Tiffany & Co. (TIF), Blue Nile Inc (NILE), Signet Jewelers Ltd. (SIG): Does the Blue Box Still Have Room to Run?

Tiffany & Co. (NYSE:TIF) is known for its feature in the 1961 film Breakfast at Tiffany’s , and its 5th Avenue flagship store. Its key New York City store is more of a novelty and tourist attraction these days, but the company’s blue boxes remain recognizable worldwide, and Tiffany itself is one of the market leaders when it comes to fine jewelry .

Tiffany & Co. (NYSE:TIF) has been on a tear over the past five years, up over 100%, compared to the S&P 500’s near 30 % run, but can this blistering growth continue? As the number of “wealthy” households increases thanks to a rebounding economy, and as Asia becomes a viable market for high-end jewelry, Tiffany should continue to reward shareholders nicely.

In the $33 billion fine-jewelry industry, Tiffany owns some 5.5% of the market. While Tiffany tends to cater to the ultra high-end market, the likes of Blue Nile Inc (NASDAQ:NILE) and Signet Jewelers Ltd. (NYSE:SIG) cater to the lower-end markets.

Blue Nile Inc (NASDAQ:NILE) burst onto the scene back in 1999 and has been changing the jewelry retail game every since. The online retailer has been offering consumers a low-cost, convenient, one-stop shop for buying jewelry. Yet, over the last five years, Blue Nile Inc (NASDAQ:NILE) has managed to see earnings decline at an annualized 11 %, while Tiffany has managed to grow EPS at an annualized 16% over the same time period .

Meanwhile, Signet Jewelers Ltd. (NYSE:SIG) is the market leader in the jewelry business, owning about 10% of the market . Signet owns the market for good reason: it caters to the middle market. Chances are, even if you’re not married, you’ve seen one of Signet’s stores; the company operates well-known brands Kay Jewelers and Jared The Galleria Of Jewelry .

Why Tiffany can move higher

Tiffany’s America segment accounts for around half of revenue. But the Asian segment marks the growth story; the segment makes up 20% of revenue. Company wide same-store sales were up an impressive 8% in 1Q 2014, with Asia leading the way; same-store sales for Asia advanced 21%.

While e-commerce is all the rage these days, retail is still a part of Tiffany’s model, with the company planning to open some 16 stores in fiscal 2014. Again, enter Asia, where the majority of the stores will be opened; seven, to be specific. Part of the reason that Tiffany still believes in retail is that buying high-end jewelry, especially engagement rings, continues to be an intimate process, and therefore one that is best done in person.