Coach to Kate Spade to Tiffany Chase Sao Paulo Shoppers: Retail

Luxury Tariffs
Brazilians are sufficiently keen on foreign luxury to pay tariffs that can push a Poppy leather “glam” tote in Sao

Paulo to 998 reais ($523) versus $298 in New York. Tiffany and Coach are offering to ease the sticker shock with

installment plans, an unusual practice for luxury brands outside Brazil.

Treating herself at Sao Paulo’s Morumbi Shopping mall last month was Viviane Tabalipa, an architect from the

southern city of Curitiba, who was carrying a Michael Kors handbag and was laden down with two Armani Exchange

shopping bags.

“Brazilians’ shopping power grew a lot,” she said. “So we indulge ourselves buying one little thing here and

there.”

While Tabalipa was planning a girls’ shopping trip to New York in July -- with her daughter, sister and niece --

she said she’s happy to find what she wants at home.

When New York-based Coach’s distributor partner Aste Group last month opened a first Brazilian Coach store at

Morumbi Shopping it received “excellent consumer response,” Chief Executive Officer Lew Frankfort said on an April

24 conference call with analysts.

Brazil Possibilities
Frankfort, 66, said he visited “eight or ten” malls when he traveled to Brazil for the first time in November. All

of them are candidates for Coach, he told analysts the week after.

“I’m pumped about Brazil,” Frankfort said. “I see Brazil as a country of optimism, a country of possibilities.

In many ways, it reminds me of America, particularly 20 and 30 years ago.”

Tiffany, also headquartered in New York, opened a store in Brasilia in October and plans to open one in Rio de

Janeiro in November and one in Curitiba in 2013, Rodembusch said. It is also considering a store in Recife, he said.

It already had two locations in Sao Paulo.

While strong demand from Brazilian tourists in the U.S. is encouraging the jeweler to capture that consumer at home,

Tiffany also hopes its local expansion will build brand recognition and spur even more Brazilians to buy its jewelry

when they are traveling, he said.

“Tiffany has the benefit of being a global brand that can provide the consumer at both ends,” he said.