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Tiffany swings to Q4 loss on Swatch settlement; 13 new stores planned

BY Dan Berthiaume

New York – A $473 million charge resulting from arbitration with The Swatch Group in December 2013 resulted in Tiffany & Co. reporting a net loss of $104 million in the fourth quarter of fiscal 2013. Tiffany reported net earnings of $180 million in the year-ago period.

During the quarter, Tiffany reported net sales of $1.3 billion, up 5% from $1.23 billion last year. Same-store sales rose 6%. During fiscal 2014, Tiffany plans to open 13 new global stores, including five in the Americas, and close four, including one in the Americas. Worldwide net sales are expected to rise by a high single-digit percentage.

In addition, Tiffany authorized the repurchase of up to $300 million of Tiffany’s common stock through open market transactions. Purchases are discretionary and will be made from time to time based on market conditions and the company’s liquidity needs. The program will expire on March 31, 2017.

During the full fiscal year, net earnings dropped 56% to $181.4 from $416.1 million. Net sales rose 5% to $4 billion from $3.8 billion and same-store sales improved 6%.

“We are proud of our performance this past year,” said Michael J. Kowalski, chairman and CEO of Tiffany. Sales and operating earnings (excluding the arbitration-related charge) rose to record levels. “Sales growth was led by fine and statement jewelry, new or expanded jewelry collections, and continuing strength in our iconic jewelry designs. Tiffany’s marketing communications more effectively engaged global consumers wherever they shopped, our distribution network was expanded by 14 additional stores, and everywhere the store experience was enhanced by improved visual merchandising.”

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Shoe Carnival gets cold feet in Q4

BY CSA STAFF

Bad weather and a tepid economy claimed another retail victim on Thursday as family footwear retailer Shoe Carnival posted weak sales and profits.

The operator of 379 stores said sales during its 13 week fourth quarter ended February 1 fell to $200.3 million compared to $205.7 million during the 14 week fourth quarter the prior year. Same store sales declined 2.5%. Profits during the period fell more sharply to $600,000, or three cents a share, from $3.2 million, or 13 cents a share the prior year, as gross margins contracted to 28.5% from 29.3%.

“Unfavorable weather in the fourth quarter negatively impacted our customer traffic, and consequently, our sales and earnings results,” said Shoe Carnival president and CEO Cliff Sifford. “In particular, robust traffic and sales in November were followed by significant declines in traffic and sales in December and January. Despite this tough sales environment, we ended fiscal 2013 with inventories in excellent shape and believe we are well positioned with the right assortment of family footwear at the right price to capitalize on the Easter selling season.”
Despite his optimism, same store sales are expected to be flat to down 3.5% and profits to be roughly in line with the prior year.

“While general consumer economic uncertainty keeps our outlook conservative for the first quarter of fiscal 2014, our Shoe Carnival team remains committed to managing the controllable aspects of our business to best position us for future growth as consumer spending begins to improve,” Sifford said. “We believe the April launch of our spring creative on national cable television will increase Shoe Carnival brand awareness in new and existing markets and will help to drive customer traffic to our stores and website.”

The company opened 32 new stores and closed seven last year. This year, the company said it expects to open between 30 and 35 stores and close only one location.

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Report: It may be time to consider new POS technology

BY Dan Berthiaume

New York – For many retailers, it may be time to consider investing in a new POS system. According to a new report from touch-screen POS terminal and peripheral vendor Posiflex Technologies Inc., fingerprint biometric technology provider Digital Persona Inc., and Chain Store Age, “How Do You Know If It’s Time to Upgrade Your POS System?,” rapid advances in omni-channel technology in the past several years have radically changed the nature of POS.

Instead of serving as simple transaction execution devices, POS systems now serve as links to a customer’s loyalty and behavioral history across all channels. In many instances, POS platforms also need to extend to mobile and customer self-service devices, connect to social networks and otherwise extend beyond standard fixed terminals.

Yet many retailers still operate the same POS system they were using five or even 10 years ago, leading to slower transactions and increased risk of fraud and theft, resulting in lost profits.

Upgrading the POS can also speed up customer service through features like omni-channel connectivity, which allows customers to gain quick access to online loyalty accounts, special mobile offers and other “seamless retail” features. This opens up the walls of the store and lets customers take advantage of every channel in which retailers do business at the physical point of sale.

In addition, biometric security technology offers built-in protection against internal theft and fraud at the POS. Fingerprints provide accountability, which is a strong deterrent to employee theft. Requiring a fingerprint login versus a password or card protects against employees granting access to unauthorized personnel, impersonating managers to approve improper overrides, sharing passwords, improperly clocking themselves and coworkers in and out, and otherwise abusing or misusing their access to POS systems and data.

Download the full report here.

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