Breakfast at Tiffany's is not what it used to be.
The Fifth Avenue jewelry retailer's gilt-edged image has been tarnished during the last several years as the company's parent, Avon Products, encouraged Tiffany to accelerate and increase efforts to reach out to a larger cross-section of consumers.
But when Tiffany & Co. opens a new store offering jewelry, silver and china this morning in Boston's fashionable Copley Place, it will mark the beginning of the company's return to serving the affluent customers who made it one of the world's preeminent retailers.
Last week, an international investor group led by Tiffany Chairman William R. Chaney announced that they would return the chain to private ownership by purchasing it from Avon for $135.5 million in cash.
Chaney said yesterday the company will reverse the trend toward mass marketing that has offended many of the store's traditional customers.
"This marks a change in strategy," Chaney said. "We are going to go back to focusing on our traditional affluent customers and to pledging our full commitment to the standards of excellence and exclusivity. Our goal is to guide Tiffany into a new era."
The new Boston store is the eighth opened outside the famous location at Fifth Avenue and 57th Street in Manhattan. The others are in Atlanta, Beverly Hills, Chicago, Dallas, Houston, Kansas City and San Francisco.
Washingtonians will have to wait a long time before Tiffany considers entering the nation's capital. Chaney said he has his eye on opening new stores in London, Paris and other major cities abroad rather than adding new stores in the United States.
Avon purchased the 147-year-old jewelery store in 1979 for $104 million and spent about $53 million upgrading production, shipping and data processing.
Some of the innovations, such as Tiffany credit cards with payment deadlines, offended longtime Tiffany shoppers who were used to stretching out payments without any penalties.
Avon sold Tiffany after a two-month auction conducted by investment bankers at Morgan Stanley because it did not fit with Avon's strategy of concentrating on beauty, health care and direct mail products. At one time, Avon thought it would make Tiffany the center of a new specialty retail division.
Tiffany's 1983 sales of $125 million represented only 4 percent of Avon's approximately $3 billion in sales.
Profit margins at Tiffany improved a bit last year after declining to a 1982 low of $6.7 million in pretax income on sales of $115 million.
In 1977, the company earned slightly more, $6.9 million in pretax income, on sales of $47.8 million, less than half the 1982 total.
Corporate accounts that purchase mementos for incentives and service awards provide about 25 percent of Tiffany's sales, Chaney said. He believes this segment provides significant opportunities for growth, so the company is going to open a regional corporate sales office in Cincinnati. Tiffany already has such an office in Philadelphia and will consolidate its Boston corporate sales office into the new store opening this morning.
The controversy surrounding the trend toward the company's mass market retailing reached its peak when Tiffany designer Angela Cummings resigned last year after 18 years with the company to sell her designs through Bergdorf Goodman. She said at the time that she was concerned that Tiffany was becoming more like K mart than Cartier.
Chaney said yesterday he told Cummings her charges were unfair. He said she left for Bergdorf because of conflicts with other designers. Her designs accounted for approximately $10 million in sales, analysts said.
Chaney said the store's world-famous designers, Elsa Peretti, Jean Schlumberger and Paloma Picasso (daughter of the late artist Pablo Picasso), provide a strong base on top of which the company has built its own internal design capability in the last few years.
Chaney, who believes it is an exaggeration to say that Tiffany has become a mass marketer, said the company has continued to offer high-priced items of the finest quality.
"We have a $2.9 million diamond necklace available for sale right now," Chaney said.