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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED JANUARY 31, 1994 COMMISSION FILE NUMBER: 1-9494
TIFFANY & CO.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction
of incorporation or organization)
13-3228013
(I.R.S. Employer
Identification No.)
727 FIFTH AVENUE
NEW YORK, NY 10022
(Address of principal executive offices)
212-755-8000
(Registrant's telephone number, including area code)
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SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
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COMMON STOCK, $.01 PAR VALUE NEW YORK STOCK EXCHANGE
STOCK PURCHASE RIGHTS NEW YORK STOCK EXCHANGE
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. / /
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STATE THE AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY NON-AFFILIATES
OF THE REGISTRANT. THE AGGREGATE MARKET VALUE SHALL BE COMPUTED BY REFERENCE TO
THE PRICE AT WHICH THE STOCK WAS SOLD, OR THE AVERAGE BID AND ASKED PRICES OF
SUCH STOCK, AS OF A SPECIFIED DATE WITHIN 60 DAYS PRIOR TO THE DATE OF FILING.
As of March 24, 1994 the aggregate market value of voting stock held by
non-affiliates was $435,132,018.13. See Item 5. Market for Registrant's Common
Equity and Related Stockholder Matters below.
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INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE REGISTRANT'S
CLASSES OF COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE: 15,663,063 shares of
Common Stock outstanding as of March 24, 1994.
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The following documents are incorporated by reference into this Annual
Report on Form 10-K: Registrant's Annual Report to Shareholders for the Fiscal
Year Ended January 31, 1994 (Parts I, II and IV) and Registrant's Proxy
Statement Dated April 7, 1994 (Part III).
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PART I
ITEM 1. BUSINESS
(a) General development of business.
Registrant (also referred to as the "Company") is the parent
corporation of Tiffany and Company ("Tiffany"). The Tiffany business was
founded in 1837 and was incorporated in New York in 1868. On May 5, 1987
Registrant completed the initial public offering of its Common Stock.
(b) Financial information about industry segments.
Industry segment information is not provided because the Registrant
operates in a single industry segment: retail and wholesale distribution of
fine jewelry, gift and fashion accessory items. Incorporated by reference from
Registrant's Annual Report to Stockholders for the fiscal year ended January
31, 1994 (Footnote M. "Foreign Operations") is the Registrant's geographic
segment information for the fiscal years ended January 31, 1994, 1993 and 1992.
(c) Narrative description of business.
As used below, the terms "Fiscal 1991", "Fiscal 1992" and "Fiscal
1993" refer to the fiscal years ended on January 31, 1992, 1993 and 1994,
respectively.
Products
Registrant's principal product categories are fine jewelry,
timepieces, sterling silverware, china, crystal, stationery, writing
instruments, fragrance, leather goods, scarves and ties.
Registrant offers an extensive selection of fine jewelry at a wide
range of prices. In Fiscal 1991, 1992 and 1993, approximately 62%, 60% and
65%, respectively, of Registrant's net sales were attributable to jewelry. See
Merchandise Purchasing, Manufacturing and Raw Materials below. Subject to
approval by Tiffany's design department, designs are developed by employees,
suppliers, independent designers and independent "name" designers. See
Designer Licenses below.
TIFFANY & CO. brand watches and clocks as well as other brands of
watches are sold. The range of TIFFANY & CO. brand sterling silver merchandise
includes flatware, hollowware (tea and coffee services, bowls, cups and trays),
trophies, key holders, picture frames and desk accessories. Crystal,
glassware, china and other tableware, is sold under the trademarks of
well-known manufacturers, as well as under the TIFFANY & CO.
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trademark. Custom engraved stationery, writing instruments, handbags, wallets,
scarves, men's ties and fashion accessories are sold under the TIFFANY & CO.
trademark. Fragrance products are sold under the trademarks TIFFANY and TIFFANY
FOR MEN.
Distribution and Marketing
Channels of Distribution
Registrant sells through three channels of distribution, and reports
its sales as follows:
U.S. Retail consists of retail sales from stores in the United
States and wholesale sales to selected independent retailers
in North America. U.S. Retail sales include wholesale sales
of fragrance products in the United States, Canada and in the
Caribbean region. See U.S. Retail below;
Direct Marketing consists of sales in the United States
through a staff of specialized sales personnel who concentrate
on business clients, and sales through direct mail catalogs.
See Direct Marketing below; and
International Retail consists of both retail and wholesale
sales to customers located outside the United States. See
International Retail below.
U.S. Retail
The Fifth Avenue store in New York accounts for the largest portion of
the Company's sales and is the focal point for marketing and public relations
efforts. Approximately 23%, 24% and 21% of total Company net sales for Fiscal
1991, 1992 and 1993, respectively, were attributable to the New York store's
retail sales. Management believes that the New York retail store will continue
to account for a substantial portion of the Company's sales. Approximately
32,450 square feet in the New York building are devoted to retail selling.
Prior to September 1963, when the first branch store was opened in San
Francisco, the New York store was Tiffany's sole retail location in the United
States. Since that time, branch stores have been opened in the following
cities: Houston (1964), Beverly Hills (1964), Chicago (1966), Atlanta (1969),
Dallas (1982), Boston (1984), Costa Mesa (1988), Vienna, Virginia (Washington
D.C. area) (1990), Philadelphia (1990), Palm Beach (1991), San Diego (1992),
Honolulu (1992), Troy, Michigan (1992) and Bal Harbour (1993). The Beverly
Hills branch store was relocated to larger quarters in 1990, as were the San
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Francisco and Houston branches in 1991. In March, 1993 a boutique located in
Atlantic City, New Jersey which had been opened in 1990 was closed. Each of
the 15 U.S. branch stores displays a representative selection of merchandise
but none maintains the extensive selection carried by the New York store.
Management currently contemplates the opening of new branch stores in major
United States cities at the rate of approximately two per year. Separate lease
agreements to open branches in Short Hills, New Jersey and Chevy Chase,
Maryland have been entered into and, subject to completion of construction,
Registrant expects to open for business in those locations in September 1995
and April 1996, respectively. The Chevy Chase location could, however, open as
early as Fall 1994 should the space become available. See Item 2. Properties
below for further information concerning U.S. Retail store leases. United
States branch stores range in size from approximately 5,000 to 16,000 gross
square feet and total approximately 170,000 gross square feet devoted to retail
purposes. On average, approximately 45 percent of the floor space in each
branch store is devoted to retail selling.
Tiffany sells jewelry, watches, tableware and other products at
wholesale to approximately 195 United States independent retail locations
(exclusive of locations which sell only TIFFANY fragrance products). Selected
merchandise is provided to these accounts at wholesale prices that allow
traditional retail jewelry mark-ups.
TIFFANY and TIFFANY FOR MEN brand fragrance products are sold in
Registrant's own stores, through its Direct Marketing channel of distribution
and through wholesale distribution in the U.S. and many overseas markets.
These products are now available in approximately 3000 retail locations in the
United States and abroad. Chanel, Inc. sells fragrance concentrates to
Tiffany. A subsidiary of Chanel, Inc. provides production, packaging,
warehousing, accounting and U.S. distribution services. Tiffany retains
control of marketing and promotion and owns all fragrance product inventories
and receivables.
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Direct Marketing
Corporate Division sales executives call on business clients
throughout the United States, selling products drawn from the retail product
line and items specially developed for the business market, including trophies
and items made to customer specifications. Price allowances are given to
business customers for volume purchases. Corporate Division customers purchase
for business gift giving, employee service and achievement recognition awards,
customer incentives and other purposes. Products and services are marketed
through a sales force of approximately 130 persons, through advertising in
newspapers and business periodicals and through the publication of special
catalogs.
Tiffany also distributes catalogs of selected merchandise to its
proprietary list of mail and telephone customers and to mailing lists rented
from third parties. Four seasonal SELECTIONS (R) catalogs are published,
supplemented by COLLECTIONS and other catalogs. The following table sets forth
certain data with respect to mail order operations for the periods indicated:
Fiscal Years Ended January 31,
1992 1993 1994
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Number of names on catalog mailing list at year-end (consists
of customers who purchased by mail or telephone prior to the
applicable date):
414,895 491,538 535,307
Total catalog mailings during fiscal year (in millions):
12.4 12.9 14.1
Total mail or telephone orders received during fiscal year:
180,795 197,984 210,379
International Retail
Stores and boutiques included in the International Retail channel of
distribution are listed below. For locations operated by Registrant's
subsidiary corporations, Registrant records as sales the retail price charged
retail customers. For locations operated by third-party distributors,
Registrant records as sales the wholesale price charged to the third-party
distributors.
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International Locations
LOCATIONS OPERATED BY REGISTRANT'S SUBSIDIARIES
FREE-STANDING STORES JAPAN: MITSUKOSHI DEPARTMENT STORES
(Boutiques Located in Mitsukoshi Department Stores)
London, England Tokyo (Nihombashi) Takamatsu
Munich, Germany Tokyo (Shinjuku) Matsuyama
Zurich, Switzerland Tokyo (Shinjuku) + Hirakata
Frankfurt, Germany Tokyo (Ginza) Kobe
Milan, Italy (Faraone) Tokyo (Ikebukuro) Nagoya (Hoshigaoka)
Florence, Italy (Faraone) Yokohama Nagoya (Sakae)
Hong Kong (Peninsula Hotel) Sendai Niigata
Hong Kong (Landmark Center) Sapporo Chiba
Taipei, Taiwan Osaka Kagoshima
Singapore (Raffles Hotel) Kurashiki Okinawa
Singapore (Ngee Ann City) Hiroshima
Toronto, Canada
+ (Accessories Boutique)
JAPAN: NON-MITSUKOSHI DEPARTMENT STORES JAPAN: OTHER MITSUKOSHI LOCATIONS
Kawasaki, Japan (Saikaya Department Store) (NON-DEPARTMENT STORE LOCATIONS)
Kokura, Japan (Izutsuya Department Store) Hilton Hotel, Nagoya, Japan
Kyoto, Japan (Daimaru Department Store) Hotel Okura, Kobe, Japan
Hamamatsu, Japan (Matsubishi Department Store) Tokyo Bay Hotel, Tokyo, Japan
Oita, Japan (Tokiwa Department Store) Royal Hotel, Osaka, Japan
Osaka (Shinsaibashi), Japan (Daimaru Department Store) Nagano, Japan (Specialty Store)
Osaka (Umeda), Japan (Daimaru Department Store) Fukuoka, Japan (Specialty Store)
Kumamoto, Japan (Tsuruya Department Store) Kanazawa, Japan (Specialty Store)
The Landmark, Yokohama, Japan
LOCATIONS OPERATED BY LOTTE TRADING CO., Ltd. in Korea LOCATIONS OPERATED BY MITSUKOSHI LIMITED AND AFFILIATES
Lotte World Department Store, Seoul (Duty-free) DEPARTMENT STORE LOCATIONS
Lotte Department Store, Seoul (Duty-free) (Duty-paid) Hong Kong
Hotel Lotte, Seoul (Lobby boutique) (Duty-free) Taipei, Taiwan
Hotel Paradise, Pusan (Duty-free) Tokyo (Nihombashi), Japan (Faraone)
Tokyo (Shinjuku), Japan (Faraone)
Sapporo, Japan (Faraone)
LOCATIONS OPERATED BY OTHER THIRD PARTIES Matsuyama, Japan (Faraone)
NON-DEPARTMENT STORE LOCATIONS
Rustan's Department Store, Manila, Philippines Moana Surfrider Hotel, Honolulu, Hawaii
DFS Saipan Tumon Sands Plaza, Guam
The above listing does not include international "trade accounts",
i.e. non-U.S. retailers to which TIFFANY & CO. or FARAONE brand merchandise is
sold on a wholesale basis, but which do not operate a TIFFANY & CO. or FARAONE
boutique within their respective stores.
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From 1972 through July 1993, selected TIFFANY & CO. products,
principally jewelry and watches, were purchased from Tiffany by Mitsukoshi
Limited and its affiliated companies ("Mitsukoshi") for distribution in Japan
in TIFFANY & CO. boutiques. Under the agreement with Tiffany by which
Mitsukoshi purchased and distributed TIFFANY & CO. products in Japan (the
"Distribution Agreement"), all sales transactions between Tiffany and
Mitsukoshi were denominated in U.S. Dollars. Registrant recorded wholesale
sales to Mitsukoshi as revenue and Mitsukoshi received the merchandise into
inventory and recorded revenue on the final sale in Japanese Yen to the
ultimate consumer. Mitsukoshi established retail prices for TIFFANY & CO.
merchandise in Japan and bore responsibility for management of inventory and
the risk of currency fluctuations between the Japanese Yen and the U.S. Dollar.
On June 12, 1993, Registrant, through its affiliated companies,
entered into an agreement (the "New Agreement") to realign its business
relationship with Mitsukoshi. Under the New Agreement, Registrant's wholly
owned subsidiary, Tiffany & Co. Japan Inc. ("Tiffany-Japan") assumed
merchandising and marketing responsibilities in the operation of TIFFANY & CO.
boutiques previously operated by Mitsukoshi in its stores and other locations
in Japan. The changeover in responsibilities from the Distribution Agreement
to the New Agreement occurred during the month of July 1993. Tiffany-Japan now
provides merchandising and marketing management and owns substantially all
merchandise held for sale in the boutiques. Mitsukoshi provides and maintains
boutique facilities, staffs the boutiques with retail employees and assumes
credit and certain other risks. Tiffany-Japan pays Mitsukoshi fees aggregating
27% of net retail sales made in such boutiques. Such fees consist of the
following elements: (A) 23% of net retail sales made in such boutiques (the
"Base Fee") is paid for the services and facilities Mitsukoshi provides
Tiffany-Japan in connection with boutique operations (this fee is equivalent to
the fee paid by Tiffany-Japan to other department stores in Japan for
comparable services); and (B) 4% of net retail sales made in such boutiques
(the "Exclusivity Fee") is paid in recognition of the high operating costs in
Tokyo where Mitsukoshi has 5 stores and in consideration of Mitsukoshi's
agreement to: (1) permit Tiffany- Japan to operate a boutique in each existing
location throughout Japan and in all new Mitsukoshi stores opened in Japan
until October 15, 2001; (2) construct and outfit all new boutiques to
Tiffany-Japan's standards; and (3) make certain improvements to the existing
boutique premises. With respect to the sale by Tiffany-Japan of certain
high-value jewelry items repurchased from Mitsukoshi (less than 10% of the
inventory to be repurchased), the Exclusivity Fee does not apply and the Base
Fee is reduced to 5%. Tiffany-Japan also pays Mitsukoshi an incentive fee of
5% of the amount by which boutique sales increase year-to-year, calculated on a
per-boutique basis. In Tokyo, TIFFANY & CO. boutiques may be established only
in Mitsukoshi's stores and TIFFANY & CO. brand jewelry may be sold only in such
boutiques. Tiffany-Japan has, however, reserved certain rights so that it may
open a flagship store in Tokyo. The mutual obligations described in this
paragraph will expire on October 15, 2001.
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In Fiscal 1991, 1992 and 1993, Mitsukoshi's wholesale purchases from
Tiffany constituted, respectively, 23%, 15% and 7% of Registrant's net sales.
The significant decrease in Fiscal 1993 reflects the changeover from the
Distribution Agreement to the New Agreement. Under the New Agreement,
Mitsukoshi no longer purchases TIFFANY & CO. merchandise for sale in Japan.
Instead, Mitsukoshi acts for Tiffany-Japan in the sale of merchandise owned by
Tiffany-Japan and Registrant recognizes as revenues the retail price charged to
the ultimate consumer in Japan. Tiffany-Japan holds inventories for sale,
establishes retail prices, bears the risk of currency fluctuations, provides
one or more brand managers in each boutique, controls merchandising and display
within the boutiques, manages inventory and controls and funds all advertising
and publicity programs with respect to TIFFANY & CO. merchandise.
Because the inventory repurchased and to be repurchased by Tiffany
from Mitsukoshi was previously sold by Tiffany to Mitsukoshi, Registrant has
reversed the sales and related gross profit associated with the repurchase.
Accordingly, in 1993 Registrant recorded a $57.5 million reserve, representing
the provision for product returns; this reduced net income in Registrant's
second fiscal quarter ended July 31, 1993 by approximately $32.7 million, or
$2.07 per share. The establishment of this reserve resulted in a net loss in
such second quarter and in Fiscal 1993. Registrant's carrying value of the
inventory purchased from Mitsukoshi is lower than the purchase price paid
Mitsukoshi because of the reversal of such gross profit. Inventories of
saleable TIFFANY & CO. merchandise owned by Mitsukoshi have been and will be
repurchased by Tiffany-Japan for approximately $115 million as described below.
Approximately $52.5 million of such inventory held by Mitsukoshi in the various
boutiques ("Boutique Inventory") was repurchased during the month of July 1993.
In addition, approximately $62.5 million of TIFFANY & CO. inventory maintained
in Mitsukoshi's Tokyo warehouse and central merchandising facilities ("Central
Inventory") has been and will be repurchased by Tiffany throughout the period
beginning July 1, 1993 and ending February 28, 1998. The price payable for
inventories to be repurchased by Tiffany will be payable in Japanese Yen.1
Mitsukoshi has agreed to accept a deferred payment in respect of $25 million of
the purchase price to be paid by Tiffany for Boutique Inventory. This amount
must be paid in full on February 28, 1998. Interest at the rate of six percent
per annum shall be payable quarterly to Mitsukoshi by Tiffany on the deferred
amount. All other amounts payable by Tiffany for inventory repurchased
pursuant to the New Agreement will be paid forty days following receipt of
inventory.
Under separate agreements, Mitsukoshi operates four FARAONE boutiques
in Mitsukoshi stores in Japan, TIFFANY & CO. boutiques in its department
stores in Hong Kong and Taipei and TIFFANY & CO. boutiques in Honolulu and on
the island of Guam. Tiffany sells merchandise to Mitsukoshi for resale in
these boutiques on a wholesale basis.
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1. For the purposes of this report on Form 10-K, it has been assumed that
110 Japanese yen equal one U.S. dollar.
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In 1989, Mitsukoshi purchased from General Electric Capital
Corporation ("GECC"), 1,500,000 shares of Registrant's Common Stock. As of
March 24, 1994, Mitsukoshi owned 2,135,000 shares, or 13.63% of the
Registrant's Common Stock. Prior to Mitsukoshi's purchase of Registrant's
Common Stock from GECC, Registrant and Mitsukoshi entered into an agreement by
which Mitsukoshi agreed, subject to certain contingencies, not to purchase in
excess of 19.99% of Registrant's issued and outstanding Common shares. This
agreement expires on September 21, 1994.
In 1992, Registrant assumed the operation of four TIFFANY & CO.
boutiques previously operated by Mitsukoshi in third party department stores in
Japan. Registrant now operates eight boutiques in Japan in non-Mitsukoshi
department stores.
Mr. Yoshiaki Sakakura, President and Chief Executive Officer of
Mitsukoshi, was appointed a director of the Registrant on November 15, 1989,
and will continue to serve as a director if elected by Registrant's
stockholders at their annual meeting scheduled to be held on May 19, 1994.
Wholesale distribution of TIFFANY & CO. jewelry and/or watches is also
made through independent distributors in Japan, Europe, the Middle East, Korea,
the Philippines and Saipan.
Tiffany began its ongoing program of international expansion through
proprietary retail stores in 1986 with the establishment of the London store.
The Munich and Zurich stores were opened in 1987 and 1988, respectively. In
1990, the Zurich store was expanded. Stores in Hong Kong at the Peninsula
hotel and at the Landmark center were opened in August 1988 and March 1989,
respectively. In 1990, a store was opened in Taipei, and in 1991 stores in
Singapore (at the Raffles Hotel), Frankfurt and Toronto were opened, and the
London store was expanded. In early Fiscal 1993, a hotel boutique in Berlin,
which had been opened in 1991, was closed. Also in Fiscal 1993, a second store
was opened in Singapore's Ngee Ann City, and the Peninsula hotel store in Hong
Kong was expanded.
Company-operated international TIFFANY & CO. stores and boutiques
range in size from approximately 700 to 13,000 gross square feet and total
approximately 127,000 gross square feet devoted to retail purposes.
In October 1989, Registrant completed the purchase of a controlling
interest in the parent corporation of Faraone, S.p.A. ("Faraone"), a
manufacturing jeweler which operates retail jewelry stores under the FARAONE
tradename in Milan and Florence and offers its products at wholesale to other
retailers in Europe and through Mitsukoshi-operated FARAONE boutiques in Japan.
Faraone also offers TIFFANY & CO. products in its stores and through its
wholesale distribution, and FARAONE products are offered in TIFFANY & CO.
stores in Europe.
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Registrant expects to continue to open stores in locations outside the
United States. However, the timing and success of this program will depend
upon many factors, including Registrant's ability to obtain suitable retail
space on satisfactory economic terms, the extent of consumer demand for TIFFANY
& CO. products in overseas markets and the fact that Tiffany's reputation in
Europe is not yet as firmly established with consumers as it is in the United
States and Japan. TIFFANY & CO. boutiques have now been installed in all
current Mitsukoshi department stores in Japan. Future expansion in Japan will,
to some extent, be dependent upon Mitsukoshi establishing new department
stores. However, under its agreement with Mitsukoshi, Tiffany has retained
certain rights so that it may undertake further development in Japan on its own
initiative, and Tiffany also operates boutiques in stores other than Mitsukoshi
in locations outside of Tokyo.
The following chart details the growth in the Company's stores and
boutiques since 1987 on a worldwide basis:
Worldwide Retail Locations
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Registrant's Subsidiary Companies Independent
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North America and Europe Pacific Rim
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End of
Fiscal: U.S. Canada Europe Japan Elsewhere Mitsukoshi Others Total
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1987 8 0 2 0 0 21 0 31
1988 9 0 3 0 1 21 0 34
1989 9 0 5 0 2 24 0 40
1990 12 0 5 0 3 27 0 47
1991 13 1 7 0 4 38 2 65
1992 16 1 7 7 4 36 4 75
1993 16 1 6 37 5 8 6 79
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Advertising and Promotion
Tiffany regularly advertises its business, primarily in newspapers and
magazines. Cooperative advertising funds are received from certain merchandise
vendors and the Company also provides its domestic and international
third-party distributors with cooperative advertising funds. In Fiscal 1991,
1992, and 1993, Tiffany spent approximately $19.2 million, $19.4 million and
$18.1 million, respectively, on worldwide advertising, net of amounts
contributed by vendors to Tiffany, but inclusive of cooperative advertising
funds contributed by Tiffany to third party distributors.
Public Relations (promotional) activity is also a significant aspect
of Registrant's business. Management believes that Tiffany's image is enhanced
by a program of charity sponsorships, grants and merchandise donations. The
Company also engages in an aggressive program of retail promotions and media
activities to maintain consumer awareness of the Company and its products.
Each year, Tiffany publishes its well-known Blue Book which showcases fine
jewelry and other merchandise. Tiffany's New York window displays, designed by
Gene Moore, are another important aspect of Tiffany's promotional efforts. In
1990, a book by Mr. Moore highlighting the art of window display was published.
In its New York store, Tiffany displays table settings created by leading
interior decorators and by prominent hosts and hostesses. John Loring,
Tiffany's Design Director, is the author of several books featuring Tiffany
products. Registrant considers these and other promotional efforts important
in maintaining Tiffany's image as an arbiter of taste and style.
Trademarks
The designations TIFFANY(R) and TIFFANY & CO.(R) are the principal
trademarks of Tiffany, as well as serving as tradenames. Tiffany has obtained
and is the proprietor of trademark registrations for TIFFANY and TIFFANY & CO.
for a variety of product categories in the United States and in other
countries. Over the years, Tiffany has maintained a program to protect its
trademarks and has instituted legal action where necessary to prevent others
either from registering or using marks which are considered to create a
likelihood of confusion with the Company or its products. Tiffany has been
generally successful in such actions and management considers that its United
States trademark rights in TIFFANY and TIFFANY & CO. are strong. However, use
of the designation TIFFANY by third parties (often small companies) on
unrelated goods or services, often transient in nature, may not come to the
attention of Tiffany or may not rise to a level of concern warranting legal
action. Also, trademark rights are territorial in nature and, under the laws
of foreign jurisdictions, Tiffany's rights are not as broad as in the United
States. Tiffany does not claim to be the sole person entitled to use the name
TIFFANY in all product categories throughout the world; third parties have
registered the name TIFFANY in the United States in the food services category,
and in certain foreign
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countries in certain product categories, including the categories for
fragrance, cosmetics, jewelry, eyeglass frames, clothing and tobacco products.
Designer Licenses
Tiffany has been the sole licensee for jewelry designed by Ms.
Peretti, Ms. Picasso and the late Mr. Schlumberger since 1974, 1980 and 1956,
respectively. In 1992, Tiffany acquired trademark and other rights necessary
to sell the designs of the late Mr. Schlumberger under the TIFFANY-SCHLUMBERGER
trademark. Ms. Peretti and Ms. Picasso retain ownership of copyrights for
their designs and of their trademarks and exercise approval rights with respect
to important aspects of the promotion, display, manufacture and merchandising
of their designs and Tiffany is required by contract to devote a portion of its
advertising budget to the promotion of their respective products; each is paid
a royalty by Tiffany for jewelry and other items designed by them and sold
under their respective names. Written agreements exist between Ms. Peretti and
Tiffany and between Ms. Picasso and Tiffany but may be terminated by either
party following six months notice to the other party. Tiffany is the sole
retail source for merchandise designed by Ms. Peretti worldwide; however, she
has reserved by contract the right to appoint other distributors in markets
outside the United States.
The designs of Ms. Peretti accounted for 17%, 14% and 14% of Tiffany's
net sales in Fiscal 1991, 1992 and 1993, respectively. Merchandise designed by
Ms. Picasso accounted for an aggregate of 4%, 5% and 5% of Tiffany's net sales
in Fiscal 1991, 1992 and 1993, respectively. Registrant's operating results
could be adversely affected were it to cease to be a licensee of one or more of
these designers or should its degree of exclusivity in respect of their designs
be diminished.
Merchandise Purchasing, Manufacturing and Raw Materials
Merchandise offered for sale by Tiffany is supplied from the Company's
workshops in New York City and Pleasantville, New York; Parsippany, New Jersey;
Attleboro, Massachusetts; Salem, West Virginia; Lussy-sur-Morges, Switzerland;
Paris, France; and Milan, Italy and through purchases and consignments from
others. The following table shows Tiffany's sources of merchandise, based on
cost, for the periods indicated:
Fiscal Years Ended January 31,
1992 1993 1994
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Produced by Tiffany 25 % 29 % 27 %
Purchased from others 75 71 73
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Total 100 % 100 % 100 %
Approximately 42% of the merchandise purchased from others in Fiscal 1993 was
manufactured outside the United States.
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Gems and precious metals used in making Tiffany jewelry may be
purchased from a variety of sources. For the most part, purchases of such
materials are from suppliers with which Tiffany enjoys long-standing
relationships. Tiffany believes that there are numerous alternative sources
for gems and precious metals and that the loss of any single supplier would not
have a material adverse effect on its operations.
Diamond jewelry accounted for approximately 17%, 16% and 23% of
Tiffany's net sales for Fiscal 1991, 1992 and 1993, respectively. Tiffany does
not purchase uncut diamonds and does not anticipate any material adverse change
in the availability of cut and polished diamonds in general. The supply and
price of diamonds in the principal world markets are significantly influenced
by a single entity, the Central Selling Organization (the "CSO"), a marketing
arm of De Beers Centenary AG, a Swiss corporation. The CSO has traditionally
controlled the marketing of approximately 75-80% of the world's supply of uncut
diamonds and sells uncut diamonds to worldwide diamond cutters from its London
office approximately 10 times a year in quantities and at prices determined in
its sole discretion. Tiffany does not purchase diamonds directly from the CSO.
The availability of diamonds to the CSO and Tiffany's suppliers may be, to some
extent, dependent on the political situation in diamond-producing countries,
such as South Africa (which currently accounts for approximately 11% of the
world diamond output), Australia, Brazil, Botswana, the former Soviet Union and
Zaire, and on the continuance of the prevailing supply and marketing
arrangements for uncut diamonds. Sustained interruption in the supply of uncut
diamonds from the producing countries could adversely affect Tiffany and the
retail jewelry industry as a whole.
Finished jewelry is purchased from more than 100 manufacturers, most
of which have long-standing relationships with Tiffany. Tiffany believes that
there are alternative sources for most jewelry items; however, due to the
craftsmanship involved in certain designs, Tiffany would have difficulty in
finding readily available alternatives in the short term.
TIFFANY & CO. brand clocks and components for watches are manufactured
by third party suppliers. Some watches are also assembled by third parties.
Tiffany contracts with a single manufacturer to produce its silver
flatware patterns from Tiffany's proprietary dies by use of Tiffany's
traditional manufacturing techniques. Likewise, engraved stationery is
purchased from a single manufacturer. Loss of either manufacturer could result
in the unavailability of silver flatware or engraved stationery, as the case
may be, during the period necessary for Tiffany to arrange for new production.
As Registrant's sales have grown, management has increasingly begun to
focus its attention on merchandise supply issues and has acquired additional
merchandise manufacturing capabilities. In Fiscal 1989, the Company completed
the acquisition of the assets and business and assumed certain liabilities of
Howard H. Sweet & Son, Inc., a manufacturer of gold and silver jewelry and
chains located in Attleboro, Massachusetts
- - - PAGE 13 -
14
("Sweet"). Tiffany operates the Sweet business as a separate subsidiary under
the name and trademark HOWARD H. SWEET & SON. In Fiscal 1990, Tiffany
acquired the assets and business of McTeigue & Co., a manufacturer of gold
jewelry located in Pleasantville, New York. In Fiscal 1991 Tiffany completed
the acquisition of the business of the late Camille Le Tallec. Located in
Paris, this workshop decorates hand-painted tableware. Also in Fiscal 1991,
the Company established a watch assembly, engineering and testing operation in
Lussy-sur-Morges, Switzerland. This operation affords Tiffany greater control
over, and flexibility with respect to, the watch procurement process, and
permits volume purchases of certain watch components, including watch
movements. In Fiscal 1992, Tiffany acquired the assets and business of Judel
Glassware Co., Inc., which produces crystal glassware in Salem, West Virginia.
Manufacturing capacity at this facility will be increased to provide an
additional crystal production resource for the Company. Registrant may seek
additional manufacturing capacity in certain key product categories, although
there are no current plans to do so.
Competition
Registrant is faced with substantial competition in all areas in which
it is active, in most cases from companies that provide competition for only a
portion of its diverse lines of merchandise. Competitors and the intensity of
competition vary across product lines, geographic locations and channels of
distribution. In the United States, TIFFANY & CO. retail stores must compete
with jewelers and other retailers whose international reputations for style,
integrity and expertise are well established. Tiffany must also compete with
jewelers and other retailers who compete primarily on the basis of price.
However, while price promotion is common in the jewelry industry, Tiffany does
not compete through price promotion but rather on the basis of value -- the
quality or its products and designs -- and the service provided by its store
personnel.
The international marketplace for TIFFANY & CO. products is
characterized by highly competitive conditions. Although Registrant believes
that the name TIFFANY & CO. is known and respected internationally, and
although Tiffany did operate retail stores in London and Paris prior to World
War II, Tiffany did not have a retail presence in Europe in the post-war era
until 1986. Accordingly, consumer awareness of Tiffany and its products is not
as strong in Europe as in the United States or in Japan, where Tiffany has
distributed its products for many years. Registrant expects that its overseas
stores have and will continue to experience intense competition from
established retailers in international cities where TIFFANY & CO. stores are
and may eventually be located.
In direct marketing, the TIFFANY & CO. reputation and diverse product
line are believed to be favorable competitive factors; nonetheless, highly
competitive conditions prevail. A growing number of direct sellers compete for
access to the same mailing lists of known purchasers of luxury goods, and
mailing and production costs are increasing. In marketing to businesses,
Tiffany faces numerous competitors who sell a wide variety of products.
- PAGE 14 -
15
Employees
As of January 31, 1994, the Registrant's subsidiary corporations
employed an aggregate of approximately 3,133 full-time and part-time persons.
Of those employees, 2,731 were employed in the United States. Of Tiffany's
total employees, approximately 1,178 persons are salaried employees, 415 are
engaged in manufacturing and 1,188 are retail store personnel. None of the
Company's employees is represented by a union. Registrant believes that
relations with its employees are good.
ITEM 2. PROPERTIES
All of Tiffany's principal operating facilities are leased although
Registrant does own a small glass manufacturing facility in Salem, West
Virginia.
New York Store
Tiffany leases the land and building at 727 Fifth Avenue in New York
City for use as its main retail store and executive offices. The building was
constructed in 1940. Approximately 32,450 gross square feet of this 124,000
square foot building are devoted to retail selling purposes, with the balance
devoted to executive and administrative offices, jewelry production and
storage. The building at 727 Fifth Avenue was designed to be a retail store
for Tiffany and Tiffany believes it is well configured and located for this
function.
The initial lease term for the New York store building expires on
October 31, 1994 but may, subject to the terms of the lease, be renewed for
five successive terms of five years each. Basic rent for the building is $5.96
million per annum. That rate will remain effective until the expiration of the
initial lease term. Tiffany has given notice of renewal for the first
five-year renewal term. After October 31, 1994, when this renewal term
commences, the basic rent will be increased by the greater of (i) a
proportional increase in accordance with a consumer price index or (ii) the
fair rental value of the property as determined by an appraisal proceeding.
Tiffany has not yet been advised as to its landlord's position as to rent
during the renewal term. Tiffany must also pay all costs of operating the
building, including real property taxes, in addition to the basic rent.
Distribution Center
The Company's distribution facility in Parsippany, New Jersey is 16
years old and consists of approximately 135,000 square feet of space devoted to
warehousing, receipt and distribution of merchandise, order processing,
silversmithing and offices. The initial term of the net lease covering this
facility expires on May 31, 1995 and may be renewed
- - - PAGE 15 -
16
thereafter for two successive periods of five years each at a fair market
rental rate. The current basic rental is approximately $7.06 per square foot
per annum. In April, 1993 the Company entered into a lease for 51,000 square
feet of warehouse space in Pine Brook, New Jersey, a town adjacent to
Parsippany. With the addition of this bulk storage and overflow capacity,
management believes that the Parsippany distribution facility will continue to
be adequate but not optimal for the most efficient distribution of the
Company's products. Accordingly, management is developing plans to relocate
distribution and warehouse operations to a single facility by late 1996 or
early 1997, and to combine existing New Jersey office, manufacturing and
distribution support facilities into that same site.
Branch and Subsidiary Retail Store Leases
Set forth below is the expiration date for each of Tiffany's existing branch
and subsidiary retail store leases (and, where applicable, optional renewal
terms): Phipps Plaza Shopping Center, Atlanta, GA, July 31, 2000 (two five-year
terms); Two Rodeo Drive, Beverly Hills, CA, October 7, 2005 (two five-year
terms); Copley Place, Boston, MA, July 31, 2009 (two five-year terms); 715
North Michigan Avenue, Chicago, IL, September 30, 1997 (one 10-year term);
South Coast Plaza, Costa Mesa, CA, January 31, 2004 (one five-year term); The
Galleria, Dallas, TX, October 31, 1997 (one five-year term); Union Square, San
Francisco, CA, October 29, 2006 (one ten-year term); Galleria Post Oak Shopping
Center, Houston, TX, September 30, 2007 (one five-year term); 259 Worth Avenue,
Palm Beach, FL, May 31, 2007 (two five-year terms); The Bellevue, Philadelphia,
PA, November 16, 2005 (one five-year term); The Paladion, San Diego, CA, May
31, 2007; Fairfax Square, Vienna, VA, March 31, 2000 (two five-year terms); The
Somerset Collection, Troy, MI, September 30, 2007; Ala Moana Center, Honolulu,
HI, January 31, 2000; Bal Harbour Shops, Bal Harbour, FL, May 31, 2003; 20
Goethestrasse, Frankfurt, Germany, January 31, 2001 (one 10-year term); 25 Old
Bond Street, London, England, March 24, 2016; Residenzstrasse 11, Munich,
Germany, June 30, 1994 (one four-year term); The Landmark, Hong Kong, November
15, 1994; The Peninsula, Kowloon, Hong Kong, February 28, 1995; Raffles Hotel,
Singapore, September 16, 1994 (one three- year term); Regent Hotel, Taipei,
Taiwan, October 6, 1995 (two five-year terms); 85 Bloor Street, Toronto,
Canada, October 15, 2006 (one seven-year term); Bahnhofstrasse 14, Zurich,
Switzerland, September 30, 2000; and Ngee Ann City, Singapore, September 15,
1999 (one year renewal term).
In addition to the leases shown above, Tiffany has entered into a
fifteen-year lease for a 10,000 square foot retail location at the Oakbrook
Center, Oakbrook, Illinois, a ten-year lease for an 8,400 square foot retail
location at The Mall at Short Hills, Short Hills, New Jersey, and a 5,400
square foot retail location at Chevy Chase Plaza, Chevy Chase, Maryland. The
Oakbrook Center store is currently under construction and is expected to open
in September 1994. Construction of The Mall at Short Hills location is
expected to begin in Spring 1995 and to be completed by September 1995.
Construction of the Chevy Chase, Maryland store is expected to commence no
later than December 1995 and to be completed within four months.
- PAGE 16 -
17
Registrant also operates two FARAONE stores in Italy, one in Milan and
one in Florence. The Milan store is located on Via de Montenapoleone. The
present lease expires on March 31, 1999, but may, subject to certain conditions
imposed by Italian law, be renewed for an additional term of six years. The
Florence store is located on Via Tornabuoni. The present lease expires on June
30, 1997 and is renewable for an additional term of six years, subject to the
same conditions imposed by law upon the Milan lease.
ITEM 3. LEGAL AND ENVIRONMENTAL PROCEEDINGS
Registrant and Tiffany are from time to time involved in routine
litigation incidental to the conduct of Tiffany's business, including
proceedings to protect its trademark rights, litigation instituted by persons
alleged to have been injured upon premises within Registrant's control and
litigation with present and former employees. Registrant believes that no
litigation currently pending to which it or Tiffany is a party or to which its
properties are subject will have a material adverse effect on its results of
operations or financial condition.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the
fourth quarter of the fiscal year ended January 31, 1994.
- - - PAGE 17 -
18
EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers of Registrant are:
NAME AGE POSITION YEAR JOINED TIFFANY
William R. Chaney 61 Chairman of the Board of Directors, President 1980
and Chief Executive Officer
Michael J. Kowalski 42 Executive Vice President 1983
James E. Quinn 42 Executive Vice President 1986
Jeanne B. Daniel 38 Senior Vice President - Merchandising 1986
Patrick B. Dorsey 43 Senior Vice President - General Counsel and 1985
Secretary
James N. Fernandez 38 Senior Vice President - Finance 1983
and Chief Financial Officer
Marsha S. Gewirtzman 43 Senior Vice President - Corporate 1987
Fernanda K. Gilligan 47 Senior Vice President - Public Relations 1984
John R. Loring 54 Senior Vice President - Design Director 1979
Diana Lyne 40 Senior Vice President - Marketing 1984
Thomas J. O'Neill 41 Senior Vice President - International -Far East 1985
Dale S. Strohl 57 Senior Vice President - Operations 1984
Larry M. Segall 39 Vice President, Treasurer and Controller 1985
William R. Chaney. Mr. Chaney, Chairman, President and Chief Executive Officer
of Tiffany since August 1984, joined Tiffany in January 1980 as a member of its
Board. Prior to 1984 he served as an executive officer of Avon Products Inc.
Mr. Chaney also serves on the board of directors of the Bank of New York.
- PAGE 18 -
19
Michael J. Kowalski. Mr. Kowalski has held a variety of merchandising
management positions since joining Tiffany in 1983 as Director of Financial
Planning. On March 19, 1992 he was appointed Executive Vice President with
overall responsibility in the following areas: merchandising, marketing,
advertising, public relations and product design.
James E. Quinn. Mr. Quinn joined the Company in July 1986 as Vice President of
branch sales for the Company's corporate sales operations. He was promoted to
his current position as Executive Vice President responsible for all United
States retail and corporate sales on March 19, 1992 and assumed responsibility
for all North American retail and corporate sales in 1994.
Jeanne B. Daniel. Ms. Daniel has served in a variety of merchandising
management positions since joining the Company in 1986 as a merchandising
management associate. She was appointed Senior Vice President with
responsibility for Merchandising Group I (jewelry) in October 1992.
Patrick B. Dorsey. Mr. Dorsey joined the Company in July 1985 as General
Counsel and Secretary.
James N. Fernandez. Mr. Fernandez joined Tiffany in October 1983 and has held
various positions in financial planning and management since that time. He was
appointed to his current position in April 1989.
Marsha S. Gewirtzman. Ms. Gewirtzman joined the Company in September 1987 in a
sales management capacity within the corporate sales division. On March 19,
1992 she was appointed Senior Vice President with responsibility for corporate
sales.
Fernanda K. Gilligan. Mrs. Gilligan joined Tiffany in October 1984 as Director
of Retail Marketing. She assumed her current responsibilities in January 1990.
John R. Loring. Mr. Loring has served as Design Director since joining Tiffany
in 1979.
Diana Lyne. Ms. Lyne joined Tiffany in July 1984 as Director of Advertising.
She assumed her current responsibilities in January 1990.
Thomas J. O'Neill. Dr. O'Neill joined Tiffany in February 1985 as a management
associate. He assumed responsibility for sale in the Pacific Rim in March 1992
and assumed responsibility for sales in the Mid-East in 1994.
Dale S. Strohl. Mr. Strohl assumed his current responsibilities in September
1984.
Larry M. Segall. Mr. Segall joined Tiffany in 1985 as Controller. He was
appointed Treasurer-Controller on January 21, 1993.
- - - PAGE 19 -
20
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Registrant's Common Stock is traded on the New York Stock Exchange. In
consolidated trading, the high and low sales prices per share for shares of
such Common Stock for Fiscal 1992 were:
Fiscal 1992 High Low
First Fiscal Quarter $52.88 $42.00
Second Fiscal Quarter $44.13 $23.25
Third Fiscal Quarter $29.25 $22.63
Fourth Fiscal Quarter $35.38 $25.00
In consolidated trading, the high and low sale prices per share for shares of
such Common Stock for Fiscal 1993 were:
Fiscal 1993 High Low
First Fiscal Quarter $32.63 $24.13
Second Fiscal Quarter $33.50 $26.38
Third Fiscal Quarter $33.25 $26.25
Fourth Fiscal Quarter $38.00 $29.13
On March 24, 1994, the high and low selling prices quoted on such
exchange were $33.625 and $33.250 respectively. On March 24, 1994 there were
2,268 record holders of Registrant's Common Stock.
It is Registrant's policy to pay a quarterly dividend of $.07 per share
of Common Stock, subject to declaration of such dividend by Registrant's Board
of Directors. In Fiscal 1992, dividends of $.07 per share were paid on April
10, 1992, July 10, 1992, October 9, 1992 and January 8, 1992. In Fiscal 1993,
dividends of $.07 per share were paid on April 9, 1993, July 9, 1993, October
8, 1993 and January 10, 1994.
In calculating the aggregate market value of the voting stock held by
non-affiliates of the Registrant shown on the cover page of this Report on Form
10-K, 2,135,000 shares of Registrant's Common Stock beneficially owned by
Mitsukoshi Limited and by the executive officers and directors of the
Registrant (exclusive of shares which may be acquired on exercise of employee
stock options) were excluded, on the assumption that certain of those persons
could be considered "affiliates" under the provisions of Rule 405 promulgated
under the Securities Act of 1933.
- PAGE 20 -
21
ITEM 6. SELECTED FINANCIAL DATA
Incorporated by reference from Registrant's Annual Report to Stockholders for
the fiscal year ended January 31, 1994.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
Incorporated by reference from Registrant's Annual Report to Stockholders for
the fiscal year ended January 31, 1994.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Incorporated by reference from Registrant's Annual Report to Stockholders for
the fiscal year ended January 31, 1994.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
NONE
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Incorporated by reference from Registrant's Proxy Statement dated April 7,
1994, pages 2-5 and 7.
ITEM 11. EXECUTIVE COMPENSATION
Incorporated by reference from Registrant's Proxy Statement dated April 7,
1994, pages 8-17.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Incorporated by reference from Registrant's Proxy Statement dated April 7,
1994, pages 5-7.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Incorporated by reference from Registrant's Proxy Statement dated April 7,
1994, pages 13-14. See also Part I, Item 1. Distribution and Marketing,
International Retail, above, for a discussion of Registrant's business
relationship with Mitsukoshi, Ltd., a holder of in excess of 10% of
Registrant's issued and outstanding Common Stock.
- - - PAGE 21 -
22
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K
(a) List of Documents Filed As Part of This Report:
1. Financial Statements:
Data incorporated by reference from
the 1993 Annual Report to Shareholders
of Tiffany & Co. and Subsidiaries:
Report of Independent Accountants
(See page 31 of this Form 10-K)
Consolidated balance sheets
as of January 31, 1994 and 1993
Consolidated statements of operations
for the years ended January 31, 1994, 1993 and 1992
Consolidated statements of stockholders' equity
for the years ended January 31, 1994, 1993 and 1992
Consolidated statements of cash flows
for the years ended January 31, 1994, 1993 and 1992
Notes to consolidated financial statements
2. Financial Statement Schedules:
The following financial statement schedules should be read in
conjunction with the consolidated financial statements incorporated by
reference herein:
VIII. Valuation and qualifying accounts and reserves.
IX. Short-term borrowings.
X. Supplementary income statement information.
All other schedules have been omitted since they are either not applicable or
not required, or because the information required is included in the
consolidated financial statements and notes thereto.
- PAGE 22 -
23
3. Exhibits:
The following exhibits have been filed with the Securities and
Exchange Commission but are not attached to copies of this Form 10-K other than
complete copies filed with said Commission and the New York Stock Exchange:
Exhibit Description
3.1 Restated Certificate of Incorporation of Registrant. Incorporated
by reference from Exhibit 3.1 to Registrant's Report on Form 8-K
dated June 23, 1989.
3.2 By-Laws of Registrant (as last amended April 19, 1993).
4.1 Form of Rights Agreement Dated as of November 17, 1988 by and
between Registrant and Manufacturers Hanover Trust Company, as
Rights Agent. Incorporated by reference from Exhibit 4.1 to
Registrant's Report on Form 8-K dated November 18, 1988.
4.2 Amendment to Rights Agreement dated as of September 21, 1989 by
and between Registrant and Manufacturers Hanover Trust Company, as
Rights Agent. Incorporated by reference from Exhibit 4.2 to
Registrant's Report on Form 8-K dated September 28, 1989.
4.3 Indenture dated as of March 15, 1991 between Registrant and
Manufacturers Hanover Trust Company, as Trustee, in respect of
Registrant's 6-3/8% Convertible Subordinated Debentures Due 2001.
Incorporated by reference from Exhibit 4.3 to Registrant's Report
on Form 10-K for the fiscal year ended January 31, 1992 and dated
April 10, 1992.
10.5 Designer Agreement between Tiffany and Paloma Picasso dated April
4, 1985. Incorporated by reference from Exhibit 10.5 filed with
Registrant's Registration Statement on Form S-1, Registration No.
33-12818 (the "Registration Statement").
10.15 Lease between Tiffany and Creef Gem Corporation dated May 24, 1985
for 801 Jefferson Road, Parsippany, N.J. Incorporated by
reference from Exhibit 10.15 to the Registration Statement.
10.16 Lease dated October 15, 1984 between Avon Export Corporation and
Tiffany for 727 Fifth Avenue, New York, N.Y. Incorporated by
reference from Exhibit 10.16 to the Registration Statement.
- - - PAGE 23 -
24
Exhibit Description
10.53 Distribution and Manufacturing Services Agreement between Chanel,
Inc. and Tiffany and Company dated as of January 1, 1993.
Incorporated by reference from Exhibit 10.53 filed with
Registrant's Report on Form 10-K for the fiscal year ended January
31, 1993 and dated April 12, 1993.
10.54 Letter Agreement dated March 4, 1987 between Tiffany and Elsa
Peretti. Incorporated by reference from Exhibit 10.54 to the
Registration Statement.
10.56 Purchase Agreement dated as of July 18, 1988, by and between
Tiffany and Chanel, Inc. Incorporated by reference from Exhibit
28.2 to the Form S-8.
10.64 Distribution Agreement dated November 28, 1988 by and between
Tiffany and Mitsukoshi (U.S.A.), Inc. in respect of Hawaii.
Incorporated by reference from Exhibit 10.64 to Registrant's
Report on Form 10-K for the fiscal year ended January 31, 1989 and
dated April 21, 1989.
10.68 Form of credit agreement entered into with certain banks.
Incorporated by reference from Exhibit 10.68 to Registrant's
Report on Form 10-Q for the fiscal quarter ended July 31, 1989 and
dated September 13, 1989.
10.69 Form of credit agreement entered into with certain banks.
Incorporated by reference from Exhibit 10.69 to Registrant's
Report on Form 10-Q for the fiscal quarter ended October 31, 1989
and dated December 14, 1989.
10.82 Form of Amendment to Credit Agreement made as of April 1, 1990
with certain banks. The following banks have entered into an
Amendment to Credit Agreement No. 2: BBL Bank Brussels Lambert,
New York Branch; CIBC, Inc.; Credit Suisse; The Fuji Bank,
Limited, Fuji Bank (Schweiz) AG, and The Fuji Bank and Trust
Company; Irving Trust Company; United Jersey Bank. Incorporated
by reference from Exhibit 10.82 to Registrant's Report on Form
10-Q for the fiscal quarter ending April 30, 1990 and dated June
13, 1990.
10.89 Subscription Agreement in respect of Registrant's 6-3/8%
Convertible Subordinated Debentures due 2001, dated March 8, 1991
among Lehman Brothers International Limited, Credit Suisse First
Boston Limited, Goldman Sachs International Limited, Merrill Lynch
International Limited, The Nikko Securities Co., (Europe) Ltd.,
Paribas Limited, Robertson, Stephens & Company, UBS Phillips &
Drew Securities Limited. Incorporated by reference from Exhibit
10.89 to Registrant's Report on Form 10-K for the fiscal year
ended January 31, 1991.
- PAGE 24 -
25
Exhibit Description
10.99 Form of Amendment to Credit Agreement made as of January 31, 1992
with certain banks. The following banks have entered into an
Amendment to Credit Agreement No. 3: BBL Bank Brussels Lambert,
New York Branch; Credit Suisse; The Fuji Bank, Limited, Fuji Bank
(Schweiz) AG and The Fuji Bank and Trust Company; Bank of New
York; United Jersey Bank. Incorporated by reference from Exhibit
10.99 to Registrant's Report on Form 10-K for the fiscal year
ended January 31, 1992 and dated April 10, 1992.
10.101 Form of Note Purchase Agreement, including the form of 7.52%
Senior Notes due 2003 issued thereunder at par by Registrant on
January 31, 1993 for an aggregate principal amount of $51,500,000.
Incorporated by reference from Exhibit 10.101 filed with
Registrant's Report on Form 10-K for the fiscal year ended January
31, 1993 and dated April 12, 1993.
10.102 Master Agreement (interest rate transfers "Swap Transactions")
dated January 26, 1993 between Lehman Brothers Special Financing
Inc. and Registrant, and confirmation of Swap Transaction dated
February 1, 1993 for notional amount $50 million. Incorporated by
reference from Exhibit 10.102 filed with Registrant's Report on
Form 10-K for the fiscal year ended January 31, 1993 and dated
April 12, 1993.
10.110 Inventory Purchase Agreement by and between Tiffany, Tiffany-Japan
(Delaware) Inc., and Mitsukoshi dated June 25, 1992. Incorporated
by reference from Exhibit 10.110 filed with Registrant's Report on
Form 10-K for the fiscal year ended January 31, 1993 and dated
April 12, 1993.
10.111 Agreement made June 12, 1993 by and between Tiffany-Japan
(Delaware) Inc., Tiffany and Mitsukoshi Limited. Incorporated by
reference from Exhibit 10.111 filed with Registrant's Report on
Form 8-K dated June 12, 1993.
10.112 Amendment No.1 To Distribution Agreement (Oahu, Hawaii) made with
respect to Distribution Agreement made the 28th day of November
1988 by and between Tiffany and Mitsukoshi (U.S.A.), Inc. (see
Exhibit 10.64 above) entered into as of December 13, 1993 and
Amendment No. 1 to License Agreement (Oahu, Hawaii) made with
respect to the License made the 28th day of November 1988 by and
between Tiffany and Mitsukoshi (U.S.A.), Inc. (see Exhibit 10.64
above) entered into as of December 13, 1993.
11.1 Statement re Computation of Per Share Earnings.
- - - PAGE 25 -
26
Exhibit Description
13.1 Annual Report to Stockholders for Fiscal Year Ended January 31,
1994 (pages 10 through 27 of such Annual Report have been filed in
electronic format).
21.1 Subsidiaries of Registrant.
23.1 Consent of Coopers & Lybrand, independent accountants.
28.1 Form of Agreement in Respect of Tiffany & Co. Shares dated
September 21, 1989 between Registrant and Mitsukoshi Limited.
Incorporated by reference from Exhibit 28.1 to Registrant's Report
on Form 8-K dated September 21, 1989.
Executive Compensation Plans and Arrangements
Exhibit Description
10.2 Registrant's 1985 Stock Option Plan and forms of incentive stock
option agreement and stock option agreement, as last amended on
January 18, 1990. Incorporated by reference from Exhibit 10.3 to
Registrant's Report on Form 10-K for the fiscal year ended January
31, 1990 and dated April 13, 1990.
10.3 Registrant's 1986 Stock Option Plan and form of stock option
agreement, as last amended on March 19, 1992. Incorporated by
reference from Exhibit 10.3 to Registrant's Report on Form 10-Q
for the fiscal quarter ended April 30, 1992 and dated June 11,
1992.
10.25 Deferred Compensation Agreement between William R. Chaney and
Tiffany and Company dated December 31, 1989. Incorporated by
reference from Exhibit 10.25 to Registrant's Report on Form 10-K
for the fiscal year ended January 31, 1990 and dated April 13,
1990.
10.49 Form of Indemnity Agreement, approved by Board of Directors of
March 19, 1987. Incorporated by reference from Exhibit 10.49 to
the Registration Statement.
10.60 Registrant's 1988 Director Stock Option Plan and form of Stock
Option agreement. Incorporated by reference from Exhibit 10.60 to
Registrant's Report on Form 10-K for the fiscal year ended January
31, 1988 and dated April 18, 1988.
10.113 Tiffany and Company Pension Plan, as last amended February 16,
1994.
- PAGE 26 -
27
Exhibit Description
10.114 1994 Tiffany and Company Supplemental Retirement Income Plan.
10.105 Group Long Term Disability Insurance Policy issued by The Mutual
Benefit Life Insurance Company. Policy Number: G53,152.
Incorporated by reference from Exhibit 10.105 filed with
Registrant's Report on Form 10-K for the fiscal year ended January
31, 1993 and dated April 12, 1993.
10.106 Tiffany and Company Executive Deferral Plan. Incorporated by
reference from Exhibit 10.106 filed with Registrant's Report on
Form 10-K for the fiscal year ended January 31, 1993 and dated
April 12, 1993.
10.115 1994 Form of Split Dollar Life Insurance Agreement entered into by
Tiffany and Company and Executive Officers including form of
Assignment of Life Insurance Policy as Collateral.
10.108 Tiffany & Co. Retirement Plan for Non-Employee Directors.
Incorporated by reference from Exhibit 10.108 filed with
Registrant's Report on Form 10-K for the fiscal year ended January
31, 1993 and dated April 12, 1993.
10.109 Summary of informal incentive cash bonus plan for managerial
employees. Incorporated by reference from Exhibit 10.109 filed
with Registrant's Report on Form 10-K for the fiscal year ended
January 31, 1993 and dated April 12, 1993.
REGISTRANT WILL FURNISH COPIES OF ANY OF THE FOREGOING EXHIBITS TO ANY
REGISTERED HOLDER OF THE REGISTRANT'S COMMON STOCK UPON PAYMENT OF A FEE OF
$.15 PER PAGE FURNISHED, WHICH FEE REPRESENTS REGISTRANT'S EXPENSES IN
FURNISHING SUCH EXHIBIT.
(b) Reports on Form 8-K.
On December 28, 1993, Registrant filed a Report on Form 8-K
reporting that Registrant had announced its preliminary, unaudited sales
figures for the period November 1 to December 25, 1993. The text of
Registrant's announcement was included in the Report.
- - - PAGE 27 -
28
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
TIFFANY & CO.
(Registrant)
Date: April 7, 1994 By: /s/ William R. Chaney
------------------------------
William R. Chaney
Chairman of the Board and President
- PAGE 28 -
29
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated.
Date: April 7, 1994 By: /s/ William R. Chaney
------------------------------
William R. Chaney
Chairman of the Board and President
(principal executive officer)
(director)
Date: April 7, 1994 By: /s/ James N. Fernandez
------------------------------
James N. Fernandez
Senior Vice President-Finance
(principal financial officer)
Date: April 7, 1994 By: /s/ Larry M. Segall
------------------------------
Larry M. Segall
Vice President
(principal accounting officer)
Date: April 7, 1994 By: /s/ Jane A. Dudley
------------------------------
Jane A. Dudley
Director
Date: April 7, 1994 By: /s/ Samuel L. Hayes, III
------------------------------
Samuel L. Hayes, III
Director
Date: April 7, 1994 By: /s/ Charles K. Marquis
------------------------------
Charles K. Marquis
Director
Date: April 7, 1994 By: /s/ Yoshiaki Sakakura
------------------------------
Yoshiaki Sakakura
Director
Date: April 7, 1994 By: /s/ William A. Shutzer
------------------------------
William A. Shutzer
Director
Date: April 7, 1994 By: /s/ Geraldine Stutz
------------------------------
Geraldine Stutz
Director
- - - PAGE 29 -
30
(LETTERHEAD)
REPORT OF INDEPENDENT ACCOUNTANTS
----
The Shareholders and
Board of Directors of
Tiffany & Co.:
Our report on the consolidated financial statements of Tiffany & Co. and
Subsidiaries has been incorporated by reference in this Form 10-K from Page 27
of the 1993 Annual Report to Shareholders of Tiffany & Co. and Subsidiaries.
In connection with our audits of such financial statements, we have also
audited the related financial statement schedules listed in Item 14(a) of this
Form 10-K.
In our opinion, the financial statement schedules referred to above, when
considered in relation to the basic consolidated financial statements taken as a
whole, present fairly, in all material respects, the information required to be
included therein.
/s/ Coopers & Lybrand
New York, New York
March 7, 1994
31
TIFFANY & CO. AND SUBSIDIARIES
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
__________________________________________________________________________________________________________________
Column A Column B Column C Column D Column E
- - ------------------------------------------------------------------------------------------------------------------
Additions
-----------------------------
Balance at Charged to
beginning costs and Charged to Balance at end
Description of period expenses other accounts Deductions of period
- - ------------------------------------------------------------------------------------------------------------------
Year Ended
January 31, 1994:
Reserves deducted from
assets:
Accounts receivable
allowances principally
doubtful accounts $7,292,659 $3,119,873 $(3,000,000)(a) $3,242,315(b) $4,170,217
Allowance for inventory
liquidation and
obsolescence 3,527,704 3,833,000 - 298,828(c) 7,061,876
Allowance for inventory
shrinkage 2,150,000 2,573,852 - 2,688,494(d) 2,035,358
LIFO Reserve 6,871,000 1,599,000 - - 8,470,000
___________________
(a) Reclassified to the product return reserve in connection with the
Company's realignment of its business in Japan.
(b) Uncollectible accounts written off.
(c) Liquidation of inventory previously written down to market.
(d) Physical inventory losses.
32
TIFFANY & CO. AND SUBSIDIARIES
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
__________________________________________________________________________________________________________________
Column A Column B Column C Column D Column E
- - ------------------------------------------------------------------------------------------------------------------
Additions
-----------------------------
Balance at Charged to
beginning costs and Charged to Balance at end
Description of period expenses other accounts Deductions of period
- - ------------------------------------------------------------------------------------------------------------------
Year Ended
January 31, 1993:
Reserves deducted from
assets:
Accounts receivable
allowances principally
doubtful accounts $4,459,864 $4,789,017 $ - $1,956,222(a) $7,292,659
Allowance for inventory
liquidation and
obsolescence 1,933,390 2,019,721 - 425,407(b) 3,527,704
Allowance for inventory
shrinkage 1,594,000 4,194,954 - 3,638,954(c) 2,150,000
LIFO Reserve 6,521,000 350,000 - - 6,871,000
___________________
(a) Uncollectible accounts written off.
(b) Liquidation of inventory previously written down to market.
(c) Physical inventory losses.
33
TIFFANY & CO. AND SUBSIDIARIES
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
__________________________________________________________________________________________________________________
Column A Column B Column C Column D Column E
- - ------------------------------------------------------------------------------------------------------------------
Additions
-----------------------------
Balance at Charged to
beginning costs and Charged to Balance at end
Description of period expenses other accounts Deductions of period
- - ------------------------------------------------------------------------------------------------------------------
Year Ended
January 31, 1992:
Reserves deducted from
assets:
Accounts receivable
allowances principally
doubtful accounts $3,831,527 $2,117,261 $ - $1,488,924(a) $4,459,864
Allowance for inventory
liquidation and
obsolescence - 2,189,444 - 256,054(b) 1,933,390
Allowance for inventory
shrinkage 790,000 6,660,000 - 5,856,000(c) 1,594,000
LIFO Reserve 5,550,000 971,000 - - 6,521,000
___________________
(a) Uncollectible accounts written off.
(b) Liquidation of inventory previously written down to market.
(c) Physical inventory losses.
34
TIFFANY & CO. AND SUBSIDIARIES
SCHEDULE IX - SHORT-TERM BORROWINGS
- - --------------------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
- - --------------------------------------------------------------------------------------------------------------------
Weighted
average Maximum amount Average amount
Balance at interest outstanding outstanding Weighted average
Category of appropriate end of rate at end during the during the interest rate
short-term borrowing period of period period period(a) during the period(b)
- - --------------------------------------------------------------------------------------------------------------------
Year Ended
January 31, 1992:
Notes payable to bank $43,565,968 6.3% $64,261,507 $39,840,494 6.4%
Year Ended
January 31, 1993:
Notes payable to bank 22,457,735 4.3 98,278,277 72,624,936 4.4
Year Ended
January 31, 1994:
Notes payable to bank 59,289,059 3.7 75,149,753 44,201,800 3.8
____________________
(a) Average amount outstanding during the period is computed based on the
daily outstanding balance for the year.
(b) Average interest rate during the period is computed by dividing the
annualized interest on short-term borrowings by the average short-term debt
outstanding.
35
TIFFANY & CO. AND SUBSIDIARIES
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
- - -----------------------------------------------------------------------------------
Column A Column B
- - -----------------------------------------------------------------------------------
Charged to cost and
Item expenses
- - -----------------------------------------------------------------------------------
Year Ended January 31, 1992:
1. Depreciation and amortization of intangible assets $ 8,134,464
2. Taxes, other than payroll and income taxes 4,596,383
3. Royalties 7,412,517
4. Advertising costs 19,212,295(a)
Year Ended January 31, 1993:
1. Depreciation and amortization of intangible assets 11,425,000
2. Taxes, other than payroll and income taxes 4,747,035
3. Royalties 6,583,238
4. Advertising costs 19,372,517(a)
Year Ended January 31, 1994:
1. Depreciation and amortization of intangible assets 13,587,000
2. Taxes, other than payroll and income taxes 4,960,800
3. Royalties 6,980,904
4. Advertising costs 18,147,000(a)
(a) Cooperative advertising expenses have been included in Advertising costs for
all years presented.
36
EXHIBIT INDEX
SEE PAGES 23 THROUGH 27 FOR A COMPLETE LIST OF EXHIBITS FILED, INCLUDING
EXHIBITS INCORPORATED BY REFERENCE FROM PREVIOUSLY FILED DOCUMENTS.
EXHIBIT DESCRIPTION PAGE NO.
3.2 By-Laws of Registrant (as last amended April 19, 1993) . . . . . . . . . . . . . . . . . . . . .
10.112 Amendment No.1 To Distribution Agreement (Oahu, Hawaii) made with respect to Distribution Agreement
made the 28th day of November 1988 by and between Tiffany and Mitsukoshi (U.S.A.), Inc. (see Exhibit
10.64 above) entered into as of December 13, 1993 and Amendment No. 1 to License Agreement (Oahu,
Hawaii) made with respect to the License made the 28th day of November 1988 by and between Tiffany
and Mitsukoshi (U.S.A.), Inc. (see Exhibit 10.64 above) entered into as of December 13, 1993.. .
10.113 Tiffany and Company Pension Plan, as last amended February 16, 1994. . . . . . . . . . . . . . .
10.114 1994 Tiffany and Company Supplemental Retirement Income Plan. . . . . . . . . . . . . . . . . .
10.115 1994 Form of Split Dollar Life Insurance Agreement entered into by Tiffany and Company and Executive
Officers including form of Assignment of Life Insurance Policy as Collateral.. . . . . . . . . .
11.1 Statement re Computation of Per Share Earnings. . . . . . . . . . . . . . . . . . . . . . . . .
13.1 Annual Report to Stockholders for Fiscal Year Ended January 31, 1994 (pages 10 through 27 of such
Annual Report have been filed in electronic format). . . . . . . . . . . . . . . . . . . . . . .
21.1 Subsidiaries of Registrant. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23.1 Consent of Coopers & Lybrand, independent accountants. . . . . . . . . . . . . . . . . . . . . .
NOTE: ALL OTHER EXHIBITS HAVE BEEN INCORPORATED BY REFERENCE FROM EXHIBITS TO
DOCUMENTS PREVIOUSLY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. REFER
TO THE LIST OF EXHIBITS ON PAGES 23 THROUGH 27 FOR REGISTRATION, FILE AND
EXHIBIT NUMBERS.