At some point in the last decade, the great American luxury retailer Tiffany & Co. lost its identity. Its many attempts to redefine its brand to attract millennials have produced mixed results. Will the $15.8 billion acquisition by French holdings company LVMH help in creating a cohesive identity for the iconic luxury retailer in a modern world?
How Tiffany Lost Its Way
During the past five years, Tiffany could be better defined for its management shakeups than for creating an identity with broad appeal. Here\’s one dramatic casualty: Frederic Cumenal, the French executive groomed to replace Tiffany\’s successful CEO, Michael J. Kowalski, \”stepped down\” after serving at the top position for 22 months. More tellingly, the abrupt end to Cumenal\’s tenure in 2017 happened hours before the start of the Super Bowl, where the luxury retailer unveiled Lady Gaga as the face of its newest fashion jewelry collection, \”Tiffany HardWear,\” with its first ever Super Bowl commercial.
[callout]What is the Tiffany brand? Is it still an exclusive retailer for the Upper East Side community? A place where people from all over the world can purchase a key chain as a souvenir? Is it still the1960s “Breakfast at Tiffany” object of desire for a working girl? Or does it embody the edgy persona of Lady Gaga?[/callout]
The collection was the last for its high profile international creative director, Francesca Amfitheatrof, who also left the company in 2017, after three years. In addition to Tiffany HardWear, Amfitheatrof is known for her first collection with the luxury brand, \”Tiffany T.\” Both collections geared toward millennials are considered successful and are still being produced. However, Tiffany seemed to be more interested in using Amfitheatrof as the face of the brand, capitalizing on her good looks and proper English boarding school accent, as opposed to highlighting her well-established skills as a designer.
This lack of focus for the luxury retailer was most evident in the release of a \”fully authorized\” documentary called \”Crazy About Tiffany\’s,\” which one critic described as \”a masterclass in masturbatory filmmaking.\” It features random celebrities and Upper East Side socialites talking about their uninteresting associations with the luxury jeweler. It breezes over the jeweler\’s rich cultural history with the exception of the film, \”Breakfast at Tiffany\’s,\” a popular meme for the luxury brand that is still used for its marketing and advertising. The film also brushes over its relationship with China, which has surpassed the U.S. as Tiffany\’s largest regional market, according to its most recent earnings report. The film\’s shallow depiction of excessive wealth is unrelatable to skeptical millennials who are struggling to pay off debt and working much harder than their parents to achieve a similar lifestyle.
Revolving Creative Door
Amfitheatrof was replaced in 2017 by Reed Krakoff, an American fashion designer known for revamping and reviving Coach\’s image. He is easily the most powerful creative director in the company\’s history-the first to be a board member. He heads jewelry, luxury accessories and all artistic and design vision with respect to stores, e-commerce, marketing and advertising. Not long after Krakoff\’s appointment, the company named a new CEO, Alessandro Bogliolo, known for his efforts to revitalize the apparel brand, Diesel. He also worked for 16 years at luxury jeweler, Bulgari, so, unlike Krakoff, he has jewelry industry experience.
Things have gotten better with the new executives. Its stock, while showing signs of volatility, has increased more than 52 percent during the past two years. However, the question remains: What is the Tiffany brand? Is it still an exclusive retailer for the Upper East Side community? A place where people from all over the world can purchase a key chain or a money clip as a souvenir? Is it still the1960s \”Breakfast at Tiffany\” object of desire for a working girl? Or does it embody the edgy persona of Lady Gaga?
\”I would say it is the great American story,\” explains luxury brand consultant, Paula Peterson. \”It really exemplifies to me art, craftsmanship and Made in America. It represents the finest in quality and craftsmanship, style and design, and great silversmithing. It was once part of the American manufacturing story.\”
Peterson, who worked at Tiffany\’s as director of Trade for North America and the Caribbean, adds that its image no longer reflects high luxe as it chose to become a global brand. She argues that it needs to distinguish itself again as an American luxury brand.
If You\’re Everywhere, You\’re Nowhere
\”Global luxury, what does that mean anymore?\” she asks. \”In today\’s society everything is global and there\’s no identity in global. I think there\’s nothing better than being known as the finest Champagne in France or the finest American jewelry band. That\’s a real story that people miss… There are still companies out there that pride themselves at being from a certain country. I think Italians do this better than anyone.\”
She describes the former Tiffany as a place that focused on American manufacturing but wasn\’t afraid to go abroad for things that represented the best from a particular country. Tiffany was once one of the world\’s largest sellers of Rolex watches. It purchased fine French porcelain with some of it marketed under the Tiffany label and co-designed. Since 1851, Patek Philippe watches are sold with the Tiffany & Co. stamp on the dial. These timepieces are highly prized collector\’s items on the resale market.
\”We\’re coming back to the point where country of origin matters,\” Peterson says. \”People like the concept of a great American brand, a great British brand, or a great design brand from Demark or Sweden.\”
But will a French conglomerate with an Italian CEO and an American creative director return Tiffany to its American roots? Or will Tiffany continue on its uneven road toward being a global luxury brand for millennials?
Tiffany could be successful returning to its American roots \”as long as there is American management that can lend a cultural perspective,\” Peterson says. \”The financial strength LVMH brings and the skill should be a positive. The danger is when you become too commercial, which I think LVMH is at risk of becoming.\”
An American Moniker
Through all its changes, Tiffany is still an important global luxury brand. There have been missteps but there also have been successes on its way to modernizing its image. GartnerL2, which releases ranking of companies based on their digital competence, consistently ranks Tiffany as one of the top jewelry and watch brands. Its most recent survey in 2019 has Tiffany ranked number 2, scoring high marks for its website and eCommerce platforms, digital marketing, social media and mobile platforms.
Prior to the acquisition agreement, Tiffany was renovating its stores in the U.S., including its Fifth Avenue flagship, which is basically a three-story exhibition, event and entertainment space on the roof of its historically significant building. The space is surrounded by a glass curtain and an outdoor terrace. The company says its objective is to join the history of the 182-year old company with a look into its future. It has not revealed whether the iconic sales floor will undergo renovation. The Blue Box Café, opened in 2017 and expanded to some its other locations throughout the world, still has a future under the announced plans.
Another thing the company has been quiet about is its other store renovations. However, one report from someone who requests anonymity describes the new design as cold and sterile. The person\’s smartphone photographs of the Orlando area store reflect this. The space is defined by hard surfaces, glass, metal and mirrors with small display cases staggered from front to back. There\’s no lushness and generally little sign of being in a luxury space. The person says that salespersons are trained to stand beside customers rather than in front them, which can be awkward for some.
Tiffany will no doubt be placed in LVMH\’s jewelry and watch division, where it will join Bulgari, Chaumet, Fred, Hublot, Tag Heuer and Zenith. The group is headed by Stephane Bianchi. The question is will he keep the same management team? And if he does make changes, will he keep the company\’s current plan in place? Right now the only thing that is certain in Tiffany\’s future is the little blue box.