Jewelry web blog

 A few questions: is the opening of an Israeli store representing luxury goods firm tiffany & Co. another vote of cufflinks for regional stabilization?  Does the availability of Tiffany’s products to local Holly Golightlys (and to customers with Holly-like desires plus the bucks to back them), put Tel Aviv on the list of world centers of elegance and affluence?  Does this mean Israel rates?
 The answer is a careful but positive Yes, according to Tom O’Neill, senior vice-president of the Asia-Pacific division of Tiffany & Co.  O’Neill was in Tel Aviv last week for the opening of Amirel, exclusive distributor of Tiffany products to Israel.
 ”I feel we made the right decision at the right time,” he says.  A cocktail party held the night of April 8 at Amirel’s flagship store in the Gan Ha’Ir mall – and well attended by local celebrities such as supermodel-for-a-minute Michaela Bercu – “confirmed our instincts about the Israeli market.  From the very beginning our research showed Israelis were value-conscious, design-oriented and fashionable.  Put that all together and you see it was just a matter of deciding when to go into the marketplace.”
 So what took Tiffany so long?
 One reason is that, until 1984, the year O’Neill joined Tiffany & Co., the firm had very limited exposure outside the US.  That same year then-president of Avon products William Chaney was preparing a leveraged buyout of Tiffany from Avon.  (Chaney is today president of Tiffany & Co.  ) “We were a private company for a few years,” relates O’Neill “and made an IPO (initial public offering) on the New York Stock Exchange in 1987, a few years earlier than expected.  We were more successful than we thought we would be.”
 Part of that success was due to international expansion.  “When we were a private company between the LBO (leveraged buyout) and the IPO, we targeted international expansion, as the company had excess capital to reinvest.  We opened our first store in London in late 1985.”
 In 1990 O’Neill was made VP of the international division, where he has been responsible for expansion of retail trade, money clips marketing and fragrance businesses in new global markets.  Tiffany today has 82 locations worldwide, most of them outside the US.  However, O’Neill hurries to point out, only 37 percent of sales are outside the US.  “The largest stores, and 50 percent of sales, are within the US.”
 The company operates three distribution channels: US retail which includes sales in Tiffany & Co. stores to specific jewelers and specialty retailers; direct marketing, which includes business-to-business sales and catalog sales; and international retail.  This department includes sales through Tiffany & Co. stores throughout Europe, the Far East, Canada and the Middle East as well as sales to retailers and distributors in those areas.
 Tiffany & Co.  1993 net profits were $ 29.3 million or $ 1.85 per share, compared with $ 22.47m. or $ 1.42 per share (excluding a charge for business realignment in Japan) a year earlier.  1993 revenues increased 21 percent to $ 682.8 million from $ 566.6m. in 1992.
 This year, Tiffany opened an store in Abu Dhabi in the United Arab Emirates in January, and one in Jedda, Saudi Arabia, in April.  For the Gan Ha’Ir store opening, O’Neill drove to Tel Aviv from Amman where the company has a small distributor.
 Up until now O’Neill says, “(Tiffany) has had a small and sporadic business in the Middle East but we have not been a significant presence.  Tiffany has intentionally not been involved (in the Middle East).” Now, he says “it makes sense, given the peace process and the seeming change in the various economies in the region.”
 Nonetheless, Tiffany’s has long had connections in the wholesale diamond sector.  The company has been doing business in Israel “for a number of years,” although O’Neill declines to specify how long.
 Until recently, Israel with its triple digit inflation, high import duties and non-luxurious standard of living, was not seen a significant market for Tiffany.  The Gan ha’Irs and Malcha malls of today, or as O’Neill calls them “upgraded retail outlets” are the result of “increased demand from Israeli consumers for upscale presentation and diverse products.” This demand makes up one of O’Neill’s key principles of expansion: “the value behind the product as perceived by the customer.”
 So, what do Israelis like?
 ”We are the first to admit we don’t know the Israeli market,” admits O’Neill.  But research was conducted among a core set of Israeli customers in the US based on past purchases “so we know our product appeals to that group.”
 It’s too early to tell whether or not Israelis will tend toward American East Coast and Midwest conservatism, West Coast and Southern extravagance or whether Israel will follow one of the European profiles.
 Despite O’Neill’s description of his company as “staid,” the Gan Ha’Ir store is elegantly modern: rough sandstone walls contrast with polished stone floors of the same hue, well-lit cherry wood display cases frame sparkling jewels.  Niches encase the most valuable collections: Paloma Picasso’s hammered gold collar inset with precious stones and the signature line.  The shop is a perfect interpretation of what Tiffany in Israel should look like.
 While Tiffany’s prices range from $ 50 for a sterling silver keyholder to $ 30,000 for the Paloma Picasso collar, pieces from Tiffany’s signature collection range from $ 500 to $ 13,000.  The Paloma Picasso Xs and Os line runs from $ 60 for a silver, or $ 300 for a gold pendant and $ 2,000 for a gold pin.  (Prices quoted are approximate and do not include VAT.  )
 O’Neill is impressed by Israel.  “Just look at it!” he enthuses.  “When you drive from Amman to Tel Aviv and you see the difference – it’s an accomplishment.”
 O’Neill spends most of his time in the Middle East and Asia.  The overall plan for the Middle East, outlines O’Neill, is to “go through a growth period of several years, retrench and then go on expanding.”
 Tiffany’s has small businesses in Oman and Qatar.  “We are looking at Dubai, Egypt and Kuwait for the future.  We are also pendants at Riyadh – if we open there we will do so before the Ramadan (gift-giving) season.”
 ”Before we go into a marketplace we decide if we have the familiarity with the location to go it alone or to go with a (strategic) partner.” And, although he declines to name names, O’Neill does say some of Israel’s most prestigious jewelry companies were in the running for the Tiffany’s franchise.  The choice of working with a start-up company suits Tiffany’s best, he says.  “They are fresh and exuberant with good ideas.  Established companies often have their own way of doing things.
 Amirel’s five-year plan is to open five stores in Israel.  “We’ll see how this goes,” says O’Neill.  Amirel’s partners Yochai Amiel and Ayal Regev say Eilat has been targeted as the next location.
 (Box ) From Bric-a-Brac to the Crown Jewels
 ”Tiffany’s has its own design principles,” says senior VP Tom O’Neill.  “American.  Uncomplicated design.  Simple impressions and images.  We are aware of jewelry design in Israel because of who we are.  We look at design trends in the world because first and foremost Tiffany’s is a design house.”
 Tiffany’s was opened in 1837 by the 25-year old Charles Lewis Tiffany and his friend John P. Young.  Originally the store was a stationery and fancy goods store, stocked with bric-a-brac, pottery and umbrellas, a jumble of goods remarkably similar to the stock carried by Israel’s neighborhood stationery stores today.
 Within 12 years Tiffany’s inventory grew to include watches, clocks, silverware and bronzeware.  As he became a gem merchant, Charles Tiffany added gold and diamond jewelry departments to his store, continuing to diversify, innovate and even sensationalize.  He sold bits of the transatlantic cable, laid in 1850.  He bought and sold Marie Antoinette’s Girdle of Diamonds, several other French crown jewels, and set up several factories to make some of the products he sold.
 ”Charles Tiffany’s unmitigated success is well-affirmed by this fact,” reads the company’s official history, “on the first day of business receipts totaled $ 4.98; at his death in 1902 he left an estate of $ 35 million.”
 In 1878, silversmith John C. Moore’s Tiffany collection won the Paris Exposition Universelle gold medal for craftsmanship in silver.  (Moore was the first American to win the medal.  )
 Following the death of Charles Tiffany, his son Lewis Comfort Tiffany became the company’s first director of design.  Having studied art both in the US and Paris, the younger Tiffany opened his first workshop for colored glass and tiles in 1875.  He is perhaps best known as the developer of Tiffany Favrile Glass, an irridescent glass of colors earrings from deep blue/purple to green/yellow-gold.  The glass was used to make decorative pieces such as “Tiffany” lampshades or windows.
 After taking over the family business, L.C. turned an entire floor of the store into his workshop for designing jewelry.  The company continues to offer a line based on his designs.
 The present day house designers are Paloma Picasso, Elsa Peretti and the late Jean Schlumberger.  In addition, Tiffany’s employs a staff of 400 designers and craftsmen.