WHITELOGO

Blog

Focus on

DIAMOND JEWELRY

ON THE TAIL OF RECORD CHRISTMAS SALES, MAINLY IN ASIA, TIFFANY’S TRANSITION INTO FRENCH HANDS IS COMPLETED

 

America’s most storied jewelry brand is now…well…French. After a more than a year of twists and turns, Tiffany & Co has become another puzzle piece in the portfolio of the world’s largest luxury monolith, the Paris-based LVMH conglomerate.

The final price for the buyout was actually established at the end October 2020, at $131.50 per share in cash, resulting in a  total acquisition price of $15.8 billion. This was down from the figure of $16.2 billion in stock buyouts, which had been thrown about when the sale was first announced. That was followed by a lengthy process, all taking place in the shadow of the coronavirus pandemic, which included LVMH actually rescinding its original offer completely in June 2020.

“I am pleased to welcome Tiffany and all their talented employees in our group,” LVMH Chairman and CEO Bernard Arnault, as he welcomed the closing of the deal. “Tiffany is an iconic brand and a quintessential emblem of the global jewelry sector. We are committed to supporting Tiffany, a brand that is synonymous with love and whose Blue Box is revered around the world, with the same dedication and passion that we have applied to each of our prestigious maisons over the years. We are optimistic about Tiffany’s ability to accelerate its growth, innovate and remain at the forefront of our discerning customers’ most cherished life achievements and memories.”

Not all of Tiffany’s executive management is staying on. One who is definitely on his way out is Alessandro Bogliolo, the current CEO, who will be leaving the company after helping to facilitate the transition through January 22, 2021. Reed Krakoff, Tiffany’s chief artistic director, and Daniella Vitale, executive vice president and chief brand officer, will also be leaving.

Bogliolo will be replaced by Anthony Ledru, executive vice president of global commercial activities at Louis Vuitton. He is returning to Tiffany, where he previously oversaw North American operations. Furthermore, Alexandre Arnault, the son of Bernard Arnault, was appointed executive vice president of product and communications. Michael Burke, the CEO of Louis Vuitton, will become Tiffany’s chairman.

DRIVE TO BECOME WORLD’S LEADING JEWELRY POWERHOUSE

Market analysts say that LVMH’s acquisition of Tiffany is its most critical move yet to become the most important player in the high-end jewelry market, eclipsing the Richemont conglomerate, owner of Cartier and Van Cleef & Arpels. The analysts expect that after the integration of Tiffany into LVMH, the group will make a strong push expand its product ranges younger clients, especially in Asia.

LVMH’s large-scale commitment to jewelry began in 2011, when the French group French luxury group bought the Italian jewelry brand Bulgari for 3.7 billion euros, which was worth $5.2 billion at the time. Interestingly, Bulgari’s CEO then was none other than Alessandro Bogliolo.

Tiffany’s outgoing CEO Alessandro Bogliolo (left) and its incoming CEO Anthony Ledru.

Along with Tiffany and Bulgari, the watch and jewelry portfolio now includes TAG Heuer, Zenith, Bulgari, Hublot, Chaumet, and Dior Watches. In this respect, there is confusion about the future of the Tiffany & Co. signed dial, which is coveted among collectors of watches ranging from Rolex to Patek Philippe and more. The American jeweler’s relationship with Patek Philippe dates to 1876.

Despite the pandemic, Tiffany & Co reported record sales for the 2020 holiday period.

ASIA-PACIFIC HELPS ACHIEVE RECORD SALES RESULTS

In the meantime, Tiffany & Co reported record sales for the 2020 holiday period, even though many of its customers were stuck at home because of the pandemic. Overall preliminary net sales increased by about 2 percent for the period November 1 through December 31, compared with a year earlier. Ecommerce sales were up more than 80 percent during the period.

Driving the growth was the Asia-Pacific region, where net sales rose by 20 percent. Mainland China posted growth of more than 50 percent.

In contrast, Tiffany reported an 8 percent year-on-year drop in sales in Europe during the November 1 through December 31 period, and 5 percent net sales decline in North America.

“In the midst of a worldwide pandemic and its dynamic impacts, these all-time high preliminary holiday period sales results, which follow a strong third quarter, reflect the successful convergence of our multi-year sales strategies with respect to the Chinese mainland, ecommerce, increasing average unit retail prices and accelerating product innovations,” commented the company’s outgoing CEO Alessandro Bogliolo.

“This year has certainly stress tested the corporate strategies we set in 2017 to strengthen the brand and win in the highly competitive global luxury jewelry market,” Bogliolo added.

SEARCH DIAMONDS
Search