Tiffany & Co. (NYSE: TIF) is a prototype "affordable luxury" retailer. TIF sells high-end jewelry, diamond rings, and lower-priced silver jewelry in retail stores as well as through catalogs and e-commerce.

Tiffany's international presence was a benefit given the state of the American economy--strong Asian sales have helped make up for slacking American and European sales. On the other hand, TIF's international presence can also be a disadvantage, given the fact that without hedging against exchange rate risk, the firm's balance sheet is at the mercy of fluctuations of the U.S. dollar. Also, higher prices of gold and silver lead to higher production costs, which leads to thinner profit margins.

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