Tiffany boosted by sales in China

Tiffany's strong sales in China and higher prices helped mitigate disappointing business in its home market in the second quarter, leading the American jeweller to raise its profit forecast for the year yesterday.

There were fears this summer that luxury spending in China could slow, but Tiffany is the latest Western brand to report good sales there. Prada and Coach also posted big gains in the world's fastest growing luxury market.

But in the Americas, still Tiffany's biggest market, sales at stores open at least a year were unchanged, suggesting the company may have faced the same summer pullback by US shoppers that dented sales at chains ranging from Saks to Target.

"Business in the Americas is light. They continue to struggle with low-end jewellery sales," said Edward Jones analyst Brian Yarbrough.

Still, the pick-up in business outside the Americas, where Tiffany is focusing its expansion, reassured Wall Street that the jeweller's growth prospects remained good, he said.

Tiffany has struggled to find the right mix between the expensive statement jewellery it is famous for and more affordable silver items, typically costing less than US$500, that generate 25 per cent of sales and comprise its most profitable category.