Luxury Outfits Face Further Japan Fallout (TIF, COH, RL)

Another sector which may go unnoticed by many is the luxury retail and luxury goods sector where many companies derive huge profits from the Japan market.  It goes without saying that almost nobody there is buying these goods right now.  Japan is a market which accounts for something like 10% or 11% of luxury goods sold in the world.

Tiffany & Co (NYSE: TIF) has over 50 Japan stores and gets nearly one-fifth of its sales there.  The market may have already been in decline but Monday brought a 6.9% decline in the stock.  Shares are now down another 6% at $56.25 in pre-market trading versus a 52-week range of $35.81 to $65.76.

Coach Inc. (NYSE: COH) also gets about one-fifth of its sales from Japan and it has closed some of its stores there.  Shares were down about 5.3% to $53.11 yesterday and shares are indicated down another 5.2% at $50.36 in pre-market trading.  Its 52-week trading range is $33.75 to $58.55.

Polo Ralph Lauren Corp. (NYSE: RL) also has Japan exposure and shares fell 2.77% to $123.72 on Monday.  We have indications lower but no pre-market volume has yet been seen.

The old saying is that luxury actually holds up better than the middle-market in retail.  Apparently that isn’t true when there is a major earthquake followed by a potential nuclear disaster.

JON C. OGG