For over a century and a half, Tiffany & Co. has been known for its exquisite gifts and upscale image. The company was founded in New York as a stationery and fancy goods store by Charles Lewis Tiffany and John P. Young in 1837. After a brief acquisition by Avon Products in 1979, Avon executive William Chaney led an LBO of Tiffany and took the company public in 1987. Tiffany's reputation for fine quality and craftsmanship has remained strong over the years, and its dazzling gems and delicate china are still all the rage. Today, Tiffany operates 130 stores and boutiques around the world.

A multifaceted retailer

Tiffany wants to make sure customers do more than gaze at its splendid offerings. With profits in mind, company officials have expanded the merchandise selection to include less-costly items like keychains, playing cards, scarves, and fragrances. Today, the average buyer will lay out a mere $256 to walk away with Tiffany's coveted box - in all of its robin's-egg-blue glory. However, Tiffany's classics are still in abundance, including engagement jewelry, watches and clocks, baby gifts, china, crystal, flatware and hollowware, stationery, picture frames, writing instruments, and leather goods. In recent years, sales have been strong, with above-average results in Asia boosting the company's bottom line. On the other hand, competition from Cartier and Bulgari have threatened Tiffany's sales in Europe.

Alerting all Internet junkies

In recent news, Tiffany announced that long-time CEO William Chaney would be replaced by president and COO Michael Kowalski. Times at Tiffany's are changing in other respects too. In late 1998, having jumped on the Web advertising bandwagon, Tiffany's joined arms with IBM. While a corporate intranet keeps business flowing internally, the company's extranet allows customers to order online. Moreover, the alliance with IBM has resulted in superb imaging technology, complete with enhanced, high-resolution designs of Tiffany merchandise. Soon-to-be brides will also be able to check out WeddingChannel.com, where Tiffany's will have an online wedding and gift registry.

Got the blues?

Tiffany advertising has long been focused on brand, and specifically, on sending a consistent brand image. Aside from its well-known Hollywood reference, Tiffany is also synonymous with famous wrappings. All of its gifts come wrapped in exclusive blue boxes that are the exact shade of a robin's egg (otherwise known as "Tiffany blue"). The company goes to great pains to remind people of the connection between color and brand. In fact, an insider reported seeing Tiffany delivery men busily rolling a dolly painted - guess what shade? - robin's egg blue. A member of Tiffany's management team remarks: "Tiffany's products and the blue box are charged with emotion. The blue box makes your heart beat faster. It's bringing the emotion into the advertising."

A real gem

Tiffany tourists and shoppers still flock to the Fifth Avenue flagship store to gape at displays of gleaming jewelry. Nevertheless, window shopping isn't what brings in the bucks. Jewelry presently accounts for more than 70 percent of Tiffany's sales, while inexpensive, promotional merchandise also accounts for a fair share of the total profits. In 1999, the company bought a 15 share of diamond supplier Aber Resources to meet the growing demand for its jewelry. With an upwardly-mobile stock and expansion efforts due in the U.S. and Latin America, the firm's future looks as good as gold.