Brunch at Tiffany’s: Business Meeting Appoints New Directors

Tiffany Hires 3 New Directors

The New York-based retailer Tiffany & Co. with a market value of $11.1 billion, has recently announced some changes to its management as a evolutionary process aimed at reaching new generations of clients.

The change was brought about thanks to a surprising admission that JANA Partners, the activist investor group, has recently become a shareholder owning out 5 percent of the famed jeweller- and has since then pressured the company to evoke a series of changes to connect with younger clients.

JANA’s quarterly filing, disclosed last week, had showed no sign of Tiffany shares as of Dec. 31, meaning the market was not even aware that JANA was an investor until Tuesday’s announcement, Tiffany was made famous as a must have luxe accessory by baby boomers who would give the gifts at graduations or for marriage. Politicians and celebrities like seeing themselves at the flagship store to cement A-list status. But the brand has struggled to establish itself with millennials and younger clients and is beginning to make changes to address that problem. One big move was to hire Lady Gaga for an ad during the Super Bowl where she sang at halftime. The move brought about some questions as to the shape of the brand but changes where needed as sales have not been very positive.
The famous jeweller saw a poor end to 2016 with worldwide same-store sales declined 2% over the holiday period; the brand cited slow growth in the Asian markets and a 14% sales drop allegedly caused by extra security for the 45th President whose headquarters on each trip to NY causes customer slowdown to its flagship store because of its proximity, Reports indicate a slow start to 2017 and even considering a strong dollar hurting global demand, even without the dollar’s effect, same-store sales in the Americas fell 8% and Asia sales fell 9%. The poor showings cost the the job of Frederic Cumenal as CEO in February and the company also announced undisclosed number of jobs cuts.
Yet since then it has launched a series of efforts to modernize the brand most starting with its partnership with Net-a-porter and culminating with the executive board changes pushed by JANA. The push for inclusion of online sales for luxury apparel and accessories hit famed American jeweler Tiffany & Co. when it established a limited collaboration with upscale retail site Net-A-Porter which it used to consolidate its status as a luxe brand without the discounts associated with e-commerce. That was Tiffany’s first foray into e-commerce but has since then moved on towards deeper changes, like increasing its executive board from 10 members to 13 through an agreement with activist hedge fund Jana Partners LLC and former Bulgari CEO Francesco Trapani, who together own 5.1% of outstanding shares. As well as adding bit more professional diversity to its board hiring American fashion designer, businesswoman, and philanthropist Tory Burch and former CEO of conglomerate Jarden Corporation James Lillie, it also created the role of CAO (Chief artistic officer) by promoting Reed Krakoff. Mr. Karkoff spent 17 years at Coach serving as its creative director of accessories and has also held roles in senior design at Ralph Lauren.

Sources: Reuters | RetailDive [1] | RetailDive [2]

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