The falling value of the yuan could explain why fewer citizens are venturing abroad.<\/b>
\nNEW YORK \u2014 There was something missing at the luxury jeweler Tiffany & Co. in recent months: Chinese tourists.
For the second time in as many months, a big seller of high-end goods noticed that a particularly crucial demographic of its shopping base had made itself sparse, damaging sales and stoking fears of worse to come.
On Wednesday, shares of Tiffany & Co. plunged 12 percent after reporting weaker-than-expected sales in its third quarter.
CEO Alessandro Bogliolo said that Chinese tourists have failed to show up, and open wallets up, with the same vigor that they had in the past.
Last month, the owner of Louis Vuitton noted the same phenomenon of dwindling Chinese tourists.
Shares in that company were hit hard as well.
Tiffany is considered a bellwether for luxury goods, which is why shares of Ralph Lauren and Movado also fell on Wednesday, even as the broader stock market climbed sharply.
Tiffany\u2019s third-quarter revenue rose 4 percent to just above $1 billion, yet industry analysts were anticipating a bigger boost.
Part of the reason for the surprise was fewer tourists, particularly Chinese tourists, at stores in places like New York and Hong Kong.
\u201cWe don\u2019t see a slowdown of demand by the Chinese. What we see is that Chinese tourists are traveling less,\u201d said Bogliolo in a phone interview Wednesday.
In fact, Bogliolo said that Tiffany\u2019s business in mainland China remains strong, achieving double-digit sales growth throughout the year.
In response to the shift, Tiffany\u2019s is increasing its inventory at its stores in mainland China so it\u2019s not missing out on any sales.
Bogliolo speculated that the deteriorating value of China\u2019s currency is to blame for the drop in Chinese tourists.
The yuan, also known as the renminbi, or \u201cpeople\u2019s money,\u201d sank to a 10-year low against the dollar at the end of October.
It strengthened slightly this month, leading many to believe that Beijing has stepped in to stop its slide.
But others see broader issues at play, including a simmering trade war and the potential for a slowing global economy that is squeezing even the wealthy in China.
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