Sydney’s the jewel in the crown for expanding Tiffany

Luxury jeweller Tiffany is banking on sustained appetite for its creations in Sydney.

Tiffany managing director Glen Schlehuber.

Luxury jeweller Tiffany & Co is banking on sustained appetite for its creations in Sydney, opening another store even though overall retail sales remain sluggish.

The Westfield store in Pitt Street Mall will be Tiffany’s tenth Australian outlet and fourth in Sydney, which has become a magnet for high-end jewellers. Europe’s Van Cleef & Arpels opened for business in the CBD’s Castlereagh Street earlier this year.

While Deloitte Access Economics says domestic retail sales will improve because of the juggernaut of spending by cashed-up inbound Chinese tourists, Tiffany vice president and managing director Australia and New Zealand Glen Schlehuber says the New York jewellery house has a strong local following.

“We have been in the market in Sydney for 24 years with the store in Chifley Plaza. We have a huge local client base we have built and developed over many years,” said Mr Schlehuber.

The new Westfield store, plus an additional temporary Tiffany & Co store in King Street, will fill the gap left by the closure of Tiffany & Co’s flagship store in Castlereagh Street which is now owned by the NSW government following a compulsory acquisition.

“We were devastated when the government came in early 2016 to tell us the building was going to be acquired. It was owned by Dexus, but the government officially owns it now.”

The flagship store at 28 Castlereagh Street, Martin Place will be relocated to a 1200sq m store fronting 175 Pitt Street, opening late next year. The 200sq m Westfield store will open in the middle of the year, augmenting other stores such as those at Bondi Junction and Sydney International Airport.

Meanwhile, Deloitte Access Economics says retail sales growth was 2 per cent for calendar 2016.

“We expect a steady improvement in retail sales through 2017, which is forecast to grow by 2.4 per cent for the year to December 2017, then by 2.7 per cent over 2018,” said David Rumbens, Deloitte Access Economics Partner.

“International tourist visitation in Australia is at record highs, and spending by tourists is exploding as well. The strong growth in tourism over recent years is expected to continue during 2017, adding a key supplementary market for Australian retailers. Tourist shopping expenditure from China alone is already around $1.4 billion per year, and is set to almost quadruple over the next decade. Strong growth is also expected from India and the Middle East,” Mr Rumbens said. But the past six months of data for retail profits reveals the lowest results in almost five years. Intense competition mixed with slow spending growth were important contributors to this result, Deloitte Access Economics said.

Still, the development of the Tiffany flagship store emphasises the growth of luxury retailers in Sydney and Melbourne, where landlords and tenants still see considerable growth.

Mr Schlehuber said he was also assessing more opportunities in several Australian cities to open further Tiffany stores.

“It’s easy to open your doors, (but) we have built that internal culture over 24 years that is paying us dividend.”