As famous stores go, Tiffany and Co.'s flagship store on Fifth Avenue has few peers. It's a retail legend, the place where Audrey Hepburn's Holly Golightly famously visited to calm herself down whenever she was feeling anxious.

But Tiffany executive vice president Beth Canavan, who managed the store for two years, understands that it can also be a little daunting. There are the doormen, the hushed atmosphere, the scores of glittering diamonds locked in glass cubes and guarded by salespeople. "Our Fifth Avenue store is fabulous, but it's intimidating," says Canavan. And that's been the collective vibe of all Tiffany stores—until now.

On Friday, Tiffany will open its first "small-format" store, with about half the square footage of its typical stores, in a retail-residential complex in Glendale, California. It's the first of up to 70 such stores the jeweler hopes to eventually roll out in a bid to make its merchandise more accessible and widen its appeal to women shopping for themselves. Instead of marble and chandeliers, the stores will feature plasma TV's and groves of dangling lights. Jewelry will be merchandised out in the open, so that shoppers can touch and try on pieces without assistance. Canavan will bring her Fifth Avenue experience to Main Street—or, some slightly higher-end version of Main Street.

For the company, it's a dramatic departure from its century-old sales strategy, the pillars of which have been large stores that echo the flagship's majestic feel. And the timing may seem odd, too, as the weakening economy and cratering financial markets send aftershocks through all sectors of industry. Same-store sales growth at Tiffany has been flat or even declining so far this year, while the company’s main bright spot—European sales—are likely to dim as well as the impact of the credit crisis expands.

But last year, Tiffany began shaping a bit of a new profile: In addition to the small-format stores, Tiffany also announced a 20-year manufacturing and distribution deal with Swatch, and has already opened a Patek Philippe salon inside the company's Fifth Avenue store.

The company's plans, first announced in October 2007, call for eventually opening up to 70 of the new stores, but Tiffany did not say what its time frame would be for rolling out the rest, and it's likely they'll be waiting to see how initial stores perform before deciding to expand, especially considering their launch date has happened to come at a time when retail spending has fallen for the third month in a row. The stores will mostly be based in small-city markets like Glendale (pop. 197,000) and will be stationed relatively close to flagship stores in case people prefer to shop at one of those.

Some analysts suggest the move to these more casual, smaller stores could diminish Tiffany's well-known brand that allows it to charge such a healthy premium for its merchandise. "Brand dilution is evident everywhere in the new Tiffany strategy," read a February report from Gerson Lehrman Group. Canavan doesn't see it that way. "We're strengthening our offerings, not diluting them," she says.