Iconic jewelry retailer Tiffany & Co. is cutting jobs in order to recover from a lackluster holiday season, hit hard by the strong dollar and slowing sales in Asia. While there was no mention of how many jobs were to be cut, a Tiffany spokesperson told Reuters that it would be less than the number of voluntary retirement incentives Tiffany offered 800 employees in 2008.
The luxury retailer’s holiday sales including the strong dollar’s effect fell 6%. Without the dollar’s effect, same-store sales in the Americas fell 8% and Asia sales fell 9%.
Tiffany said it now expects total earnings to fall 10% in 2015, down from its previous expectation of 5% to 10%.
The strong dollar is increasingly appearing in retailers’ earning reports as a factor pulling down their bottom lines, and there’s no end in sight right now. A strong dollar means that, in particular, U.S. retailers like Tiffany with a large presence abroad or that cater to foreign tourists here will take a hit as their goods become more expensive.
Further, a strong dollar keeps tourists away from U.S. shores—and U.S. retailers—or at least cuts down on their spending. It doesn’t help that Europeans are also dealing with a struggling economy that is hurting their employment picture and the value of the euro.
Tiffany has been putting a lot of effort in appealing to younger luxury shoppers, featuring same-sex couples in its advertising and employing new designers. But as many younger shoppers are conditioned to look for sales, Tiffany's reluctance to discount may be turning them away.
But that doesn’t seem to be enough to combat the dollar’s muscle or the slowdown in Asian and global markets that is in part due to troubles in China.