Tiffany's: a luxury jewelry brand undergoing a complete metamorphosis
Legendary jeweler Tiffany's is LVMH 's largest acquisition ever . Its future depends on Bernard Arnault's 30-year-old son, Alexandre.
LVMH strategy applied to Tiffany's
Since transforming Louis Vuitton , Bernard Arnault has pursued a simple but effective strategy. It involves acquiring respected but somewhat out-of-date brands. He then modernizes their management , marketing, and operating methods. All of this is then integrated into the ever-growing LVMH empire.
From Christian Dior to Fendi to Bulgari, acquisition prices have steadily increased as targets have become increasingly scarce. Last year, Arnault made his biggest gamble yet with Tiffany & Co. With this $16 billion acquisition, LVHM strengthened its presence in the fine jewelry market and in the United States.
Alexandre Arnault at the helm of Tiffany's recovery
Alexandre Arnault , 30, the third of Bernard's five children, has been appointed to lead the cleanup operation. He will have to prove he is capable of turning around one of the company's biggest brands. If he succeeds, he could become his illustrious father's heir.
Among the Arnault family, Alexandre is often described as the most enterprising. He cultivates an image of a committed and modern leader , regularly promoting Tiffany on his Instagram account while sharing carefully selected moments from his personal life.
Connected to the worlds of startups and street culture, Arnault counts Snap Inc. founder Evan Spiegel and Jay-Z among his connections. This gives an idea of how he plans to reshape the company. One priority is expanding the brand's customer base. Tiffany is still synonymous with jewelry purchased for formal occasions (engagement rings, wedding bands, etc.). The company is largely absent from areas such as luxury watches , handbags, and fragrances, strong categories for rivals like Hermès and Cartier.
Major LVMH brands provide insight into strategy
LVMH's other major jewelry brand, Bulgari, offers some clues about where Tiffany might be headed . The Rome-based company has seen its revenue more than double since LVMH acquired it in 2011.
Tiffany will launch a new watch model before the end of next year, after hiring a former Chanel executive. Silver jewelry lines, including its Return to Tiffany and Heart bracelets, will remain core offerings. There will also be experimentation, for example with Supreme. LVMH understands that shaking up the Tiffany coconut tree will take time. Investors have been warned.
Offering high-end products is important, explains Stanislas de Quercize, former president of Richemont (Cartier and Van Cleef & Arpels) in France. While affordable luxury helps attract customers, a successful brand image thrives on "dreamy prices," he says.
Traps to avoid
Dusting off the legendary maker of diamond engagement rings and necklaces is a risky undertaking. The young Arnault has already experienced this. One of the first missteps was a marketing campaign whose name translates as " Not Your Mother's Tiffany ." The campaign generated an immediate reaction on social media. It must be said that it went against the idea of the "family jewel" passed down from generation to generation, which was almost synonymous with Tiffany's & Co.
The " Not Your Mother's Tiffany " campaign ended after a short run, although Arnault says silver jewelry sales jumped shortly afterward. " It must have been successful, " he says. "The buzz it generated allowed people who had never heard of Tiffany to join the conversation."
Tiffany's: A More Popular Brand in Europe?
Growth opportunities also lie outside the United States. Tiffany's & Co. remains a house with a strong focus on North America. As such, a new flagship store will be created in Paris .
