Jan. 14 (Bloomberg) -- Tiffany & Co., the world’s second- largest luxury-jewelry retailer, said holiday sales fell 21 percent as wealthy consumers reduced spending amid the global financial crisis. The chain cut its annual earnings forecast.

Revenue from Nov. 1 to Dec. 31 fell to $687.4 million from $867.3 million a year earlier, New York-based Tiffany said today. Sales at U.S. stores open at least a year declined 35 percent.

Sales at Tiffany’s main New York store also fell by about a third as European tourists bought less, spokesman Mark Aaron said. Jewelry sales have slowed as rich shoppers, spooked by seesawing stock markets, sinking home values and Wall Street job cuts, suspended purchases of luxury goods.

“This is at the worse end of expectations,” said David Schick, an analyst with Stifel, Nicolaus & Co. “But Tiffany survived the Civil War, so Tiffany will absolutely be a survivor through the slowdown.”

Schick, based in Baltimore, predicted a 30 percent drop in U.S. comparable-store sales. He recommends holding the shares.

Tiffany fell 5 cents to $21.95 at 4:02 p.m. in New York Stock Exchange composite trading. The shares declined 49 percent last year.

A 10 percent price reduction for engagement rings failed to jumpstart sales, Aaron said on a conference call with investors and analysts.

“This holiday season was the most challenging in the 21 years since Tiffany became a public company,” he said.

Forecast Cut

Tiffany reduced its per-share profit forecast for the year ending Jan. 31 to $2.25 to $2.30 from as much as $2.50, excluding any job-reduction costs. Analysts expect profit of $2.37, the average of 12 estimates compiled by Bloomberg.

Tiffany’s November and December sales represent about 80 percent to 85 percent of the jeweler’s fourth-quarter sales, Aaron said Jan. 9.

Tiffany had 206 stores and boutiques, including 76 in the U.S., as of Dec. 31.

Retailers’ sales at U.S. stores open at least a year fell 2.2 percent in November and December from a year ago, the biggest decline in four decades, the International Council of Shopping Centers, a New York-based trade group, reported Jan. 8.

Tiffany trails Cie Financiere Richemont AG, owner of Cartier and Van Cleef & Arpels, in worldwide jewelry sales. Richemont, also owner of watch brands such as IWC and Piaget, said Nov. 14 that sales in the six months through September gained 10 percent to 2.8 billion euros ($3.7 billion).

Richemont may say next week that sales stagnated for the first time in more than four years as the rich bought fewer Vacheron Constantin watches and Mont Blanc pens, according to six analysts surveyed by Bloomberg.

To contact the reporter on this story: Cotten Timberlake in Washington at ctimberlake@bloomberg.net

Last Updated: January 14, 2009 16:18 EST