Falafel at
Tiffany's
For the first time, the luxury-goods company is selling its
products in Israel.
RACHEL NEIMAN SPECIAL TO THE JEWISH NEWS
A
few questions: Is the open-
ing of an Israeli store rep-
resenting luxury goods
firm Tiffany & Co. anoth-
er vote of confidence for region-
al stabilization?
Does the availability of
Tiffany's products to Israeli Hol-
ly Golightlys (and to customers
with Holly-like desires plus the
bucks to back them), put Tel Aviv
on the list of world centers of el-
egance and affluence? Does this
mean Israel rates?
The answer is a careful but
positive "Yes," according to Tom
O'Neill, senior vice-president of
the Asia-Pacific division of Tiffany
& Co.
Mr. O'Neill was in Tel Aviv last
month for the opening of Amirel,
exclusive distributor of Tiffany
products to Israel.
"I feel we made the right de-
cision at the right time," he says.
A cocktail party held at Amirel's
flagship store in the Gan Ha'Ir
mall — well-attended by Israeli
celebrities such as supermodel-
for-a-minute Michaela Bercu —
"confirmed our instincts about
the Israeli market," Mr. O'Neill
says.
"From the very beginning, our
research showed Israelis were
value-conscious, design-oriented
and fashionable. Put that all to-
gether and you see it was just a
matter of deciding when to go into
the marketplace."
So what took Tiffany so long?
One reason is that, until 1984,
the year O'Neill joined Tiffany &
Co., the firm had very limited ex-
posure outside the United States.
That same year, then-presi-
dent of Avon products William
Chaney was preparing a lever-
aged buyout of Tiffany from Avon
(Chaney is today president of
Tiffany & Co.).
"We were a private company
for a few years," relates Mr.
O'Neill. `Then we made an IPO
(initial public offering) on the
New York Stock Exchange in
1987, a few years earlier than ex-
pected. We were more successful
than we thought we would be."
Part of that success was due to
international expansion.
"When we were a private com-
pany between the LBO (lever-
aged buyout) and the IPO, we
targeted international expansion
because the company had excess
capital to reinvest. We opened our
first store in London in late 1985."
In 1990, Mr. O'Neill was made
vice president of the internation-
al division, where he has been re-
sponsible for expansion of retail
trade, direct marketing and fra-
grance businesses in new global
markets.
Tiffany today has 82 locations
worldwide, most of them outside
the United States. However, Mr.
O'Neill hurries to point out, only
37 percent of sales are outside the
United States.
`The largest stores, and 50 per-
cent of sales, are within the Unit-
ed States," he says.
The company operates three
share, compared with $22.47 mil-
lion, or $1.42 per share (exclud-
ing a charge for business
realignment in Japan), a year
earlier.
Revenues in 1993 increased 21
percent to $682.8 million from
S566.6 million in 1992.
This year, Tiffany opened a
store in Abu Dhabi in the United
Arab Emirates in January, and
one in Jedda, Saudi Arabia, in
April. For the Gan Ha'Ir store
opening, Mr. O'Neill drove to Tel
Aviv from Amman, where the
company has a small distributor.
Up until now, Mr. O'Neill says,
"(Tiffany) has had a small and
sporadic business in the Middle
East, but we have not been a sig-
nificant presence. Tiffany has in-
tentionally not been involved (in
the Middle East)."
Now, he says, "it makes sense,
given the peace process and the
seeming change in the various
economies in the region."
Nonetheless, Tiffany's has long
had connections in the wholesale
diamond sector. The company
has been doing business in Israel
"for a number of years," although
Mr. O'Neill declines to specify
how long. Until recently, Israel
with its triple-digit inflation, high
import duties and anything but
luxurious standard of living was
not seen as a significant market
for Tiffany.
The Gan Ha'Irs and Malcha
malls of today, or as Mr. O'Neill
calls them, "upgraded retail out-
distribution channels: U.S. retail, lets," are the result of "increased
which includes sales in Tiffany & demand from Israeli consumers
Co. stores to specific jewelers and for upscale presentation and di-
specialty retailers; direct mar- verse products."
keting, which includes business,
This demand makes up one of
to-business sales and catalog Mr. O'Neill's key principles of ex-
sales; and international retail.
pansion: "the value behind the
The latter department includes product as perceived by the cus-
sales through Tiffany & Co. tomer."
stores throughout Europe, the
So, what do Israelis like?
Far East, Canada and the Mid-
"We are the first to admit we
dle East as well as sales to re- don't know the Israeli market,"
tailers and distributors in those admits Mr. O'Neill.
areas.
But research was conducted
Tiffany & Co. 1993 net profits
were $29.3 million, or $1.85 per FALAFEL page 68
ISRAEL DIGEST'
Compiled by Steve Strinfrom Jerusalem Post reports
— $1 EQUALS 2.9540 NIS (shekels) - Close Price 4/25/95 —
A Stern Warning For Morocco
Israel Industry and Trade Min-
ister Micha Harish warned Mo-
rocco that its refusal to allow
seven Israeli industrialists to
participate on behalf of the Is-
rael Export Institute at the
SIPEC packaging exhibition in
Casablanca is liable to harm
the country's economic stand-
ing-.
Mr. Harish said Morocco's
actions countered the princi-
ples of free world trade as en-
capsulated in GATT, and he
warned that political boycotts
of this type will bring sharp re-
actions from the United States
and Europe.
The Israeli industrialists re-
turned from Morocco after they
were recalled by Mr. Harish fol-
lowing the confiscation of their
product samples by Moroccan
customs authorities.
Who Bought Block Of Bezek Stock?
Barclays de Zoete Wedd (BZW)
has purchased a 4.7 percent
block of stock in Bezek, an Is-
raeli telecommunications firm.
Ifs believed that BZW was act-
ing on behalf of Cable & Wire-
less, Britain's second-largest
telecommunications company.
Cable & Wireless is chaired
by Lord Young, a former Con-
servative cabinet minister and
a prominent member of the
Jewish community in the Unit-
ed Kingdom who has advised
the Israeli government on its
privatization strategy.
Israel-Jordan Projects Presented
A rail connection between
Other projected projects are
Haifa port and the Dead Sea in- a railway and highway from
dustries of both Jordan and Is- Haifa to Irbid, via the Jordan
rael was presented at an River border crossing, and a
Amman conference on Jordan highway between Ashdod and
Valley development sponsored Amman, crossing at the Allen-
by the U.S. Trade and Devel- by Bridge.
opment Administration.
Retail Sales Surge 17 Percent
Retail sales in Israel shot up 17
percent in real terms in the first
quarter of the year as consumer
spending took off after moder-
ating in the last quarter of
1994, the Central Bureau of
Statistics reported.
Sales fell 12 percent in the
fourth quarter after rising
between 8-13 percent in the
previous three quarters.
The bureau's survey includes
marketing networks, chain
stores, supermarkets, and re-
tail stores selling food, textiles,
clothing, shoes, durable goods
and other goods -- except cars,
car parts and residential heat-
ing oil and gas.
Prime Lending Rates Fall Slightly
Commercial banks in Israel re-
duced their prime lending rates
by 0.8 percent, to 15.5 percent
from 16.3 percent, in response
to the Bank of Israel's decision
to cut interest rates= by the
same amount.
Despite strong pressure from
the business sector for drastic
interest cuts following March's
negative consumer price index,
Bank of Israel Governor Jacob
Frenkel stood his ground and
nudged the rate of credit to
commercial banks from 14.8
percent down to 14 percent.
Mr. Frenkel pointed to lower
inflationary expectations in the
capital market and slower
growth in the money supply to
justify the moderate rate cut.