Back to GetFilings.com
1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-K
------------------------
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED JANUARY 31, 1995 COMMISSION FILE NUMBER: 1-9494
TIFFANY & CO.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3228013
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
727 FIFTH AVENUE 10022
NEW YORK, NY (Zip Code)
(Address of principal executive offices)
(212) 755-8000
(Registrant's telephone number, including area code)
------------------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
------------------- ---------------------
COMMON STOCK, $.01 PAR VALUE NEW YORK STOCK EXCHANGE
STOCK PURCHASE RIGHTS NEW YORK STOCK EXCHANGE
------------------------
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. / /
------------------------
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, 1995 the aggregate market value of voting stock held by
non-affiliates was $391,767,665.94. See Item 5. Market for Registrant's Common
Equity and Related Stockholder Matters below.
------------------------
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE REGISTRANT'S
CLASSES OF COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE: 15,728,184 shares of
Common Stock outstanding as of March 24, 1995.
------------------------
The following documents are incorporated by reference into this Annual
Report on Form 10-K: Registrant's Annual Report to Stockholders for the Fiscal
Year Ended January 31, 1995 (Parts I, II and IV) and Registrant's Proxy
Statement Dated April 7, 1995 (Part III).
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2
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,
1995 (Footnote P. "Foreign Operations") is the Registrant's geographic segment
information for the fiscal years ended January 31, 1995, 1994 and 1993.
(c) Narrative description of business.
As used below, the terms "Fiscal 1992", "Fiscal 1993" and "Fiscal 1994"
refer to the fiscal years ended on January 31, 1993, 1994 and 1995,
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 1992, 1993 and 1994, approximately 60%, 65% and 67%,
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.
TIFFANY & CO. REPORT ON FORM 10-K FY 1994 - PAGE 2 -
3
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 24%, 21% and 19% of total Company net sales for Fiscal
1992, 1993 and 1994, 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 gross 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), Bal Harbour (1993), Maui, Hawaii (1994) and Oak
Brook, Illinois (1994). The Beverly Hills branch store was relocated
- - PAGE 3 - TIFFANY & CO. REPORT ON FORM 10-K FY 1994
4
to larger quarters in 1990, as were the San Francisco and Houston branches in
1991. Each of the 17 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 or three per year.
Separate lease agreements to open branches in White Plains, New York, 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 May 1995, September 1995 and April 1996, respectively. See Item 2.
Properties below for further information concerning U.S. Retail store leases.
United States branch stores range in size from approximately 1,600 to 16,000
gross square feet and total approximately 180,000 gross square feet devoted to
retail purposes. Historically, an average of approximately 45% of the floor
space in each branch store has been devoted to retail selling. Newer stores are
designed to devote approximately 60% of total floor space to retail selling.
Tiffany sells jewelry, watches, tableware and other products at
wholesale to approximately 200 United States independent retail locations
(exclusive of locations which sell TIFFANY fragrance products but not other
TIFFANY & CO. 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 3,380 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.
TIFFANY & CO. REPORT ON FORM 10-K FY 1994 - PAGE 4 -
5
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,
1993 1994 1995
---- ---- ----
Number of names on catalog mailing list
at year-end (consists of customers who
purchased by mail or telephone prior to
the applicable date): 491,538 535,307 595,165
Total catalog mailings during fiscal
year (in millions): 12.9 14.1 15.0
Total mail or telephone orders received
during fiscal year: 197,984 210,379 239,485
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 to retail
customers. For locations operated by third-party distributors, Registrant
records as sales the wholesale price charged to the third-party distributors.
- - PAGE 5 - TIFFANY & CO. REPORT ON FORM 10-K FY 1994
6
International Locations
LOCATIONS OPERATED BY REGISTRANT'S SUBSIDIARIES
FREE-STANDING STORES JAPAN: 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 ++ (Temporarily closed as a
Sydney, Australia + (Accessories Boutique) result of earthquake).
JAPAN: NON-MITSUKOSHI DEPARTMENT STORES JAPAN: OTHER MITSUKOSHI LOCATIONS
Kawasaki, (Saikaya Department Store) (NON-DEPARTMENT STORE LOCATIONS)
Kokura, (Izutsuya Department Store) Hilton Hotel, Nagoya, Japan
Kyoto, (Daimaru Department Store) Hotel Okura, Kobe, Japan ++
Hamamatsu, (Matsubishi Department Store) Tokyo Bay Hotel, Tokyo, Japan
Oita, (Tokiwa Department Store) Royal Hotel, Osaka, Japan
Osaka (Shinsaibashi), (Daimaru Department Store) Nagano, Japan (Specialty Store)
Osaka (Umeda), (Daimaru Department Store) Fukuoka, Japan (Specialty Store)
Kumamoto, (Tsuruya Department Store) Kanazawa, Japan (Specialty Store)
The Landmark, Yokohama, Japan
TAIWAN: DEPARTMENT STORES
Taipei, Sogo Department Store
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)
Matsuyama, Japan (Faraone)
LOCATIONS OPERATED BY OTHER THIRD PARTIES NON-DEPARTMENT STORE LOCATIONS
Rustan's Department Store, Manila, Philippines Moana Surfrider Hotel, Honolulu, Hawaii
DFS Saipan Tumon Sands Plaza, Guam
Mohammed bin Masaood & Sons, Abu Dhabi, U.A.E.
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 dedicated TIFFANY & CO. or FARAONE boutique within their
respective stores.
TIFFANY & CO. REPORT ON FORM 10-K FY 1994 - PAGE 6 -
7
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. 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.
In Fiscal 1992, 1993 and 1994, Mitsukoshi's wholesale purchases from
Tiffany constituted, respectively, 15%, 7% and 3% of Registrant's net sales. The
significant decrease in Fiscal 1993 and 1994 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.
- - PAGE 7 - TIFFANY & CO. REPORT ON FORM 10-K FY 1994
8
Because the inventory repurchased and to be repurchased by Tiffany from
Mitsukoshi was previously sold by Tiffany to Mitsukoshi, Registrant reversed
the sales and related gross profit associated with the repurchase. Accordingly,
in 1993 Registrant established 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. The majority of inventories of
saleable TIFFANY & CO. merchandise owned by Mitsukoshi have been repurchased by
Tiffany-Japan. In addition, approximately yen 3.5 billion ($35.5 million) of
TIFFANY & CO. inventory must be repurchased by Tiffany through the period
ending February 28, 1998. The price for inventories to be repurchased by
Tiffany is payable in Japanese yen. Mitsukoshi has agreed to accept a deferred
payment in respect of yen 2.8 billion ($27.6 million) of the purchase price to
be paid by Tiffany for inventory already repurchased. This amount must be paid
in full on February 28, 1998. Interest at the rate of 6% per annum is payable
quarterly to Mitsukoshi by Tiffany on the deferred amount. All other amounts
payable by Tiffany for inventory repurchased pursuant to the New Agreement must
be paid 40 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.
In 1989, Mitsukoshi purchased from General Electric Capital Corporation
("GECC"), 1,500,000 shares of Registrant's Common Stock. As of March 24, 1995,
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 expired 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 18, 1995.
TIFFANY & CO. REPORT ON FORM 10-K FY 1994 - PAGE 8 -
9
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 Fiscal 1993, a second store was opened in
Singapore's Ngee Ann City, and the Peninsula hotel store in Hong Kong was
expanded. In Fiscal 1994, Tiffany opened its store in Sydney, Australia.
Company-operated international TIFFANY & CO. stores and boutiques range
in size from approximately 700 to 13,000 gross square feet and total
approximately 134,000 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.
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 and plans to operate additional boutiques in stores other than
Mitsukoshi in locations outside of Tokyo.
- - PAGE 9 - TIFFANY & CO. REPORT ON FORM 10-K FY 1994
10
The following chart details the growth in the Company's stores and
boutiques since fiscal 1987 on a worldwide basis:
Worldwide Retail Locations
Registrant's Subsidiary Companies Independent
North America and Europe Asia-Pacific and Middle East
End of
Fiscal: U.S. Canada Europe Japan Elsewhere Mitsukoshi Others Total
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
1994 18 1 6 37(1) 7 8 7 84
(1) Includes three locations temporarily closed as a result of earthquake.
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 1992, 1993 and 1994,
Tiffany spent approximately $19.4 million, $18.1 million and $21.8 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 are another important
aspect of Tiffany's promotional efforts. From 1955 through 1994, these windows
were designed by Gene Moore, who retired in January, 1995. In its
TIFFANY & CO. REPORT ON FORM 10-K FY 1994 - PAGE 10 -
11
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 & CO. 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, frequently transient in nature, may not come to the attention of
Tiffany or may not rise to a level of concern warranting legal action. Despite
the general fame of the TIFFANY and TIFFANY & CO. name and mark for the
Company's products and services, Tiffany does not claim to be the sole person
entitled to use the name TIFFANY in every category in every country of the
world; third parties have registered the name TIFFANY in the United States in
the food services category, and in a number of foreign countries in respect of
certain product categories (including, in a few countries, the categories of
fragrance, cosmetics, jewelry, eyeglass frames, clothing and tobacco products)
under circumstances where Tiffany's rights were not sufficiently clear under
local law, and/or where management concluded that Tiffany's foreseeable business
interests did not warrant the expense of litigation.
Designer Licenses
Tiffany has been the sole licensee for jewelry designed by Elsa
Peretti, Paloma Picasso and the late Jean 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.
- - PAGE 11 - TIFFANY & CO. REPORT ON FORM 10-K FY 1994
12
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 14%, 14% and 12% of Tiffany's
net sales in Fiscal 1992, 1993 and 1994, respectively. Merchandise designed by
Ms. Picasso accounted for 5% of Tiffany's net sales in Fiscal 1992, 1993 and
1994, 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,
1993 1994 1995
---- ---- ----
Produced by Tiffany 29 % 27 % 26 %
Purchased from others 71 73 74
----- ----- -----
Total 100 % 100 % 100 %
Approximately 43% of the merchandise purchased from others in Fiscal 1994 was
manufactured outside the United States.
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 16%, 23% and 22% of
Tiffany's net sales for Fiscal 1992, 1993 and 1994, 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
TIFFANY & CO. REPORT ON FORM 10-K FY 1994 - PAGE 12 -
13
discretion. Tiffany does not purchase diamonds directly from the CSO. The
availability and price 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 ("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. In Fiscal 1992, Tiffany
acquired the assets and business of Judel Glassware Co., Inc., which produces
crystal glassware in Salem, West Virginia. Registrant may seek additional
manufacturing capacity in certain key product categories, although there are no
current plans to do so.
- - PAGE 13 - TIFFANY & CO. REPORT ON FORM 10-K FY 1994
14
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 of 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.
Employees
As of January 31, 1995, the Registrant's subsidiary corporations
employed an aggregate of approximately 3,306 full-time and part-time persons. Of
those employees, 2,629 were employed in the United States. Of Tiffany's total
employees, approximately 1,229 persons are salaried employees, 404 are engaged
in manufacturing and 1,275 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.
TIFFANY & CO. REPORT ON FORM 10-K FY 1994 - PAGE 14 -
15
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 expired on
October 31, 1994 and has been renewed for an additional five year term expiring
on October 31, 1999. It may, subject to the terms of the lease, be renewed for
four more successive terms of five years each. Basic rent for the building is
$7.1 million per annum. That rate will remain effective until the expiration of
the current five-year renewal term. If and when Tiffany exercises additional
renewal terms, 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
must also pay all costs of operating the building, including real property
taxes, in addition to the basic rent.
Customer Service Center
Tiffany's distribution facility in Parsippany, New Jersey is 17 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, 1997 and may be renewed thereafter for one renewal
term of six months. The current basic rental is approximately $7.06 per square
foot per annum, but will increase to approximately $7.65 per square foot per
annum effective June 1, 1995. In April, 1993 Tiffany entered into a lease for
51,000 square feet of warehouse space in Pine Brook, New Jersey, a town adjacent
to Parsippany. Management believes that its New Jersey distribution facilities
will continue to be adequate but not optimal for the most efficient distribution
of Tiffany's products. Accordingly, management has developed plans and is
working with real estate developers towards the construction and lease of a
combined warehouse, distribution, light manufacturing and office facility on a
site in Parsippany, New Jersey. The combined facility will consist of
approximately 269,000 square feet of space, of which approximately 96,000 square
feet will be devoted to office purposes, and will consolidate all of Tiffany's
New Jersey operations other than retail sales.
- - PAGE 15 - TIFFANY & CO. REPORT ON FORM 10-K FY 1994
16
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 10-year term); Galleria Post Oak Shopping
Center, Houston, TX, September 30, 2001 (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; Whalers
Village, Maui, HI, July 31, 1999; Oakbrook Center, Oak Brook, IL, April 30, 2009
(two five-year terms); Chifley Tower, Sydney, Australia, January 31, 1999 (two
five-year terms); 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, 1998 (one four-year term); The
Landmark, Hong Kong, October 31, 1997; The Peninsula, Kowloon, Hong Kong,
February 28, 1997; Raffles Hotel, Singapore, September 15, 1997 (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 one-year term).
In addition to the leases shown above, Tiffany has entered into a
10-year lease for a 6,079 square foot retail location at The Westchester, White
Plains, New York, 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. Construction of the White Plains, New York
store began in January, 1995 and the store is anticipated to open in May, 1995.
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.
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.
TIFFANY & CO. REPORT ON FORM 10-K FY 1994 - PAGE 16 -
17
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. Although litigation with present
and former employees is routine and incidental to the conduct of Tiffany's
business and any business employing significant numbers of U.S.- based
employees, such litigation can result in large monetary awards when a civil jury
is allowed to determine compensatory and/or punitive damages for actions
claiming discrimination on the basis of age, gender, race, religion, disability
or other legally protected characteristic or for termination of employment that
is wrongful or in violation of implied contracts. However, 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, 1995.
- - PAGE 17 - TIFFANY & CO. REPORT ON FORM 10-K FY 1994
18
EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers of Registrant are:
NAME AGE POSITION YEAR JOINED TIFFANY
William R. Chaney 62 Chairman of the Board of Directors, 1980
President and Chief Executive Officer
Michael J. Kowalski 43 Executive Vice President 1983
James E. Quinn 43 Executive Vice President 1986
Jeanne B. Daniel 39 Senior Vice President - Merchandising 1986
Patrick B. Dorsey 44 Senior Vice President - General Counsel 1985
and Secretary
James N. Fernandez 39 Senior Vice President - Finance 1983
and Chief Financial Officer
Marsha S. Gewirtzman 44 Senior Vice President - Corporate 1987
Fernanda K. Gilligan 48 Senior Vice President - Public Relations 1984
John R. Loring 55 Senior Vice President - Design Director 1979
Diana Lyne 41 Senior Vice President - Marketing 1984
Thomas J. O'Neill 42 Senior Vice President - Asia-Pacific 1985
Dale S. Strohl 58 Senior Vice President - Operations 1984
Larry M. Segall 40 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.
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.
TIFFANY & CO. REPORT ON FORM 10-K FY 1994 - PAGE 18 -
19
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 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 sales in the Asia-Pacific region in
March 1992 and assumed responsibility for sales in the Middle 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 - TIFFANY & CO. REPORT ON FORM 10-K FY 1994
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 selling 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
In consolidated trading, the high and low selling prices per share for
shares of such Common Stock for Fiscal 1994 were:
Fiscal 1994 High Low
First Fiscal Quarter $34.50 $28.50
Second Fiscal Quarter $37.50 $28.50
Third Fiscal Quarter $39.75 $33.63
Fourth Fiscal Quarter $43.63 $29.00
On March 24, 1995, the high and low selling prices quoted on such
exchange were $29.88 and $29.50 respectively. On March 24, 1995 there were 2,287
record holders of Registrant's Common Stock.
It is Registrant's policy to pay a quarterly dividend of $0.07 per share
of Common Stock, subject to declaration of such dividend by Registrant's Board
of Directors. In Fiscal 1993, dividends of $0.07 per share were paid on April 9,
1993, July 9, 1993, October 8, 1993 and January 10, 1994. In Fiscal 1994,
dividends of $0.07 per share were paid on April 11, 1994, July 11, 1994, October
11, 1994 and January 10, 1995.
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.
TIFFANY & CO. REPORT ON FORM 10-K FY 1994 - 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, 1995, page 8.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Incorporated by reference from Registrant's Annual Report to Stockholders for
the fiscal year ended January 31, 1995, pages 9-11.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Incorporated by reference from Registrant's Annual Report to Stockholders for
the fiscal year ended January 31, 1995, pages 12-25.
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, 1995,
pages 2-7.
ITEM 11. EXECUTIVE COMPENSATION
Incorporated by reference from Registrant's Proxy Statement dated April 7, 1995,
pages 8-18.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Incorporated by reference from Registrant's Proxy Statement dated April 7, 1995,
pages 6-8.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Incorporated by reference from Registrant's Proxy Statement dated April 7, 1995,
page 15. 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 - TIFFANY & CO. REPORT ON FORM 10-K FY 1994
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 1994 Annual Report to Stockholders
of Tiffany & Co. and Subsidiaries:
Report of Independent Accountants
(following this Form 10-K)
Consolidated balance sheets
as of January 31, 1995 and 1994
Consolidated statements of operations
for the years ended January 31, 1995, 1994 and 1993
Consolidated statements of stockholders' equity
for the years ended January 31, 1995, 1994 and 1993
Consolidated statements of cash flows
for the years ended January 31, 1995, 1994 and 1993
Notes to consolidated financial statements
2. Financial Statement Schedules:
The following financial statement schedule should be read in
conjunction with the consolidated financial statements incorporated by reference
herein:
VIII. Valuation and qualifying accounts and reserves.
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.
TIFFANY & CO. REPORT ON FORM 10-K FY 1994 - 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 January 19, 1995).
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., amended as of June 1,
1995.
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 - TIFFANY & CO. REPORT ON FORM 10-K FY 1994
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.
TIFFANY & CO. REPORT ON FORM 10-K FY 1994 - 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. Incorporated by
reference from Exhibit 10.112 filed with Registrant's Report on
Form 10-K for the fiscal year ended January 31, 1994 and dated
April 7, 1994.
11.1 Statement re Computation of Per Share Earnings.
- - PAGE 25 - TIFFANY & CO. REPORT ON FORM 10-K FY 1994
26
Exhibit Description
13.1 Annual Report to Stockholders for Fiscal Year Ended January 31,
1995 (pages 8 through 25 of such Annual Report have been filed in
electronic format).
21.1 Subsidiaries of Registrant.
23.1 Consent of Coopers & Lybrand L.L.P., independent accountants.
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 the Board of Directors on
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.
10.105 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
TIFFANY & CO. REPORT ON FORM 10-K FY 1994 - PAGE 26 -
27
Exhibit Description
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.
10.108 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.
10.113 Tiffany and Company Pension Plan, as last amended February 16,
1994. Incorporated by Incorporated by reference from Exhibit 10.113
filed with Registrant's Report on Form 10-K for the fiscal year
ended January 31, 1994 and dated April 7, 1994.
10.114 1994 Tiffany and Company Supplemental Retirement Income Plan.
Incorporated by reference from Exhibit 10.114 filed with
Registrant's Report on Form 10-K for the fiscal year ended January
31, 1994 and dated April 7, 1994.
10.115 1994 Form of Split Dollar Life Insurance Agreement entered into by
Tiffany and Company and certain Executive Officers including form
of Assignment of Life Insurance Policy as Collateral and Rider No.
1 to 1994 Form of Split Dollar Life Insurance Agreement entered
into by Tiffany and Company and certain Executive Officers.
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 January 5, 1995 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 31, 1994. The text of Registrant's announcement
was included in the Report.
- - PAGE 27 - TIFFANY & CO. REPORT ON FORM 10-K FY 1994
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, 1995 By: /s/ William R. Chaney
------------------------------------
William R. Chaney
Chairman of the Board and President
TIFFANY & CO. REPORT ON FORM 10-K FY 1994 - 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.
By: /s/ William R. Chaney
------------------------
William R. Chaney
Chairman of the Board and President
(principal executive officer) (director)
By: /s/ James N. Fernandez By: /s/ Charles K. Marquis
-------------------------------- ------------------------------
James N. Fernandez Charles K. Marquis
Senior Vice President-Finance Director
(principal financial officer)
By: /s/ Larry M. Segall By: /s/ James E. Quinn
-------------------------------- ------------------------------
Larry M. Segall James E. Quinn
Vice President Executive Vice President
(principal accounting officer) (director)
By: /s/ Jane A. Dudley By: /s/ Yoshiaki Sakakura
-------------------------------- ------------------------------
Jane A. Dudley Yoshiaki Sakakura
Director Director
By: /s/ Samuel L. Hayes, III By: /s/ William A. Shutzer
-------------------------------- ------------------------------
Samuel L. Hayes, III William A. Shutzer
Director Director
By: /s/ Michael J. Kowalski By: /s/ Geraldine Stutz
-------------------------------- ------------------------------
Michael J. Kowalski Geraldine Stutz
Executive Vice President Director
(director)
- - PAGE 29 - TIFFANY & CO. REPORT ON FORM 10-K FY 1994
30
[Coopers & Lybrand letterhead]
REPORT OF INDEPENDENT ACCOUNTANTS
The Stockholders 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 26
of the 1994 Annual Report to Stockholders of Tiffany & Co. and Subsidiaries. In
connection with our audits of such consolidated financial statements, we have
also audited the related financial statement schedule listed in Item 14(a)2 of
this Form 10-K.
In our opinion, the financial statement schedule 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.
Coopers & Lybrand L.L.P.
New York, New York
March 6, 1995
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, 1995:
Reserves deducted from
assets:
Accounts receivable
allowances principally
doubtful accounts $4,170,217 $3,640,485 $ -- $2,089,547(a) $5,721,155
Allowance for inventory
liquidation and
obsolescence 7,061,876 1,787,945 -- 247,339(b) 8,602,482
Allowance for inventory
shrinkage 2,035,358 2,195,829 -- 1,763,054(c) 2,468,133
LIFO Reserve 8,470,000 1,300,000 -- -- 9,770,000
___________________
(a) Uncollectible accounts written off.
(b) Liquidation of inventory previously written down to market.
(c) 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, 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.
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, 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.
34
- --------------------------------------------------------------------------------
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
3.2 By-Laws of Registrant (as last amended January 19, 1995) . . . . .
10.15 Amendment to Lease between Tiffany and Creef Gem Corporation
dated May 24, 1985 for 801 Jefferson Road, Parsippany, N.J.,
as of June 1, 1995
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.115 1994 Form of Split Dollar Life Insurance Agreement entered
into by Tiffany and Company and certain Executive Officers
including form of Assignment of Life Insurance Policy as
Collateral and Rider No. 1 to 1994 Form of Split Dollar Life
Insurance Agreement entered into by Tiffany and Company and
certain Executive Officers
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11.1 Statement re Computation of Per Share Earnings . . . . . . . . . .
13.1 Annual Report to Stockholders for Fiscal Year Ended January
31, 1995 (pages 8 through 25 of such Annual Report have been
filed in electronic format).
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21.1 Subsidiaries of Registrant. . . . . . . . . . . . . . . . . . . .
23.1 Consent of Coopers & Lybrand L.L.P., 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.
TIFFANY & CO. REPORT ON FORM 10-K FY 1994 - PAGE 34 -