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By: Ellen Cans
Some four years ago, LVMH, led by billionaire CEO Bernard Arnault, had purchased the famed jeweler Tiffany & Co , for $16 billion in 2021. It was named the largest luxury acquisition in the world. The Louis Vuitton luxury brand conglomerate had high hopes for Tiffany, with plans to expand Tiffany’s presence in markets like China and India, enhance its digital capabilities and tap into the next generation of luxury buyers.
As reported by Crain’s NY, after purchasing Tiffany, the European holding Company spent over $350 million to redesign the jeweler’s flagship store, known as the Landmark, at 727 Fifth Ave in Manhattan. It was the most expensive renovation in LVMH’s history.
So, no wonder, the conglomerate set high sales targets and expected a lot of the staffers. Unfortunately for Christopher Kilaniotis, the head of Americas at Tiffany, and Chief Executive Anthony Ledru, the iconic jeweler was not reaching its targets in the U.S. LVMH will report earning later this week, but it does not specify Tiffany’s isolated figures. We already know though, that sales for the conglomerate’s watches and jewelry segment fell 4% in the last quarter—marking the third straight quarterly sales decline for the segment.
LVMH continues to ask its investors for patience, regarding the Tiffany acquisition. “You shouldn’t expect double-digit growth tomorrow. But we are seeing sequential improvement, which is really the results of the execution of the strategy delivering. It takes time, it costs money, and it takes investment. So you have to be patient,” Deputy Chief Financial Officer Cecile Cabanis said regarding Tiffany’s on LVMH’s earnings call last quarter.
Though Tiffany’s flagship store met sales targets during the 2024 holiday season, last year its market share fell by one percentage point to 12% of global luxury branded jewelry, per data analytics firm Euromonitor International. In the current fiscal year, revenue growth at existing Tiffany stores globally is expected to be about 10 percentage points lower than at competitor Cartier, per Bernstein analyst Luca Solca. “Tiffany is significantly behind Cartier, given its lower global desirability,” Solca said.
The jeweler is “suffering from a higher middle-class exposure, weaker global reach, a sub-par high jewelry business” and the popularity of lab-grown diamond engagement rings has hurt its bridal business, he said.
As per Crain’s, Ledru and Kilaniotis have sought to increase the jeweler’s sales revenue by linking employees’ paychecks to their heightened sales goals. Some 16 current and former Tiffany executives and employees, who weren’t authorized to speak publicly, told Crain’s that in 2023 executives promised bonuses to nearly two dozen managers at Tiffany’s flagship— if they were to meet certain revenue targets. The sources say that the bonuses were never paid, with the company changing the way sales at the flagship were computed just days before the bonuses were expected. Some of the staffers told Crain’s, that this bonus disappointment led to staffers fleeing from Tiffany, with the number of full-time salespeople at Landmark declining to about 90, falling by roughly 40% in December, compared to the previous year.
Tiffany denied the alleged exodus, saying it intentionally “rightsized” staffing at the flagship store in 2024. “This decision was made based on the appropriate and needed coverage.” A Tiffany spokesperson also said the three months ending December 2024 marked the highest fourth-quarter sales ever at Landmark, though specific figures were not released.
