Rivals: Zales vs. Tiffany & Co.

" That switching gears and now we're going to talk about actually elect really in luxury jewelry segment we had. -- one of the biggest retailers in the segment Tiffany's reporting a second quarter profit on Friday. That actually dropped 30% as upscale shoppers in the United States cut back on purchases. But fellow dining dealers -- is perfect as preparing to report earnings coming up this week on Wednesday. For a look at one of America's latest and greatest business rivals I want to welcome her flicking their. A strategic or resource groupies the president there and Whitney sealock and national jewelry editor thank you both for joining us I want to kick things off with you bear you know. I when I think about Tiffany's they think about the little blue box and I think about sales I think about the mall. How could these two companies rivals."

" The new one way they're rivals is is sales should money is gone with the men's prestige collection of five -- or hires are trying to get. That deep discount and high and that passcode is doing with price points of tens of thousands of dollars or more. In essence. It is no one can compete with also per ready no one can compete with Paloma Picasso and the grand design house. -- say hi nice bright and and all it all the mentally worse we're seeing. Even. The wealthiest consumers cash and credit constrained. Losing a high percentage of their wealth. So they're either not buying. Diamonds or they're not trading down trading down or the -- operational shoppers probably more importantly who -- middle to middle income consumers that. May have shot did case Whitney pointed out previously yet or. It had -- its sales would stretching go to Tiffany's those customers from our checks are MIA."

" Race and we see this happen in the retail sector in the apparel second issue secondly we see this happen a lot and their retail category. What does this mean for his sales sales we're going to hear what they're clearly reported on Wednesday when he predicting that."

" Your body were for are really worried and it trailing twelve month basis the company's fuss about three dollars a share their projected to go from nine cent profit. Prior fiscal to a loss of 200 since two dollars and 61 cents. So the prospects are not good we're Tiffany is much better capitalize on Whitney has a lot of great behind the scenes information and data that would provide additional person."

" So you say he is teeing you up -- not having me on the -- But I want to talk to you about deals in particular and the united jewelry patter -- category as a whole. We've seen a lot of retailers go bankrupt what does the sales and Tiffany's and the sector need to do as a whole. To kind of maintain courts and not go by the way of bankruptcy as many others have."

" The big challenge and it's not just one for individual companies is is the industry in a hall as a whole is really in turmoil we've been going through it's changed dramatically there was a time ten to fifteen years ago when de Beers out of London South Africa. Really kind of shepherded this business and Stewart the business and they acted as a true marketing cartel -- stabilizing prices and and you know pulling goods back when things got weeks and maintain prices. And and maintain profitability for these companies. A few years ago after some heavy study of the industry they didn't some big competition from other global players like the Russians and others. They pulled back from that position and and there's a couple different problems with that a the diamond business is a lot less profitable than it was at one point because we're now in troops about supply demand. Competitive market situation with diamonds. And the other is is that this is primarily a demand driven industry and hang on which is why it's having so many problems -- you know especially now it's. Yeah and they always -- graduating in the first into the hall in the last outrage -- discretionary spend and it's the very extreme under the luxury market."

" You can't tell that from the stock prices of any of these companies personal -- the last that you're not seeing that in -- Tiffany. Or rat -- or other thank you very much -- and Whitney free time we appreciate it."