Is Costco Competing Against Tiffany, Blue Nile, and High-End Jewelers Now? (COST, TIF, NILE)

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Tiffany & Co. (NYSE: TIF) is widely thought of as the king of high-end jewelry.  While many local high-end jewelry stores compete with Tiffany in local markets, it is hard to imagine that Costco Wholesale Corporation (NASDAQ: COST) is a real destination for ultra high-end jewelry.  The reality is that Costco has had many higher-end offering through the years but it is hard to imagine that you can spend $100,000 or $300,000 or even over $400,000 for diamond ring made of platinum at the box-store giant.

Here are some of the offerings from Costco:

4.25 ct Round  IF Clarity, D Color…. Only One Available Platinum band; IGI Value: $652,755 Costco Price: $459,999.99

6.55 ct Round Brilliant, VS1 Clarity, G Color… Only One Available Platinum band, GI Value: $536,255 Costco Price: $329,999.99

3.06 ct Round, VVS2 Clarity, D Color… Only One Available Diamond Solitaire Ring, Platinum band, IGI Value: $264,295 Costco Price: $179,999.99

3.01ct Round Brilliant, VVS1 Clarity, F Color… Only One Available Diamond Solitaire Ring, Platinum band, IGI Value: $214,295 $139,999.99

Costco has 6 featured rings priced from over $100,000 to the $459,999.99 peak.  While these are all featured as one of a kind items, the intention is likely the obvious move that it wants a proof of concept that it can sell very high-end jewelry (and other items).  The move to offer jewelry is certainly not a new one from Costco.  Wal-Mart Stores Inc. (NYSE: WMT) has also been in the jewelry business for some time even if its high-end rings cap out in the $1,000 to $3,000 range.

As far as how to get up this high in a diamond, Blue Nile Inc. (NASDAQ: NILE) is also in the game of ultra high-end diamonds.  Blue Nile lists the following diamond (without a band) but this is not really apples to apples: Round; 12.84 ct.; Very Good; J; VS2; Blue Nile Price: $488,624

Blue Nile has many large diamonds, and two seen on the list were in excess of $1 million for the diamond alone.  Obviously they are one of a kind as well with on being 12.35 carat and the other being 7.57 carat.

Many retailers want to cater to the high-end consumer.  The efforts and ways that this consumer group gets targeted never seems to have an end.

JON C. OGG

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