<PAGE> 1
Filed Pursuant to Rule 424(b)(1)
Registration No. 333-70193
PROSPECTUS
3,880,000 SHARES
[TIFFANY & CO. LOGO]
COMMON STOCK
------------------------
Mitsukoshi, Ltd., a stockholder of Tiffany & Co., is selling
3,880,000 shares of Tiffany & Co.'s Common Stock. The U.S. underwriters will
offer 3,104,000 shares in the United States and Canada and the international
managers will offer 776,000 shares outside of the United States and Canada.
The Common Stock trades on the New York Stock Exchange under the
symbol "TIF." On January 28, 1999, the last sale price of the Common Stock as
reported on the New York Stock Exchange was $57 11/16 per share.
INVESTING IN THE COMMON STOCK INVOLVES RISKS WHICH ARE DESCRIBED IN
THE "RISK FACTORS" SECTION BEGINNING ON PAGE 7 OF THIS PROSPECTUS.
------------------------
<TABLE>
<CAPTION>
PER SHARE TOTAL
--------- ------------
<S> <C> <C>
Public offering price...................................... $56.00 $217,280,000
Underwriting discount...................................... $2.24 $8,691,200
Proceeds, before expenses, to Mitsukoshi................... $53.76 $208,588,800
</TABLE>
The U.S. underwriters may also purchase up to an additional 312,000
shares at the public offering price, less the underwriting discount, within 30
days from the date of this prospectus to cover over-allotments. The
international managers may similarly purchase up to an aggregate of an
additional 78,000 shares.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any representation to the
contrary is a criminal offense.
The shares of Common Stock will be ready for delivery in New York,
New York on or about February 3, 1999.
------------------------
MERRILL LYNCH & CO. ING BARING FURMAN SELZ LLC
------------------------
The date of this prospectus is January 28, 1999.
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TABLE OF CONTENTS
<TABLE>
<S> <C>
Where You Can Find More Information About the Company....... 3
Incorporation of Information We File With the SEC........... 4
The Company................................................. 5
Recent Developments......................................... 5
Summary Financial Data...................................... 6
Risk Factors................................................ 7
Use of Proceeds............................................. 9
Capitalization.............................................. 10
Business.................................................... 11
Selling Stockholder......................................... 14
Underwriting................................................ 15
Legal Matters............................................... 18
Experts..................................................... 18
</TABLE>
FORWARD-LOOKING STATEMENTS
This prospectus contains (or incorporates by reference) certain
forward-looking statements. We have based these forward-looking statements on
our current expectations and projections about future events. These
forward-looking statements are subject to risks, uncertainties and assumptions
about the Company, including, among other things:
- Economic conditions and consumer attitudes,
- Successful completion of leases and construction for new stores,
- Continuation of existing product supply and design license arrangements,
- Continuity in the market for high-quality cut diamonds,
- Successful integration of new systems, particularly for inventory
management, into our operations, and improvement of warehousing and
distribution productivity,
- Stable exchange rates between the Japanese yen and the U.S. dollar and
- Timely completion of our year 2000 compliance program.
We undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
In light of these risks, uncertainties and assumptions, the forward-looking
events contained or incorporated by reference in this prospectus might not
occur.
------------------------
You should rely only on the information contained or incorporated by
reference in this prospectus. We have not, and the underwriters have not,
authorized any other person to provide you with different information. If anyone
provides you with different or inconsistent information, you should not rely on
it. We are not, and the underwriters are not, making an offer to sell these
securities in any jurisdiction where the offer or sale is not permitted. You
should assume that the information appearing in this prospectus, as well as
information we previously filed with the SEC and incorporated by reference, is
accurate as of the date on the front cover of this prospectus only. Our
business, financial condition, results of operations and prospects may have
changed since that date.
2
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WHERE YOU CAN FIND MORE INFORMATION ABOUT THE COMPANY
We file reports, proxy statements and other information with the Securities
and Exchange Commission. Our SEC filings are also available over the Internet at
the SEC's web site at http://www.sec.gov. You may also read and copy any
document we file at the SEC's public reference rooms in Washington, D.C., New
York, New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for
more information on the public reference rooms and their copy charges. You may
also inspect our SEC reports and other information at the New York Stock
Exchange, 20 Broad Street, New York, New York 10005.
We have filed a registration statement on Form S-3 with the SEC covering
the Common Stock. For further information on Tiffany & Co. and our Common Stock,
you should refer to our registration statement and its exhibits. This prospectus
summarizes material provisions of contracts and other documents that we refer
you to. Since the prospectus may not contain all the information that you may
find important, you should review the full text of those documents.
3
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INCORPORATION OF INFORMATION WE FILE WITH THE SEC
The SEC allows us to "incorporate by reference" the information we file
with them, which means:
- Incorporated documents are considered part of the prospectus,
- We can disclose important information to you by referring you to those
documents and
- Information that we file with the SEC will automatically update and
supersede this prospectus.
We incorporate by reference the documents listed below which were filed
with the SEC under the Securities Exchange Act of 1934 (the "Exchange Act"):
- Annual Report on Form 10-K for the fiscal year ended January 31, 1998,
- Quarterly Reports on Form 10-Q for the quarters ended April 30, 1998,
July 31, 1998 and October 31, 1998,
- Current Reports on Form 8-K filed April 17, 1998, November 19, 1998,
December 30, 1998 and January 7, 1999 and
- Description of the Company's Common Stock contained in the Registration
Statement filed with the SEC on Form S-1 (Registration No. 33-12818), as
most recently amended in the Prospectus for the Company's Common Stock
dated May 5, 1987, as supplemented by the Registration Statement dated
November 18, 1988, filed with the SEC on Form 8-A, as most recently
amended by Form 8-A/A dated September 24, 1998 and filed on September 25,
1998.
We also incorporate by reference each of the following documents that we
will file with the SEC after the date of this prospectus but before all the
Common Stock offered by this prospectus has been sold:
- Reports filed under Sections 13(a) and (c) of the Exchange Act,
- Definitive proxy or information statements filed under Section 14 of the
Exchange Act in connection with any subsequent stockholders' meeting and
- Any reports filed under Section 15(d) of the Exchange Act.
You may request a copy of any filings referred to above (excluding
exhibits), at no cost, by contacting us at the following address:
Tiffany & Co.
Attention: Investor Relations Department
727 Fifth Avenue
New York, NY 10022
(212) 605-4016
4
<PAGE> 5
THE COMPANY
Tiffany & Co. (the "Company") is the parent corporation of Tiffany and
Company ("Tiffany"), which was founded by Charles Lewis Tiffany in 1837. Tiffany
is the renowned jeweler and specialty retailer whose products are distinguished
by their design, quality and value. The Company's principal products are fine
jewelry, timepieces, sterling silver goods, china, crystal, stationery, writing
instruments, fragrances and personal accessories sold under the TIFFANY & CO.
trademark. From its roots at a single New York City store, the Company has
expanded to locations in the Americas, Asia and Europe. Its products are now
sold in more than 100 TIFFANY & CO. stores and boutiques, as well as through
other fine jewelers and select department stores, and through direct marketing
to catalog and business customers.
The Company pursues long-term growth through its strategies for expansion,
merchandising, marketing and customer service -- always focused on its goal of
being the world's most respected jewelry retailer.
RECENT DEVELOPMENTS
1998 HOLIDAY RESULTS
On January 7, 1999, the Company announced that its worldwide net sales in
the November 1 through December 31, 1998 holiday season rose 19.7% over the
comparable period in the prior year. These increases were as follows for the
Company's three channels of distribution:
<TABLE>
<S> <C>
U.S. Retail................................................. 22.2%
Comparable store sales.................................... 11.8
International Retail........................................ 20.2
Comparable store sales (in local currency)................ 11.4
Direct Marketing............................................ 6.9
</TABLE>
CHANGE OF CHIEF EXECUTIVE OFFICER
Effective February 1, 1999, Michael J. Kowalski, 46, will become the
Company's Chief Executive Officer, succeeding William R. Chaney. Mr. Chaney, 66,
has served as the Company's Chairman and Chief Executive Officer since August of
1984 and will continue to serve the Company as Chairman of the Board of
Directors. Mr. Kowalski now serves as President and Chief Operating Officer.
PRIVATE DEBT PLACEMENT
On December 30, 1998, the Company issued $60 million principal amount of
its 6.90% Series A Senior Notes due December 30, 2008 and $40 million principal
amount of its 7.05% Series B Senior Notes due December 30, 2010 (the "Senior
Notes"), in private transactions to institutional investors. The proceeds of the
Senior Notes will be used by the Company's subsidiaries as working capital and
to refinance a portion of outstanding short-term indebtedness under the
Company's revolving credit facility.
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TIFFANY & CO. AND SUBSIDIARIES SUMMARY FINANCIAL DATA
The summary financial data set forth below for the periods indicated should
be read in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations," the consolidated financial statements, the
related notes and the other financial information incorporated in this
prospectus by reference. See "Incorporation of Information We File With the
SEC." The financial information for the fiscal years ended January 31, 1998,
1997 and 1996 has been derived from the audited consolidated financial
statements of the Company and its subsidiaries. The financial information for
the nine months ended October 31, 1998 and 1997 is unaudited but, in the opinion
of the Company, includes all adjustments, consisting only of normal recurring
accruals, considered necessary for the fair presentation of such information.
The results of operations for interim periods are not necessarily indicative of
the results to be expected for the full year.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
AND AT OCTOBER 31, YEARS ENDED AND AT JANUARY 31,
------------------------ ----------------------------------------
1998 1997 1998 1997 1996
---------- ---------- ------------ ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS, PERCENTAGES AND LOCATIONS)
<S> <C> <C> <C> <C> <C>
EARNINGS DATA
Net sales.................................... $726,441 $649,922 $1,017,616 $922,108 $803,292
Gross profit................................. 395,286 349,760 564,208 499,694 427,370
Earnings from operations..................... 67,901 57,374 133,422 109,413 80,013
Net earnings................................. 36,767 30,723 72,822 58,439 39,215
Net earnings per share:
Basic...................................... $ 1.05 $ 0.88 $ 2.08 $ 1.74 $ 1.24
Diluted.................................... 1.02 0.85 2.02 1.66 1.21
Weighted average number of common shares:
Basic...................................... 35,063 34,937 34,953 33,682 31,600
Diluted.................................... 36,045 36,158 36,104 35,690 34,020
Cash dividends per share..................... $ 0.25 $ 0.19 $ 0.26 $ 0.185 $ 0.14
BALANCE SHEET DATA
Cash and cash equivalents.................... $ 43,922 $ 24,483 $ 107,252 $117,161 $ 81,966
Inventories.................................. 519,427 415,371 386,431 335,389 311,252
Total assets................................. 943,505 773,964 827,067 739,418 654,257
Short-term borrowings........................ 153,969 65,196 90,054 76,338 78,967
Long-term debt............................... 94,315 93,080 90,930 92,675 101,500
Stockholders' equity......................... 464,284 417,006 443,724 378,264 264,378
OPERATING DATA
Locations open worldwide (at end of
period).................................... 130 119 123 104 98
U.S. Retail net sales........................ $363,519 $307,660 $ 491,459 $424,185 $364,158
Increase over prior year................... 18% 13% 16% 16% 18%
Comparable store increase.................. 8% 9% 11% 11% 12%
Percentage of total net sales.............. 50% 47% 48% 46% 45%
International Retail net sales............... $290,987 $279,887 $ 421,054 $397,341 $345,853
Increase over prior year................... 4% 8% 6% 15% 23%
Comparable store increase -- local
currency................................. 12% 13% 12% 14% 21%
Percentage of total net sales.............. 40% 43% 42% 43% 43%
Direct Marketing net sales................... $ 71,935 $ 62,375 $ 105,103 $100,582 $ 93,281
Increase (decrease) over prior year........ 15% (2)% 4% 8% 1%
Percentage of total net sales.............. 10% 10% 10% 11% 12%
</TABLE>
6
<PAGE> 7
RISK FACTORS
Investing in the Common Stock will provide you with an equity ownership
interest in the Company. As a stockholder, your investment will be subject to
the risks inherent in our business. The performance of your shares will reflect
the performance of our business relative to, among other things, competition,
general economic and market conditions and industry conditions. The value of
your investment may increase or decline and could result in a loss. You should
carefully consider the following risk factors as well as the other information
included and incorporated by reference in this prospectus before deciding to
invest in shares of the Common Stock.
SALES AND EARNINGS ATTRIBUTABLE TO JAPAN OPERATIONS
The Company derives a significant share of its operating earnings from its
operations in Japan. That share is larger than Japan's percentage of total
Company net sales. In the fiscal years ended January 31, 1996, 1997 and 1998,
and in the nine-month period ended October 31, 1998, total Japan sales
represented 28%, 27%, 27% and 27% of the Company's net sales, respectively.
Therefore, should sales made in Japan decline substantially, it is likely that
such decline would have a significant adverse effect on the Company's earnings.
Also, the ability of the Company to meet its sales and earnings estimates for
any single fiscal year is based upon the assumption that there will not be a
substantial adverse change in the exchange relationship between the Japanese yen
and the U.S. dollar throughout the course of such fiscal year.
The Company's commercial relationship with Mitsukoshi and Mitsukoshi's
ability to continue as a leading department store operator have been and will
continue to be substantial factors in the Company's continued success in Japan.
TIFFANY & CO. boutiques are located in 30 Mitsukoshi department stores and other
retail locations operated by Mitsukoshi in Japan. The Company also operates 13
boutiques in department stores other than Mitsukoshi, in locations within Japan
but outside of Tokyo, and plans to open more. See "Selling
Stockholder -- Continued Relationship Between the Company and Mitsukoshi."
In recent years, the Japanese department store industry has, in general,
suffered declining sales. There is a risk that such financial difficulties will
force consolidations or store closings. Should one or more Japanese department
store operators, such as Mitsukoshi, elect or be required to close one or more
stores now housing a TIFFANY & CO. boutique, the Company's sales and earnings
would be reduced while alternate premises are being secured.
RISK OF REDUCED DISCRETIONARY PURCHASES OF LUXURY GOODS
As is the case with any retailer, wholesaler or direct marketer of consumer
goods, the Company's financial success is partially dependent on economic
conditions and consumer attitudes. TIFFANY & CO. products are, or are widely
perceived to be, "luxury" goods. Therefore, purchases of TIFFANY & CO. products
are often discretionary. Low or negative growth in the economy or in the
financial markets could reduce discretionary spending and, accordingly, reduce
the Company's sales.
JEWELRY DESIGNER LICENSES
Tiffany has been the sole licensee for jewelry designed by Elsa Peretti
since 1974 and by Paloma Picasso since 1980. In the fiscal year ended January
31, 1998, Ms. Peretti's designs represented approximately 14% of the Company's
total net sales and sales of Ms. Picasso's designs represented approximately 4%
of the Company's total net sales. Ms. Peretti and Ms. Picasso each retain
ownership of their respective trademarks and of the copyrights for their
respective designs. Written license agreements exist between Ms. Peretti and
Tiffany and between Ms. Picasso and Tiffany but those agreements may be
terminated by either party following six months notice to the other party. The
Company's operating results could be adversely affected if either license
agreement were terminated or substantially changed.
7
<PAGE> 8
DIAMOND SUPPLY
Diamond jewelry accounts for approximately 21% of the Company's net sales.
The supply and price of rough (uncut and unpolished) diamonds in the principal
world markets have been and continue to be significantly influenced by a single
entity, the Central Selling Organization (the "CSO") of De Beers Centenary AG, a
Swiss corporation. The CSO supplies approximately 70% of the world market for
rough, gem-quality diamonds. Through affiliates, the CSO continues to exert a
significant influence on the demand for polished diamonds by its advertising and
marketing efforts throughout the world.
The availability and price of diamonds to the CSO and Tiffany's suppliers
may be, to some extent, dependent on the political situation in
diamond-producing countries, the opening of new mines and the continuance of the
prevailing supply and marketing arrangements for rough diamonds. Sustained
interruption in the supply of rough diamonds, an over-abundance of supply or a
substantial change in the marketing arrangements described above could adversely
affect Tiffany and the retail jewelry industry as a whole. The CSO is testing a
program to authenticate and "brand" cut and polished diamonds with the CSO's
proprietary trademark. Such a program, coupled with a change in the marketing
and advertising policies of the CSO's affiliates, could affect consumer demand
for diamonds that do not bear the CSO's trademark. The Company may or may not
carry CSO-branded diamonds in the future.
Tiffany purchases cut diamonds principally from three key vendors. Were
trade relations between Tiffany and one or more of these vendors to be
disrupted, the Company's sales would be adversely affected in the short term
until alternative supply arrangements could be established.
COMPETITION
The Company encounters significant competition in all of its product lines
from other third-party providers, some of which specialize in just one area in
which the Company is active. Many of the Company's competitors have established
reputations for style and expertise similar to that of the Company and compete
on the basis of value. Other jewelers and retailers compete primarily through
advertised price promotion. The Company competes on the basis of quality and
value and does not engage in price promotional advertising.
The international marketplace for the Company's products is highly
competitive. Although the Company believes that TIFFANY & CO. is known
internationally, and although Tiffany did operate retail stores in London and
Paris prior to World War II, the Company did not have a retail presence in
Europe in the post-war era until 1986. Accordingly, consumer awareness of the
Company and its products is not as strong in Europe as in the United States or
in Japan, where Tiffany has distributed its products for many years. The Company
expects that its overseas stores will continue to experience intense competition
from established retailers in international cities where TIFFANY & CO. stores
are or may eventually be located.
The Company also faces increasing competition in the area of direct
marketing. A growing number of direct sellers compete for access to the same
mailing lists of known purchasers of luxury goods. In marketing service awards
and business gifts to corporations and other organizations, the Company faces
numerous competitors who sell a wide variety of products at a greater price
range than the Company, which has chosen to offer a more limited selection in
order to adhere to its established quality standards.
EXPANSION OF RETAIL OPERATIONS
The Company's ability to continue its scheduled worldwide retail expansion
program is dependent upon its ability to obtain desirable locations on suitable
lease terms and complete construction on a timely basis. In addition, the timing
and success of expansion outside the United States will depend upon import taxes
and duties and the extent of consumer demand for TIFFANY & CO. products in
overseas markets. These factors vary from market to market.
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INVENTORY MANAGEMENT AND DISTRIBUTION SYSTEMS
As the Company has grown, so have the demands placed on its distribution
and inventory management systems. The Company's ability to sustain growth in
sales and profitability is dependent upon the Company's ability to successfully
develop and integrate new systems, particularly for inventory management, into
the Company's operations and to further improve warehousing and distribution
productivity.
SEASONALITY
The Company's business is seasonal in nature, with the fourth fiscal
quarter typically representing a proportionally greater percentage of annual
sales, earnings from operations and cash flow. A downturn in economic conditions
or consumer spending on luxury goods in the fourth quarter of any year would
adversely affect the Company's sales and earnings.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the shares
offered by Mitsukoshi.
9
<PAGE> 10
CAPITALIZATION
The following table sets forth the capitalization of the Company as of
October 31, 1998. This table should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations," the
consolidated financial statements, the related notes and the other financial
information contained or incorporated by reference in this prospectus.
<TABLE>
<CAPTION>
AT OCTOBER 31, 1998
----------------------
(IN THOUSANDS, EXCEPT
PER SHARE AMOUNTS)
<S> <C>
Cash and cash equivalents................................... $ 43,922
========
Short-term borrowings....................................... $153,969
Long-term debt(1)........................................... 94,315
--------
Total debt.................................................. 248,284
--------
Stockholders' equity:
Common Stock, $.01 par value; authorized 60,000,000
shares, issued and outstanding 34,606,329 shares....... 346
Additional paid-in capital................................ 181,177
Retained earnings......................................... 294,289
Accumulated other comprehensive loss -- foreign currency
translation adjustments................................ (11,528)
--------
Total stockholders' equity.................................. 464,284
--------
Total capitalization........................................ $712,568
========
</TABLE>
- ---------------
(1) On December 30, 1998 the Company issued $100 million principal amount of
Senior Notes. See "Recent Developments -- Private Debt Placement."
10
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BUSINESS
GROWTH STRATEGIES
The Company continues to pursue the following growth strategies, focusing
on its goal of being the world's most respected jewelry retailer:
- Offering products that are superior to the competition in terms of
design, quality and value,
- Expanding distribution to provide customers with greater accessibility,
including the opening of new stores,
- Building worldwide customer awareness through an aggressive marketing
program and
- Providing customer service that assures a superior shopping experience.
PRODUCTS
The Company's principal products are fine jewelry, timepieces, sterling
silver goods, china, crystal, stationery, writing instruments, fragrances and
personal accessories sold under the TIFFANY & CO. trademark. For the fiscal year
ended January 31, 1998, approximately 31% of the products sold by the Company
were manufactured by the Company. The Company expects to increase that
percentage modestly over the next few years by development of additional
manufacturing capacity. For the fiscal year ended January 31, 1998, the Company
derived approximately 73% of its net sales from jewelry, 9% from tabletop
products, 6% from timepieces and 12% from other categories.
Although the Company is perceived by many to sell only luxury goods, the
average retail transaction within the Company's U.S. stores is $260, and the
Company has many products that are priced below that average. Such products are
popular purchases for occasion-related gift giving, such as for weddings,
engagements, birthdays and graduations. See "Risk Factors -- Risk of Reduced
Discretionary Purchases of Luxury Goods."
CHANNELS OF DISTRIBUTION
In reporting its sales results, the Company categorizes its business into
three channels of distribution. "U.S. Retail" consists of retail sales in
Company-operated stores in the United States, wholesale sales to independent
retailers in the United States and wholesale sales of fragrance products to
independent retailers in the Americas. "Direct Marketing" includes Corporate
Division (business-to-business) and catalog sales in the United States.
"International Retail" includes retail sales through Company-operated stores and
boutiques, business-to-business sales and wholesale sales to independent
retailers and distributors outside the United States.
U.S. Retail
Tiffany's Fifth Avenue flagship store in New York City accounts for
approximately 16% of total Company and 33% of U.S. Retail sales. The Company
also has 33 branch retail stores in the United States. The Company expects to
open three to five new branch stores in the United States each year. Newer
stores are smaller (6,000 to 8,000 gross square feet) than many of the older
stores (10,000 to 15,000 gross square feet) but have been designed with a higher
percentage of selling space.
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The following table lists the U.S. stores that the Company has opened in
addition to its flagship New York City store.
<TABLE>
<CAPTION>
STORE LOCATION YEAR OPENED STORE LOCATION YEAR OPENED
- -------------- ----------- -------------- -----------
<S> <C> <C> <C>
San Francisco, California 1963 King of Prussia, Pennsylvania 1995
Beverly Hills, California 1964 Short Hills, New Jersey 1995
Houston, Texas 1964 White Plains, New York 1995
Chicago, Illinois 1966 Bergen County, New Jersey 1996
Atlanta, Georgia 1969 Chevy Chase, Maryland 1996
Dallas, Texas 1982 Charlotte, North Carolina 1997
Boston, Massachusetts 1984 Chestnut Hill, Massachusetts 1997
Costa Mesa, California 1988 Cincinnati, Ohio 1997
Philadelphia, Pennsylvania 1990 Honolulu, Hawaii (Hilton) 1997
Vienna, Virginia 1990 Palo Alto, California 1997
Palm Beach, Florida 1991 Honolulu, Hawaii (Surfrider) 1998
Honolulu, Hawaii (Ala Moana) 1992 Manhasset, New York 1998
San Diego, California 1992 Denver, Colorado 1998
Troy, Michigan 1992 Scottsdale, Arizona 1998
Bal Harbour, Florida 1993 Las Vegas, Nevada 1998
Maui, Hawaii 1994 Seattle, Washington 1998
Oak Brook, Illinois 1994
</TABLE>
Tiffany also sells TIFFANY & CO. brand jewelry and tabletop products at
wholesale to approximately 270 U.S. independent retail locations.
Direct Marketing
Tiffany's Corporate Division consists of approximately 150 sales executives
who call on business clients throughout the United States. Corporate Division
customers purchase for business gift giving, employee service and achievement
recognition awards, customer incentives and other purposes, but not for purposes
of re-sale. The Company plans to achieve growth by better penetration of
existing geographic markets and by adding sales offices throughout the United
States.
Tiffany distributes catalogs of selected merchandise to its proprietary
list of mail and telephone customers and to mailing lists rented from third
parties. Four seasonal SELECTIONS(R) catalogs are published, supplemented by
COLLECTIONS and other catalogs. Tiffany has increased circulation in the fiscal
year ending January 31, 1999 by 12%, to approximately 24 million catalogs.
International Retail
Outside the United States, the Company does business in a variety of retail
formats. Some locations are operated by the Company's subsidiaries and some are
operated by third-party distributors. The Company expects to continue to open
stores in locations outside the United States.
Japan. For the fiscal year ended January 31, 1998, 27% of the Company's
total net sales was derived from locations in Japan. Those locations are:
- 1 stand-alone store operated by a Company subsidiary: the Ginza
flagship store,
- 13 store-in-store boutiques operated by a Company subsidiary
(non-Mitsukoshi locations),
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- 30 store-in-store boutiques operated by a Company subsidiary in
Mitsukoshi locations,
- 1 store-in-store boutique operated by Mitsukoshi: a FARAONE
boutique (FARAONE is a trademark of the Company's Italian
subsidiary) and
- 6 wholesale trade accounts operated by third parties.
Outside Japan and the United States. For the fiscal year ended January 31,
1998, 15% of the Company's total net sales was derived from locations outside of
Japan and the United States. Those locations are:
- 16 stand-alone stores operated by Company subsidiaries:
Australia (2), Canada, England, Germany (2), Hong Kong (3),
Italy (2), Korea, Singapore (2), Switzerland and Taiwan,
- 10 store-in-store boutiques operated by Company subsidiaries:
Australia, England, Hong Kong (2), Korea (2), Mexico, Taiwan
(3),
- 1 stand-alone store and 1 store-in-store boutique operated by
Mitsukoshi: Guam and Taiwan,
- 22 store-in-store boutiques operated by third parties:
Australia, Canada (5), Hong Kong, India, Indonesia (2), Korea
(5), Macao, New Zealand, Philippines (2), Saipan, Singapore and
Taiwan and
- 194 wholesale trade accounts operated by third parties: Europe
(142), Caribbean (16), Asia Pacific and Middle East (21),
Central/Latin America (15).
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SELLING STOCKHOLDER
The following table sets forth certain information with respect to the
beneficial ownership of Common Stock as of the date of this prospectus by
Mitsukoshi, and as adjusted to give effect to the sale by Mitsukoshi of shares
of Common Stock offered hereby:
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
PRIOR TO OFFERINGS AFTER OFFERINGS
------------------------- SHARES BEING ----------------------------
NAME SHARES PERCENTAGE(1) OFFERED(2) SHARES(2) PERCENTAGE(1)(2)
- ---- --------- ------------- ------------ --------- ----------------
<S> <C> <C> <C> <C> <C>
Mitsukoshi, Ltd. ................ 4,270,000 12.3% 3,880,000 390,000 1.1%
c/o Mitsukoshi (U.S.A.), Inc.
12 East 49th Street
New York, New York 10017
</TABLE>
- ---------------
(1) Based upon 34,606,329 shares of Common Stock issued and outstanding as of
October 31, 1998.
(2) Assumes the Underwriters' over-allotment options are not exercised. If such
over-allotment options are exercised in full, Mitsukoshi will have sold all
its shares of Common Stock.
CONTINUED RELATIONSHIP BETWEEN THE COMPANY AND MITSUKOSHI
Mitsukoshi and the Company have an important commercial relationship that
they expect to maintain following Mitsukoshi's sale of the Common Stock offered
hereby.
From 1972 until July 1993, selected TIFFANY & CO. products, principally
jewelry and watches, were purchased from Tiffany by Mitsukoshi for resale in
Japan in TIFFANY & CO. boutiques located, for the most part, in Mitsukoshi's
department stores. Mitsukoshi has been a significant stockholder of the Company
since 1989. Mr. Yoshiaki Sakakura, formerly Chairman and Chief Executive Officer
of Mitsukoshi, has served as a director of the Company since 1989.
Since July 1993, the Company, through a wholly owned subsidiary, has
operated TIFFANY & CO. boutiques within Mitsukoshi's stores in Japan. The
Company currently operates 30 such boutiques. Under the operating arrangements
with Mitsukoshi, the Company retains ownership of its inventory and conducts the
merchandising and marketing operations. Mitsukoshi provides and maintains the
boutique facilities and staffs the boutiques with retail employees. The Company
pays Mitsukoshi fees aggregating 27% of net retail sales in the boutiques and an
incentive fee of 5% of the amount by which boutique sales increase year-to-year,
calculated on a per-boutique basis. For the fiscal years ended January 31, 1996,
1997 and 1998 and for the nine months ended October 31, 1998, sales made in
TIFFANY & CO. boutiques located in Mitsukoshi's stores constituted 21%, 18%, 17%
and 16%, respectively, of the Company's total net sales.
The Company and Mitsukoshi also have an operating relationship for the
TIFFANY & CO. flagship store in Tokyo's Ginza shopping district. Under the lease
and sub-lease arrangements related to the flagship store, Mitsukoshi retains
8.3% of net sales for most sales transactions within the flagship store. In
Tokyo, other than the flagship store, the Company may only establish TIFFANY &
CO. boutiques within Mitsukoshi's stores and TIFFANY & CO. jewelry may only be
sold in such boutiques.
Mitsukoshi has informed the Company that in 1999 it will close the annex to
one of its stores in Tokyo which currently houses a TIFFANY & CO. boutique. The
Company's operations in the annex to be closed will be consolidated with those
of the existing boutique in the adjoining store building.
For more information regarding the Company's business relationship with
Mitsukoshi, see the section entitled "Business with Mitsukoshi" in the Company's
Annual Report on Form 10-K for the fiscal year ended January 31, 1998 which has
been incorporated by reference into this prospectus.
14
<PAGE> 15
UNDERWRITING
Subject to the terms and conditions set forth in a U.S. purchase agreement
(the "U.S. Purchase Agreement") among the Company, Mitsukoshi (the "Selling
Stockholder") and Merrill Lynch, Pierce, Fenner & Smith Incorporated and ING
Baring Furman Selz LLC (collectively, the "U.S. Underwriters"), the Selling
Stockholder has agreed to sell to the U.S. Underwriters, and each of the U.S.
Underwriters severally and not jointly has agreed to purchase from the Selling
Stockholder, the number of shares of Common Stock set forth opposite its name
below.
<TABLE>
<CAPTION>
NUMBER OF
U.S. UNDERWRITER SHARES
---------------- ---------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith Incorporated.......... 2,793,600
ING Baring Furman Selz LLC.................................. 310,400
---------
Total.......................................... 3,104,000
=========
</TABLE>
The Company, the Selling Stockholder and Merrill Lynch International and
ING Bank N.V. (collectively, the "International Managers" and together with the
U.S. Underwriters, the "Underwriters") have also entered into an international
purchase agreement (the "International Purchase Agreement"). Subject to the
terms and conditions set forth in the International Purchase Agreement, and
concurrently with the sale of 3,104,000 shares of Common Stock to the U.S.
Underwriters pursuant to the U.S. Purchase Agreement, the Selling Stockholder
has agreed to sell to the International Managers, and the International Managers
severally have agreed to purchase from the Selling Stockholder, an aggregate of
776,000 shares of Common Stock. The initial public offering price per share and
the total underwriting discount per share of Common Stock are identical under
the U.S. Purchase Agreement and the International Purchase Agreement.
In the U.S. Purchase Agreement and the International Purchase Agreement,
the several U.S. Underwriters and the several International Managers,
respectively, have agreed, subject to the terms and conditions set forth
therein, to purchase all of the shares of Common Stock being sold pursuant to
each such agreement if any of the shares of Common Stock being sold pursuant to
such agreement are purchased. In the event of a default by an Underwriter, the
U.S. Purchase Agreement and the International Purchase Agreement provide that,
in certain circumstances, the purchase commitments of the non-defaulting
Underwriters may be increased or the Purchase Agreements may be terminated. The
closings with respect to the sale of shares of Common Stock to be purchased by
the U.S. Underwriters and the International Managers are conditioned upon one
another.
The U.S. Underwriters have advised the Company and the Selling Stockholder
that the U.S. Underwriters propose initially to offer the shares of Common Stock
to the public at the initial public offering price set forth on the cover page
of this prospectus, and to certain dealers at such price less a concession not
in excess of $1.34 per share of Common Stock. The U.S. Underwriters may allow,
and such dealers may reallow, a discount not in excess of $.10 per share of
Common Stock to certain other dealers. After the initial public offering, the
public offering price, concession and discount may be changed.
The Selling Stockholder has granted options to the U.S. Underwriters,
exercisable for 30 days after the date of this prospectus, to purchase up to an
aggregate of 312,000 additional shares of Common Stock at the public offering
price set forth on the cover page of this prospectus, less the underwriting
discount. The U.S. Underwriters may exercise these options solely to cover
over-allotments, if any, made on the sale of the Common Stock offered hereby. To
the extent that the U.S. Underwriters exercise these options, each U.S.
Underwriter will be obligated, subject to certain conditions, to purchase a
number of additional shares of Common Stock proportionate to such U.S.
Underwriter's initial amount reflected in the foregoing table. The Selling
Stockholder also has granted options to the International Managers, exercisable
for 30 days after the date of this prospectus, to purchase up to an aggregate of
78,000 additional shares of Common Stock to cover over-allotments, if any, on
terms similar to those granted to the U.S. Underwriters.
15
<PAGE> 16
The following table shows the per share and total public offering price,
underwriting discount to be paid by the Selling Stockholder to the Underwriters
and the proceeds before expenses to the Selling Stockholder. This information is
presented assuming either no exercise or full exercise by the U.S. Underwriters
and the International Managers of their over-allotment options.
<TABLE>
<CAPTION>
PER WITHOUT WITH
SHARE OPTIONS OPTIONS
----- ------- -------
<S> <C> <C> <C>
Public offering price................... $56.00 $217,280,000 $239,120,000
Underwriting discount................... $2.24 $8,691,200 $9,564,800
Proceeds, before expenses, to the
Selling Stockholder................... $53.76 $208,588,800 $229,555,200
</TABLE>
The expenses of the Offerings (exclusive of the underwriting discount) are
estimated at $375,000 and are payable in part by the Company and in part by the
Selling Stockholder.
The shares of Common Stock are being offered by several Underwriters,
subject to prior sale, when, as and if issued to and accepted by them, subject
to approval of certain legal matters by counsel for the Underwriters and certain
other conditions. The Underwriters reserve the right to withdraw, cancel or
modify such offer and to reject orders in whole or in part.
The Company has agreed, subject to certain exceptions, not to directly or
indirectly (i) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant for the sale of or otherwise dispose of or transfer any shares
of Common Stock or securities convertible into or exchangeable or exercisable
for or repayable with Common Stock, whether now owned or thereafter acquired by
the person executing the agreement or with respect to which the person executing
the agreement thereafter acquires the power of disposition, or file a
registration statement under the Securities Act with respect to the foregoing or
(ii) enter into any swap or other agreement that transfers, in whole or in part,
the economic consequence of ownership of the Common Stock whether any such swap
or transaction is to be settled by delivery of Common Stock or other securities,
in cash or otherwise, without the prior written consent of Merrill Lynch,
Pierce, Fenner & Smith Incorporated on behalf of the Underwriters for a period
of 90 days after the date of this prospectus.
The U.S. Underwriters and the International Managers have entered into an
intersyndicate agreement (the "Intersyndicate Agreement") that provides for the
coordination of their activities. Pursuant to the Intersyndicate Agreement, the
U.S. Underwriters and the International Managers are permitted to sell shares of
Common Stock to each other for purposes of resale at the initial public offering
price, less an amount not greater than the selling concession. Under the terms
of the Intersyndicate Agreement, the U.S. Underwriters and any dealer to whom
they sell shares of Common Stock will not offer to sell or sell shares of Common
Stock to persons who are non-U.S. or non-Canadian persons or to persons they
believe intend to resell to persons who are non-U.S. or non-Canadian persons,
and the International Managers and any dealer to whom they sell shares of Common
Stock will not offer to sell or sell shares of Common Stock to U.S. persons or
to Canadian persons or to persons they believe intend to resell to U.S. or
Canadian persons, except in the case of transactions pursuant to the
Intersyndicate Agreement.
The Company and the Selling Stockholder have agreed to indemnify the U.S.
Underwriters and the International Managers against certain liabilities,
including certain liabilities under the Securities Act, or to contribute to
payments the U.S. Underwriters and the International Managers may be required to
make in respect thereof.
Until the distribution of Common Stock is completed, rules of the
Securities and Exchange Commission may limit the ability of the Underwriters and
certain selling group members to bid for and purchase the Common Stock. As an
exception to these rules, the U.S. Underwriters are permitted to engage in
certain transactions that stabilize the price of the Common Stock. Such
transactions consist of bids or purchases for the purpose of pegging, fixing or
maintaining the price of the Common Stock.
If the Underwriters create a short position in the Common Stock in
connection with the Offerings, i.e., if they sell more shares of Common Stock
than are set forth on the cover page of this prospectus, the
16
<PAGE> 17
U.S. Underwriters may reduce that short position by purchasing Common Stock in
the open market. The U.S. Underwriters may also elect to reduce any short
position by exercising all or part of the over-allotment options described
above.
In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of such purchases.
Neither the Company nor any of the Underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the Common Stock. In addition, neither
the Company nor any of the Underwriters makes any representation that the U.S.
Underwriters will engage in such transactions or that such transactions, once
commenced, will not be discontinued without notice.
ING Baring Furman Selz LLC, one of the U.S. Underwriters, was a
co-placement agent in connection with the Company's issuance of the Senior Notes
for which it received customary compensation. William A. Shutzer, a director of
the Company, is an executive officer of ING Baring Furman Selz LLC.
17
<PAGE> 18
LEGAL MATTERS
Certain legal matters with respect to the validity of the Common Stock
offered hereby will be passed upon for the Company by Gibson, Dunn & Crutcher
LLP, New York, New York. Charles K. Marquis, a director of the Company, was a
partner of Gibson, Dunn & Crutcher LLP during 1998. Certain legal matters
relating to the Offerings will be passed upon for the Underwriters by Shearman &
Sterling, New York, New York.
EXPERTS
The consolidated balance sheets of the Company as of January 31, 1998 and
1997 and the related consolidated statements of earnings, stockholders' equity
and cash flows for each of the three years in the period ended January 31, 1998,
incorporated by reference in this prospectus, have been incorporated herein in
reliance on the report of PricewaterhouseCoopers LLP, independent accountants,
given on the authority of that firm as experts in accounting and auditing.
18
<PAGE> 19
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3,880,000 SHARES
[TIFFANY & CO. LOGO]
COMMON STOCK
----------------
PROSPECTUS
----------------
MERRILL LYNCH & CO.
ING BARING FURMAN SELZ LLC
JANUARY 28, 1999
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