in an upscale shopping center.

A story in a daily newspaper trumpeted the importance of the retailer's arrival. The new store, it claimed, represented, "the changing face of Nashville."

That's right. Nashville.

High-end retailers, such as Tiffany, Burberry and Coach, have moved away from their old strategies of opening stores only in big cities. They now expand to many smaller locations. The Oct. 11 opening of Tiffany's Tucson store at the La Encantada shopping center was nearly a carbon copy of the Nashville event, save for a few hitches.

For example, the trumpets and strings at the Tucson store were interrupted when the store's first guests accidentally set off the alarm.

And, although most Tiffany openings include covering the store's door with a giant replica of the retailer's iconic light-blue box, a draft blowing through La Encantada kept knocking it over. So the ceremony continued, albeit with the door uncovered.

Among the local VIP's at the opening were Tucson Mayor Bob Walkup and Pima County Supervisor Ann Day.

Walkup, in his speech, said Tucsonans were, "great believers in quality businesses." Tiffany, which sells high-end jewelry mostly to wealthy shoppers, seemingly qualifies.

When Day spoke, she tied the event, a breakfast at a Tiffany's store, to the film, "Breakfast at Tiffany's." Just as Holly Golightly went to a Tiffany store to feel like an adult, Day explained, having a Tiffany store in the city means that Tucson is "all grown up."

Day only told part of the story. The other part is that the list of towns playing host to a Tiffany store has become much less exclusive than it once was.

In 1988, Tiffany Chairman and Chief Executive William R. Chaney told the press at a luncheon that the company would accelerate its expansion by opening - gasp! - one new store a year.

Chaney laid out the criteria a city must meet to be worthy of a Tiffany store. Cities with more than two million people, at least 20 percent of whom make more than $50,000 in a year, would be considered as new store locations, so long as those people had proven willing to spend a lot of money on jewelry.

At the time, there were 10 cities in the country that met the criteria. Tucson, it should go without saying, was not one of them. Neither was Nashville. Though both areas have grown in the nearly two decades since Chaney's 1988 announcement, neither has met that threshold.

According to Census estimates, the Tucson region's population will exceed 1 million in 2007. Nashville won't top 2 million until after 2020, according to forecasters at American City Business Journal.

As Tucson's population expands so does the its economic diversity, according to Mary Ann Eastlick, a professor of Retailing and Consumer Science at the University of Arizona. Though Tucson's median income isn't high - it's about $5,000 less than the nation's median household income - there are still a number of residents who can afford Tiffany products.

In 2005, for every Pima County household with an income below $35,000 another made more than $75,000.

Tucson's new Tiffany store is strategically located near many of the wealthier households in the region. Most households in Oro Valley and the Foothills make more than $60,000 a year.

Today's Tiffany is expanding at the rate of three to five new stores per year. The company plans to continue that rate until it has 100 locations in the country. The Nashville breakfast, held last July, celebrated the opening store number 62. Store No. 63 opened at the La Encantada shopping center in Tucson.

Tiffany is far from unique in this sense. Louis Vuitton also has recently opened a Nashville store and on Nov. 2 throws open the doors to its newest location, La Encantada.

If Louis Vuitton executives watched the Tucson Tiffany's opening to judge the city's interest in what Walkup called "quality business," they should have been pleased.

Tiffany received approximately 200 RSVP's to its local coming-out party, and the large number of guests made it difficult to move in the store.

Store representatives claim that the company's accelerated expansion is not a result of Tiffany compromising its standards, but rather is caused by its increased ability to pin-point potential customers.

Tiffany made the decision to move here only after identifying a large number of residents who bought Tiffany items from the company's Scottsdale store, its Web site or its catalogue, said Tiffany Tucson Store Director Matthew Winters.

Far from guarding their pockets like spendthrift yokels, customers in the previously off-limit cities have proven worthy of their new, high-priced neighbors.

Comparing the first half of this year to the first half of 2005 shows that sales in the company's non-New York City stores increased more than sales in Tiffany's flagship location, according to the company's records.

What's more, those increased sales were caused not by an increase in customers, but by customers spending their money on higher-priced items.

If Tucsonans hope to prove themselves just as worthy, they'd better start spending.

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