LVMH has done an incredible job reviving the Tiffany & Co. brand. Just ask it.
In a recent conference call, chairman Bernard Arnault was not shy about claiming credit for the retailer’s “remarkable” results since it purchased the company in January 2021. (The luxury conglomerate doesn’t provide specific results for its brands.)
In recent years, as the luxury sector has shown tremendous growth, “Tiffany stagnated,” Arnault announced. “Both profit and revenue were flat. … We were able to turn it around and bring it up to extremely high performance.”
Perhaps. Then again, the jewelry industry as a whole has underperformed the luxury sector for years. That is, until 2021—when it outperformed just about every category.
In fact, last year was so great for the jewelry biz, it would be remarkable if Tiffany didn’t do remarkably. While the new Tiffany team has undoubtedly worked hard at boosting the brand, we may have to wait for a more normal time before we can truly gauge the new team’s success. (The company declined to make an executive available for this story.)
So far, LVMH’s tenure has been wild and a little tumultuous. Some longtime vets have left—not just in the C-suites but a few levels down.
LVMH, meanwhile, is following its standard playbook and taking the brand upscale. Execs plan to focus on less on cheap silver, more on “high-end sparkling jewelry,” according to a Reuters report of a Tiffany town hall.
All of which has caused a huge culture shift—and sometimes culture clash. Not everyone believes the LVMH playbook will play here. While the brand has always had a high-toned image, it still carried a large amount of accessible product. In 2017, the Wall Street Journal reported that “45% of Tiffany’s sales last year came from jewelry categories with an average price of $530 or less.”
“[T]he magic of Tiffany’s lies in its ability to make the ordinary person feel extraordinary,” the Associated Press said in 1998, when the store sold playing-card decks for $12.50.
But now that’s changed.
“It used to be a very warm, open place,” says a former insider. “It’s become more exclusive. When you see the new store design in Boston, you wouldn’t think people would want to spend $200 in there.”
This person admits that, in the past, the brand may have needed more polish, but now says, “the question is, how far do you go with that?”
That points to LVMH’s difficult balancing act. Tiffany has traditionally attracted younger consumers with low-price-point designer silver jewelry. Those shoppers often become lifelong consumers.
It still hopes to attract a younger crowd—and also a richer one. That makes sense in markets like China, where young consumers spend more than their parents. But in America, being young often means being saddled with college debt, and some millennials frown on ostentation. And Tiffany has always been a very American brand.
In a Wall Street Journal article earlier this month, Alexandre Arnault, the brand’s executive vice president of product and communications (and Bernard’s son), denied that LVMH wanted to “de-Americanize” the company, noting that when it acquires a company—and it’s bought dozens—it tries to respect the brand’s DNA. Still, it was his father who said he wanted make Tiffany “a little bit French.”
To be fair, Tiffany has long looked abroad for inspiration. Its current CEO, Anthony Ledru, is its third European CEO in a row (excluding Mike Kowalski’s brief return). This is also not the first time the brand has tried to move upscale.
But the Arnaults have put their feet on the gas. Take its marketing. Tiffany has historically used celebrities in its ads. In 2017, it snagged Lady Gaga. Post-acquisition, LVMH has not only signed up Beyoncé and Jay-Z, but also Kim Kardashian, Pharrell, Rosé, Sarah Jessica Parker, Anya Taylor-Joy, Tracee Ellis Ross, and Eileen Gu.
Its new ads don’t just show off the celebrities’ talent, but their wealth. Pre-acquisition, A$AP Ferg and Elle Fanning danced to Moon River in their street clothes. (They probably weren’t cheap street clothes, but still.) Post-LVMH, Beyoncé sang the song in formal wear at a grand piano.
The ad frequency has changed too. Past Tiffany marketing decisions were slow and considered. Now, we see much more marketing, much more often.
