Tiffany & Co. Sells London Real Estate

Enjoying a strong real estate market, Tiffany & Co. has sold the building housing its flagship store in London for £73 million ($149 million) and has simultaneously entered into a 15-year lease with two 10-year renewal options.

Tiffany had acquired the building at 25 Old Bond Street and an adjoining building at 15 Albermarle Street in 2002 for $43 million (U.S. dollar equivalent at the acquisition date). The acquisition was made in order to combine the buildings, renovate and reconfigure the interior retail selling space.

That work was completed in 2006, allowing the company to complete this sale and leaseback as planned.

This transaction results in a deferred, pretax gain of approximately $73 million, which will be amortized in selling, general and administrative expenses over a 15-year period, and is not expected to have a significant effect on future earnings. The company plans to use the proceeds from the sale for general corporate purposes.

Tiffany has five stores in London, with a sixth opening next year.