Luxury goods sector Tiffany blames Trump protests for hitting sales at flagship jewellers Luxury jeweller suggests ‘recent election-related activity’ at Trump Tower has been putting customers off in New York People walk in front of the Tiffany store this month after the street it is on had been closed to pedestrians by police. Photograph: Eduardo Munoz/Reuters 
 
 Donald Trump’s successful campaign to become US president has claimed one of its first economic victims after luxury jeweller Tiffany blamed protests at Trump Tower for hitting sales at its flagship store. 
 
 Many of the demonstrations before and after the election have centred on the president-elect’s skyscraper in midtown Manhattan, located on the same block as the jewellery store on Fifth Avenue and 57th Street. 
 
 The site, described by the luxury goods company as “simply the most famous store there is”, is a tourist attraction almost as much as a retail outlet, mainly because of the enduring image of Audrey Hepburn’s alfresco dining and window shopping in the 1961 film Breakfast at Tiffany’s. 
 
 While sightseers have never appeared to scare away customers, political protesters might be viewed differently by Tiffany’s moneyed clients, at least according to a carefully worded results statement to Wall Street on Tuesday. 
 
 “With respect to the impact of recent election-related activity near the company’s New York flagship store, management has noted some adverse effect on traffic in that store and a continuation of sales softness relative to prior year and to the company’s other US stores this year,” the company said. 
 
 Facebook Twitter Pinterest A protest outside Trump Tower on 12 November. Tiffany’s results do not cover the post-election period. Photograph: Kena Betancur/AFP/Getty Images 
 
 “That store represented less than 10% of worldwide net sales for the three and nine-month periods ended 31 October 2016, as well as for each quarter in fiscal 2015. The company cannot provide any assurance that sales in that store will not be negatively affected by this activity in the fourth quarter or in any future period.” 
 
 The results take in the three months to the end of October, so do not include the final days before the election, nor the 8 November result, which led to further protests at the site. 
 
 Tiffany said worldwide net sales rose by 1% to $949m (£761m) and comparable store sales fell by 2% over the period. 
 
 Its chief executive, Frederic Cumenal, remained cautious about the company’s prospects following a mixed year, with low bonuses for Wall Street bankers and weaker spending from foreign tourists. 
 
 “We are encouraged by some early signs of improvement in sales trends, but we clearly need more positive data over time before this can be considered an inflection point,” he said. ||||| Tiffany & Co (TIF.N) reported its first rise in sales in two years as more people shopped in its stores in Japan and China, and the upscale jeweler said sales in the United States declined at their slowest quarterly pace this year. 
 
 The company's shares rose as much as 8 percent on Tuesday, their highest in 15 months. 
 
 However, the luxury retailer - whose flagship store is next to the Trump Tower in New York - said it could not guarantee that sales in the current quarter would not be affected by protests and stepped-up security in the area since the election. 
 
 While traffic has slowed at Tiffany's 5th Avenue store, it accounts for "less than 10 percent" of net sales, Tiffany said. 
 
 The company said Japanese shoppers bought more at home and in the United States, in the third quarter ended Oct. 31, as the yen strengthened against the dollar. 
 
 Net sales increased 1.2 percent to $949.3 million, beating the average analysts' estimate of $923.7 million, according to Thomson Reuters I/B/E/S. 
 
 "The 1 percent uplift is modest, but it is far better than the string of poor numbers the company has been posting for well over a year," said Neil Saunders, chief executive of research firm Conlumino. 
 
 "That said, the figures do not show that all the problems at Tiffany have been resolved." 
 
 Tiffany has been struggling to bring back wealthy American shoppers to its stores and woo hard-to-please millennials who are turning to cheaper and hipper brands such Denmark's Pandora A/S (PNDORA.CO) and online jeweler Blue Nile. 
 
 In response, Tiffany has launched new silver products priced below $500 and has also aggressively marketed its diamond engagement rings. 
 
 The strategy appears to be working. The company said on Tuesday that fashion jewelry performed well in the quarter, helped by higher sales of gold bracelets from its "Tiffany T" collection. 
 
 TRUMP TOWER TROUBLES 
 
 Tiffany, however, said sales at its stores open at least a year fell 2 percent in the quarter. Analysts on average had expected a 2.8 percent decline, according to research firm Consensus Metrix. 
 
 While the company reaffirmed its full-year forecast of a decline in sales and adjusted earnings per share, it said it would remain cautious about how the Trump protests might impact sales over the coming weeks. 
 
 While protests have eased in the neighborhood, the Tiffany store is still caught up in the Trump Tower security cordon. 
 
 Amy Jones, a 22-year-old tourist from Liverpool, England, related to Reuters last week how she was able to buy a ring quickly from Tiffany because there were so few shoppers there, "probably because of all the madness surrounding Trump." 
 
 Fifth Avenue hosts some of the biggest names in luxury retailing, including Gucci, Prada and Armani. 
 
 Edward Jones analyst Brian Yarbrough, however, said the problem was short term in nature and wouldn't hurt holiday season sales much. 
 
 Tiffany said third-quarter sales in China rose by "double-digits" while those in the United States, Canada and Latin America declined at the slowest pace in five quarters. 
 
 Net income rose 4.5 percent to $95.1 million, or 76 cents per share. Analysts on average had expected a profit of 67 cents per share. 
 
 The company's shares had risen about 7 percent this year, through Monday's close. 
 
 (Reporting by Abhijith Ganapavaram in Bengaluru; Additional reporting by Melissa Fares and Steve Holland in New York; Editing by Ted Kerr and Sayantani Ghosh) ||||| A shopper leaves a Costco store in Portland, Ore. (Rick Bowmer/AP) 
 
 Costco must pay the storied jewelry company Tiffany & Co. more than $19 million for selling about 2,500 diamond rings falsely identified on store signs as “Tiffany” rings, a federal judge ruled Monday. 
 
 Costco’s management “displayed at best a cavalier attitude toward Costco’s use of the Tiffany name in conjunction with ring sales and marketing,” U.S. District Judge of the Southern District of New York Laura Taylor Swain wrote in her opinion. 
 
 Her decision followed a 2015 jury verdict, which found that Costco had received a profit of $3.7 million from falsely using the Tiffany brand, rejecting Costco’s argument that the word “Tiffany,” with reference to a ring’s setting, had become a generic term, like Popsicle or dumpster. 
 
 Swain ruled Costco should pay Tiffany $11.1 million plus interest, which is three times Tiffany’s lost profit from Costco’s actions plus $8.25 million in punitive damages. 
 
 Finally, Costco is barred from using the stand-alone word “Tiffany” to describe any products that aren’t connected to the famous jewelry brand. 
 
 Tiffany said in a statement to CNN the ruling “validates the strength of the Tiffany trademark and the value of our brand, and most importantly, sends a clear and powerful message to Costco and others who infringe the Tiffany mark.” 
 
 “We brought this case because we felt a responsibility to protect the value of our customers’ purchases,” the company added. “It is critically important that the Tiffany name not be used to sell any engagement ring that is not our own.” 
 
 Tiffany store and doorman. (iStock) 
 
 Following the ruling, Costco said it would appeal, calling the decision the “product of multiple errors” on the part of the judge. 
 
 “This was not a case about counterfeiting in the common understanding of that word — Costco was not selling imitation Tiffany & Co rings,” Costco said. The diamond rings “in question were not stamped or otherwise marked with the Tiffany & Co. name (but rather were stamped with the name of the company that manufactured them); they were accompanied by appraisal documents that did not mention Tiffany & Co., and with sales receipts that did not say Tiffany or Tiffany & Co. Notably,” Costco added, “Tiffany & Co. did not claim in the lawsuit that it lost a single sale to Costco as a result of any sign. From a purchaser list of approximately 2,500, Tiffany identified fewer than 10 who said they had misunderstood Costco’s signage.” 
 
 Instead, Costco argued that “Tiffany” is a commonly used, generic term to describe a particular type of ring setting. 
 
 Tiffany was founded in 1837 and quickly became one of the world’s leading jewelers. One of its early achievements was inventing a new type of ring setting in 1886. In an attempt to show more of the gem, it set the stone in a metal claw extending from the ring’s band. Before this, diamonds were set in a full shallow cup of metal, obscuring most of the stone, according to Forbes. 
 
 The setting was extremely successful and immediately attracted imitators. By now, as Forbes wrote, “the term ‘Tiffany setting’ has reached Kleenex status — it’s now used colloquially throughout the jewelry industry to describe any multi-pronged solitaire setting, Tiffany or no.” 
 
 Swain wrote Costco “provided credible evidence” of the practice of using the terms “Tiffany setting” and “Tiffany style” generically throughout the jewelry industry. 
 
 The problem is Costco only used the word “Tiffany” when describing the rings in its signage, suggesting they were made by the jeweler rather than an imitation of its famous design. 
 
 Tiffany first filed a complaint in U.S. District Court in New York against the membership-only wholesale retailer on Valentine’s Day in 2013 after learning the company was selling off-brand engagement rings labeled as “Tiffany” in several stores. 
 
 The high-end jewelry company learned of this practice in November 2012, when a customer shopping at a Costco in Huntington Beach, Calif., saw a display of several different rings that were “promoted on in-store signs as Tiffany diamond engagement rings. A salesperson also referred to several of this rings as a “Tiffany ring,” and “said the store generally carries one of each item,” according to the complaint. The same rings were sold online without the Tiffany branding. 
 
 The rings were in no way associated with Tiffany & Co. 
 
 As a result, the complaint stated, “Costco was able to sell in warehouse stores around the United States for many years … engagement rings falsely identified as ‘Tiffany.’” 
 
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– Having the president-elect as a neighbor isn't all sunshine and roses, according to Tiffany, which appears to partly blame Donald Trump for its poor US sales over the last three months. Tiffany actually saw a 1% boost in worldwide sales to $949.3 million in Q3—the company's first positive in two years—thanks to a strong performance in Japan and China, per Reuters. But US sales fell 2% compared to the same period last year. In explaining the figures, Tiffany notes its flagship store happens to sit on the same block as Trump Tower, where protesters gathered both before and after the election, per the Guardian. "With respect to the impact of recent election-related activity near the company's New York flagship store, management has noted some adverse effect on traffic in that store and a continuation of sales softness relative to prior year and to the company's other US stores this year," the company says. In other words, protesters scared away customers from what Tiffany calls "simply the most famous store there is." However, Q3 ended on Oct. 31, more than a week before the largest protests outside Trump Tower followed Trump's election win. With that in mind, Tiffany notes such adverse effects could continue in Q4 and beyond.