Retailers, consumers and prices
Check Out Line: From beef jerky to jewelry, cost cuts pay off
Tiffany & Co’s fourth-quarter profit handily topped analysts’ estimates, after the luxury jeweler took aggressive steps to tighten its cost structure as even wealthy consumers pare back spending in the recession.
Tiffany said earlier this month it would close its 16 Iridesse stores, since the chain, which specialized in pearl jewelry, recorded an operating loss ever since it started a few years ago. In January, the company said it was reviewing all elements of its cost structure. On Monday, it said it would suspend buying back its own shares until further notice.
Historically, retailers at the high end and low end were more shielded than those in the middle from the impact of a recession, as wealthy consumers were less affected and mass retailers and drug stores sold necessary items like medicines and toiletries. Yet the scope of the current downturn has meant all levels of retailers felt the pain and have therefore sought ways to preserve costs as sales slow.
Walgreen Co, which is in the midst of a major overhaul that includes job cuts, store remodeling and moving some pharmacy work to centralized locations, posted a better-than-expected quarterly profit as those efforts paid off.
The drug store chain also said it filled 4 percent more prescriptions in the quarter than a year earlier, while retail competitors filled 1 percent fewer prescriptions.
Walgreen is also promoting paper towels, tissues, food and other items in new advertising, touting itself as a place to shop for “Affordable Essentials.”
Also in the basket:
Clarins puts on its best face in U.S. (WSJ – subscription required)
Designer high-low marriages on the rise (WWD – subscription required)