Interpublic popping to highs ahead of conference presentation; analyst discusses the name as M&A target
Tiffany Plots China Growth Plan
BEIJING — The famed Tiffany Diamond made its China entrance on Friday, going on display in a country hungry for diamonds and eager to explore the company’s long-standing tradition of jewelry.
Before a preview of the exhibit, which features the 128.54-carat yellow Tiffany Diamond and dozens of other signature pieces, Michael Kowalski, the company’s chairman and chief executive officer, discussed the importance of China’s burgeoning diamond and luxury market to Tiffany’s growth plans going forward.
Kowalski told WWD that the firm is targeting 10 to 12 percent annual sales growth globally in the coming years. China is a critical component of that mix.
“Clearly China will be one of our fastest-growing markets over the next five to 10 years so our sales objective for China would be in excess of that 12 percent corporate average,” said Kowalski.
Tiffany’s recent fourth-quarter sales results showed a 27 percent increase in the Asia-Pacific region, and though the company doesn’t break out sales figures in specific countries, Kowalski said China was a major driver in the rise.
“The company for so many years was primarily focused on the U.S. domestic market and we really began our aggressive international expansion 10 years ago,” he explained.
“So we were very deliberate in our approach to the China market, and perhaps came to the market a little bit late compared to some of our luxury competitors.”
The company invested heavily in brand education, keying on the Tiffany history and heritage, and has found success with China’s new luxury consumer class. Up until about a decade ago, diamond engagement rings were relatively rare in China. According to a recent market report from Euromonitor, China’s diamond consumption has tripled in recent years, making it second only to the U.S.
That hunger for diamonds, particularly in engagement rings, is evident in what Chinese customers want from Tiffany, Kowalski said. While diamonds account for half of the company’s sales globally, the percentage (which he did not disclose) is higher in China.
“Diamonds are probably relatively more important here to the Tiffany brand than they are anywhere in the world,” said Kowalski.
To capitalize on that demand, the company has brought its showpiece collection to the Chinese capital, starting with a small private viewing for select clients and celebrities at an exclusive club and boutique hotel. This is the first time the Tiffany Diamond has traveled to China and is being showcased in its new, 2012 setting, platinum and diamond necklace that was designed for the company’s 175th anniversary last year.
On Saturday, the famed gem and a range of Tiffany’s showcase pieces featured in a more open exhibition, which included an original musical score written for the event by renowned Chinese composer Tan Dun. Tan is famed for his film scoring, including those for the movies “Crouching Tiger, Hidden Dragon” and “Hero.”
Following the weekend events, the diamond exhibit was due to move to the Tiffany & Co. flagship in Beijing through Jan. 5. The diamond is likely to be a hit, as Chinese consumers have been particularly drawn to yellow and other colored diamonds.
Kowalski said the event is part of the company’s effort to educate Chinese consumers about the history and legacy of the brand. Sales results show it’s working thus far, and Tiffany plans to expand in China at a deliberate pace.
The ceo said Tiffany will open three to four stores in mainland China each year for the foreseeable future, carefully choosing store locations — a decision he said can be the most important part of making a lasting presence.
When it entered the market in China, “there was a very general awareness of Tiffany,” said Kowalski. “Building depth around that awareness is something we’ve devoted a lot of effort to over the last three to five years.”
The next step will involve building more awareness of Tiffany beyond engagement rings — the company’s signature six-prong setting diamond engagement ring is its most popular product offering in China.
“I think there’s a natural evolution from the engagement business to diamonds used more broadly for gift-giving purposes,” he said.
Before a preview of the exhibit, which features the 128.54-carat yellow Tiffany Diamond and dozens of other signature pieces, Michael Kowalski, the company’s chairman and chief executive officer, discussed the importance of China’s burgeoning diamond and luxury market to Tiffany’s growth plans going forward.
Kowalski told WWD that the firm is targeting 10 to 12 percent annual sales growth globally in the coming years. China is a critical component of that mix.
“Clearly China will be one of our fastest-growing markets over the next five to 10 years so our sales objective for China would be in excess of that 12 percent corporate average,” said Kowalski.
Tiffany’s recent fourth-quarter sales results showed a 27 percent increase in the Asia-Pacific region, and though the company doesn’t break out sales figures in specific countries, Kowalski said China was a major driver in the rise.
“The company for so many years was primarily focused on the U.S. domestic market and we really began our aggressive international expansion 10 years ago,” he explained.
“So we were very deliberate in our approach to the China market, and perhaps came to the market a little bit late compared to some of our luxury competitors.”
The company invested heavily in brand education, keying on the Tiffany history and heritage, and has found success with China’s new luxury consumer class. Up until about a decade ago, diamond engagement rings were relatively rare in China. According to a recent market report from Euromonitor, China’s diamond consumption has tripled in recent years, making it second only to the U.S.
That hunger for diamonds, particularly in engagement rings, is evident in what Chinese customers want from Tiffany, Kowalski said. While diamonds account for half of the company’s sales globally, the percentage (which he did not disclose) is higher in China.
“Diamonds are probably relatively more important here to the Tiffany brand than they are anywhere in the world,” said Kowalski.
To capitalize on that demand, the company has brought its showpiece collection to the Chinese capital, starting with a small private viewing for select clients and celebrities at an exclusive club and boutique hotel. This is the first time the Tiffany Diamond has traveled to China and is being showcased in its new, 2012 setting, platinum and diamond necklace that was designed for the company’s 175th anniversary last year.
On Saturday, the famed gem and a range of Tiffany’s showcase pieces featured in a more open exhibition, which included an original musical score written for the event by renowned Chinese composer Tan Dun. Tan is famed for his film scoring, including those for the movies “Crouching Tiger, Hidden Dragon” and “Hero.”
Following the weekend events, the diamond exhibit was due to move to the Tiffany & Co. flagship in Beijing through Jan. 5. The diamond is likely to be a hit, as Chinese consumers have been particularly drawn to yellow and other colored diamonds.
Kowalski said the event is part of the company’s effort to educate Chinese consumers about the history and legacy of the brand. Sales results show it’s working thus far, and Tiffany plans to expand in China at a deliberate pace.
The ceo said Tiffany will open three to four stores in mainland China each year for the foreseeable future, carefully choosing store locations — a decision he said can be the most important part of making a lasting presence.
When it entered the market in China, “there was a very general awareness of Tiffany,” said Kowalski. “Building depth around that awareness is something we’ve devoted a lot of effort to over the last three to five years.”
The next step will involve building more awareness of Tiffany beyond engagement rings — the company’s signature six-prong setting diamond engagement ring is its most popular product offering in China.
“I think there’s a natural evolution from the engagement business to diamonds used more broadly for gift-giving purposes,” he said.
Prisa loses patience with Telefonica and invites bids for Digital+
Prisa, the listed Spanish media group, has invited offers for its pay-TV channel Digital+, reported El Confidencial, citing sources close to the company.
Despite almost eight months of talks with the Spanish telco Telefonica, acquisition negotiations have not resulted in a deal, the report said. Given the lack of progress, Prisa has decided to look further afield for a buyer.
The UK’s BSkyB, Vivendi (France), Al Jazeera (Qatar) and Liberty Global (US) have all expressed an interest, the report said.
Prisa, which hopes to raise EUR 1bn from selling its 56% stake, has set a deadline for final offers of 15 January, the item noted.
Source El Confidencial
Exec: Future investment will remain focused on core areas, will continue to simplify the petroleum portfolio
- US onshore business to generate $3B in fress cash flow by 2020
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BN 12/10 14:11 *TEVA INTERIM CEO SAYS CO. WILL EVALUATE BUYBACK OPPORTUNITIES BN 12/10 14:11 *TEVA INTERIM CEO SAYS CO. SEES DIVIDEND RISING IN 2014 BN 12/10 14:08 *TEVA IS NOT FOR SALE: INTERIM CEO BN 12/10 14:02 *TEVA WOULD NOT IGNORE ANY DEAL OPPORTUNITY: INTERIM CEO BN 12/10 14:02 *TEVA SEEKS ACQUISITIONS TO EXPAND IN EMERGING MKTS BN 12/10 14:01 *TEVA INTERIM CEO SAYS CO. HAS ABILITY TO EXECUTE DEALS BN 12/10 13:57 *TEVA SEES ABT 25% COPAXONE PTS SWITCHING IF GENERIC IN JUNE '14 BN 12/10 13:52 *TEVA SEES ORAL MS DRUGS ABOVE 100K PATS BY END-2014 BN 12/10 13:49 *TEVA INTERIM CEO SEES COPAXONE UNCERTAINTY THROUGH 2015 BN 12/10 13:48 *TEVA INTERIM CEO SAYS WILL KEEP SEEKING COST CUTS THROUGH 2014 BN 12/10 13:44 *TEVA SEES LOW-SINGLE-DIGIT PRICE EROSION IN EUROPE MKT IN '14 BN 12/10 13:34 *TEVA SEES 2014 A `VALLEY' FOR NEW GENERIC DRUGS BN 12/10 13:27 *TEVA SEES 1Q AND 4Q 2014 BETTER THAN 2Q AND 3Q BN 12/10 13:17 *TEVA INTERIM CEO SAYS FINDING PERMANENT CEO IS `HIGH PRIORITY' BN 12/10 13:12 *TEVA EXECUTIVES SPOKE IN CONFERENCE CALL BN 12/10 13:11 *TEVA INTERIM CEO SEES 70% OF COST SAVINGS REALIZED BY END-2015
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*TEVA IS NOT FOR SALE: INTERIM CEO 2013-12-10 14:09:14.245 GMT
--LIBBY SALLABERRY
-0- Dec/10/2013 14:09 GMT
It increasingly appears that tapering is coming at the Fed's meeting next week.
While forecasting the central bank's moves has been an uncertain proposition for most of the past several months—with the conventional wisdom having it wrong in June and September—several of the Fed's own financial tests for reducing its asset purchases look to have been met as it heads into the Dec. 17 meeting. Those include confidence in the outlook, an easing of fiscal drag and uncertainty, and what the Fed sees as more appropriate interest rates.
To be sure, the Fed could decide to wait another month for even greater clarity, and practically, many Fed officials see little difference in a taper program that begins in December versus January.
But it looks as if the three tests for tapering have nearly been met.
(Read more: Global economy might be comeback story of 2014)
Confidence in the outlook: As of Friday's jobs reports, three-month average job growth is 193,000, up by 44,000 compared with what the Fed knew about payroll growth in September, when it surprised markets by failing to taper. Job growth in three of the past four months has been above 200,000. At 7 percent, the unemployment rate is two-tenths lower than in September.
Add to that an easing of tension in Europe and growing household wealth with stock and real estate values higher, and the Fed has ample reason to feel better about the economy and the outlook than it did in late summer.
End of fiscal uncertainty: Most Fed officials talk with increasing certainty about a pickup in growth next year. Part of that confidence is simple math. They see the effects of fiscal drag from government cutbacks easing next year and a waning impact from the January rise in tax rates. The Fed said explicitly in September that it was concerned about the negative effects of a looming government shutdown. Its political forecasting turned out to be on the mark (better, in fact, than its economic forecasting).
It now appears that congressional Democrats and Republicans are on the verge of a deal to put off another debilitating deficit debates for at least two years. That should give the Fed more confidence in the outlook even though fourth-quarter growth is expected to be in the 1 percent range.
(Read more: 'It is time to taper' says Fed's Fisher)
Interest rates: This is the one area that could yet sway the debate the other way, but on balance, it favors a tapering. The 10-year benchmark Treasury bond, at around 2.84, is pretty much where it was in September when the Fed said in its statement "tightening of financial conditions observed in recent months, if sustained, could slow the pace of improvement in the economy and labor market."
But there are some key differences. First, short rates have been far more well-behaved, indicating to Fed officials that markets embrace their notion that "tapering is not tightening,"—that is, reducing asset purchases should not bring forward the date when the market expects the Fed to hike interest rates. Indeed, the Fed Funds Futures contract for June 2015 traded as high as 92 basis points in September and 66 basis points the day before the September meeting. That same contract now trades at around 27 basis points.
Significantly, it did not move at all after Friday's surprisingly strong jobs report. The Fed takes this as the markets' belief in its pledge to keep rates "lower for longer" than would seem appropriate under normal economic conditions.
Second, the unemployment rate is lower, and third-quarter gross domestic product was revised up to 3.6 percent last week from the initial report of 2.8 percent. Fed officials are unlikely to fight hard against them if they perceive that they result from a better growth outlook.
Jeff Rosenberg, co-head of fixed income at BlackRock, said that the Fed's concern with higher long rates could keep a ld on their levels, with investors unwilling to bid up rates too high for fear that the Fed would act to tamp themmments Monday. down.
(Read more: Is Fed causing deflation? Some think so)
What's also clear is that several centrists on the rate-setting Federal Open Market Committee appear ready to discuss a taper, and some even have publicly called for a reduction. Notably, St. Louis Fed President Jim Bullard said Monday, "A small taper might recognize labor market improvement while still providing the committee the opportunity to carefully monitor inflation during the first half of 2014."
Atlanta Fed President Dennis Lockhart said last week that tapering should be discussed, and Jeff Lacker, president of the Richmond Fed, weighed in with similar co
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BN 12/10 13:43 Orco Threatened by Bankruptcy Without More Capital, Vitek Says
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Orco Threatened by Bankruptcy Without More Capital, Vitek Says 2013-12-10 13:47:44.430 GMT
By Jurjen van de Pol Dec. 10 (Bloomberg) -- Orco Property Group will go bankrupt unless it’s allowed to boost its capital, Czech billionaire Radovan Vitek, the company’s largest shareholder, tells Bloomberg’s Lenka Ponikelska. * Story: NSN MXLFH16KLVS8<GO>
For Related News and Information: First Word scrolling panel: FIRST<GO> First Word newswire: NH BFW<GO> --Editor: James Ludden
To contact the reporter on this story: Jurjen van de Pol in Frankfurt at +49-69-9204-1104 or jvandepol@bloomberg.net
To contact the editor responsible for this story: James Ludden at +44-20-7673-2645 or jludden@bloomberg.net
*BRAZIL HAS SOME SPACE FOR DETERIORATION IN INVESTMENT GRADE:S&P
As opposition party offices are raided and streets continue to fill with protesters, the "precarious" funding sitaution in the nation is beginning to flash red as interbank lending rates spike to 20%. Banks, clearly concerned about their own and each other's liquidity in the face of potential deposit runs (and the accompanying counterparty risk) and huge demand for liquidity. The hryvnia is falling and bond yields are rising but it is the spike in KievPrime overnight rates that is most concerning - and policy-makers have little room to help.
Gapping down
In reaction to disappointing earnings/guidance: PBY -11.3%, ALOG -9.9%, CASY -1.2%, TPLM -1.1% (light volume), TEVA -0.6%, KMG -0.5%, TXN -0.3%.
Select shipping related names showing weakness: GNK -16.2%, EGLE -12.7%, VLCCF -2.4%, .
Other news: IEP -6.3% (announces sale of 2 mln depositary unit), GASS -5.8% (announces public offering of 10 mln shares of common stock), TA -5.4% (TravelCenters of America LLC Announces Public Offering of 5,000,000 Common Shares), ARCC -3.8% (plans to make a public offering of 14,300,000 shares of its common stock), DAR -3.7% (announced that it intends to offer 40,000,000 shares of its common stock in an underwritten public offering), BCRX -3.7% / NVAX -0.8% (still checking), PF -3.5% (announces secondary offering of 17 mln shares of common stock), SEAS -2.8% (filed amended S-1 prior to close), ALU -2.2% (still checking), NXPI -2% ( Selling shareholders commence 25 mln share secondary offering of common stock), TAM -1.5% (proposed secondary offering of 10 mln shares of common stock), FNSR -1.3% (announces proposed $200 mln convertible Senior notes offering due 2023), RL -0.7% (still checking), HTS -0.2% (declares Q4 dividend of $0.50 per share; previous quarter's dividend was $0.55 per share), NOK -0.7% (Nokia may pay $487 mln to India to transfer factory to Microsoft (MSFT), according to reports), .
Analyst comments: TEN -0.7% (Tenneco downgraded to Outperform at RBC Capital Mkts; tgt $66)
Select shipping related names showing weakness: GNK -16.2%, EGLE -12.7%, VLCCF -2.4%, .
Other news: IEP -6.3% (announces sale of 2 mln depositary unit), GASS -5.8% (announces public offering of 10 mln shares of common stock), TA -5.4% (TravelCenters of America LLC Announces Public Offering of 5,000,000 Common Shares), ARCC -3.8% (plans to make a public offering of 14,300,000 shares of its common stock), DAR -3.7% (announced that it intends to offer 40,000,000 shares of its common stock in an underwritten public offering), BCRX -3.7% / NVAX -0.8% (still checking), PF -3.5% (announces secondary offering of 17 mln shares of common stock), SEAS -2.8% (filed amended S-1 prior to close), ALU -2.2% (still checking), NXPI -2% ( Selling shareholders commence 25 mln share secondary offering of common stock), TAM -1.5% (proposed secondary offering of 10 mln shares of common stock), FNSR -1.3% (announces proposed $200 mln convertible Senior notes offering due 2023), RL -0.7% (still checking), HTS -0.2% (declares Q4 dividend of $0.50 per share; previous quarter's dividend was $0.55 per share), NOK -0.7% (Nokia may pay $487 mln to India to transfer factory to Microsoft (MSFT), according to reports), .
Analyst comments: TEN -0.7% (Tenneco downgraded to Outperform at RBC Capital Mkts; tgt $66)