Both Tiffany & Co. (TIF, quote) and Sotheby’s (BID, quote) are looking to China for future growth, which means they offer investors gains on the rising affluence of the Chinese. While concerns about the Chinese economy are getting play in the news, there is an opportunity to accumulate position when prices are low.
In a November 2011 Wall Street Journal article, John Jannarone described how each company appeals to a different market segment. Sotheby’s is “an auction house for multimillionaires,” while Tiffany’s customer base “spans a somewhat wider income scale.”
Both companies looking to China for future growth. Sotheby’s has scheduling short courses on “Business Management in the Art World” for Hong Kong and mainland art investors. The art market in China is hot, and three of last year’s most expensive paintings were created by Chinese artists.
Meanwhile, Tiffany’s chairman Michael Kowalski told China Daily in November 2011, “”China will rapidly become the place where we will have the greatest number of new stores.” The company is expanding its reach, moving outwards from the largest cities to the provinces.
There has been a slowdown in spending on luxury goods in China, but this is a short-term concern. When growth and luxury spending return to Asia, both Sotheby’s and Tiffany & Co. are positioned to profit.