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Tiffany & Co., London

Tiffany & Co., The luxury US jeweler, said on Friday that demand was starting to improve for its offerings, in spite of falling profits, signalling renewed appetite from US consumers for discretionary items such as diamonds and necklaces.

Luxury retailers have been pummelled by the recession, with shoppers focused on necessities. But Tiffany & Co. has held its prices steady while slashing costs and the company says it is beginning to see the benefits.

“It appears the tide may be slowly turning in our favour,” Mark Aaron, vice president of investor relations, said in a conference call with analysts.

“Tiffany’s brand management has been excellent during the slowdown,” said David Schick, an analyst at Stifel Nicolaus. “They’ve been through the Great Depression, so they have a great heritage.”

Tiffany & Co., Madrid

Sales in the US have been hit the hardest, plunging by 25 percent, while those in Europe and Asia were off by just 4 percent and 1 percent, respectively.

“While economic and retail conditions remain challenging, we were encouraged to see many stores achieving either smaller year-over-year rates of sales declines or modest sales growth compared with the past two quarters,” Michael Kowalski, Tiffany’s chief executive, said in a statement.

Within the US, sales in the New York area have suffered from widespread job cuts in the financial sector. Sales were off by 30 per cent in the nine store New York region and at the flagship store in Manhattan. Jewelry priced above $50,000 has been the hardest to sell in the last year, while items with more “accessible” prices have seen smaller declines in sales, the company said.

Mr Kowalski noted that Tiffany is working to trim costs in the face of weaker consumer demand, but that it would continue opening stores in hopes of capturing a greater share of the market while other luxury retailers struggle. The New York-based company operates 211 stores across the world and said it would expand by a modest 6 per cent this year.

Tiffany & Co. website click here.