Tiffany sales are tanking -- and the real reason is worse than the company claims

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Tiffany & Co. was once a go-to for luxurious jewelry.

But the retailer's sales are down after a rough holiday season.

Comparable sales, or sales at stores open at least a year, fell 5% for the luxury retailer.

The retailer attributed the decline to a strong US dollar and a decline in foreign tourism.

But these dipping sales are only one part of the puzzle.

"As it did throughout 2015, Tiffany has pinned the blame for its sales declines on the strong dollar," Neil Saunders, CEO of research firm Conlumino, wrote in a note to clients. "There is truth in such an assertion, although it is not the whole truth. This is evidenced by the fact that even on a constant currency basis worldwide sales still fell by 3% in total and by 5% in comparable terms."

One big reason for the decline? A major shift in the way Americans spend their money.

"One of the factors at play, at least in the United States, is a shift in holiday purchasing," Saunders wrote. "Prior to the economic downturn of 2008, the period between Thanksgiving and Christmas was key for jewelry buying. Today, while it remains the single most important period for purchasing, it accounts for a much smaller share of annual sales than it once did. Jewelry is no longer at the top of the Christmas list. For a brand like Tiffany, where lavish gifting is an important driver of buying, such a trend is distinctly unhelpful.

"As important as this factor may be, it is exacerbated by the more competitive environment for jewelry and the rise of other brands," he added.

Saunders told Business Insider: "This holiday season consumers were interested in luxury/premium clothing (note, not everyday clothing as this fared badly because of the weather), products for the home, and electronic devices like wearables and smart watches (which may have had a slight impact on jewelry sales)."

"There was also a trend to spending less on product and a bit more on experiences such as dining out, trips, etc," he said.

The category isn't entirely dead, though. "Jewelry is still a key gifting item, but it just isn't as big as it used to be during the holidays," Saunders wrote to Business Insider.

RELATED: The Duchess of Cambridge's most impressive jewelry

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Kate Middleton's most impressive jewelry
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Tiffany sales are tanking -- and the real reason is worse than the company claims

The Cartier tiara, worn on her wedding day to Prince William, and the matching earrings given to her by her parents.

Photo: UK Press via Getty Images

Her diamond and sapphire engagement ring.

Photo: Chris Jackson/Getty Images

The Lotus Flower tiara, worn in 2013 to a Diplomatic Reception with Prince William.

Photo: Splash News

The ruby and diamond necklace and bracelet, which the Duchess wore to the Sun Military Awards in December 2011.

Photo: ARTHUR EDWARDS/AFP/Getty Images

A closer look at the necklace worn to the Sun Military Awards.

Photo: Indigo/Getty Images

The sparkling diamond fern brooch worn during the royal tour of Australia and New Zealand, when the royal family touched down in New Zealand.

Photo: Samir Hussein/WireImage

These vibrant blue sparklers, borrowed from her mom, Carole Middleton, and worth nearly $20,000.

Photo: Samir Hussein/WireImage

The Lotus Flower Tiara, again for a state reception with the President of China, paired with two diamond bracelets -- one called The Wedding Gift, with geometric elements, and the second, which has also been worn as a necklace. All of Kate's jewels were borrowed from the royal vault.

Photo: Dominic Lipinski/PA Archive

The Cambridge Lover's Knot Tiara, worn during a diplomatic reception at Buckingham Palace, one of the late Princess of Wales's favorite tiaras.

Photo: Yui Mok/PA Wire

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Additionally, another luxurious category is fading: the handbag industry. It's faltering in comparison with other categories, such as cosmetics and athletic apparel, according to a recent study by Goldman Sachs and Teen Vogue. More of the fashion-forward young women (ages 13 to 29) surveyed said they preferred athletic-wear brands and beauty companies to handbag brands.

Young people in particular spend less when they can and prefer functionality over something traditionally cool.

SEE MORE: 'Underappreciated' restaurant brand about to explode

"Millennials love brands that are useful — and some of these brands have strong usefulness in terms of their design and functionality, and millennials also love things that are [a] good value, off-the-beaten-path kind of stuff," Jeff Fromm, president of the millennial-focused marketing-research firm FutureCast who wrote "Marketing to Millennials," told to Business Insider in the fall. "Some of these brands have that going from them."

SEE ALSO: American women are abandoning a longtime status symbol that put Michael Kors, Coach, and Kate Spade on the map

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