French luxury group LVMH has big plans for jewellery chain Tiffany, which it recently acquired for some 13 billion euros after a fierce takeover battle. The ambitions: more gold, more gemstones and generally a more upscale image.
A more luxurious profile
This is what sources quoted by Reuters suggest. LVMH wants to give Tiffany a more luxurious profile. Tiffany's current range is extremely broad: from affordable silver jewellery to exclusive masterpieces costing several million. LVMH does not necessarily want to get rid of the silver 'entry-level' jewellery, which generates attractive profit margins, but is generally aiming for a more exclusive image with more high-end pieces.
LVMH also has plans to give Tiffany a greater presence in Europe and Asia. Today, about a third of Tiffany's 320 outlets are located in the US. Moreover, many of those stores are outdated and in need of a thorough refurbishing.
LVMH organised a so-called 'town hall' for the 14,000 employees of Tiffany on 8 January. Reuters' sources, who attended the event, outlined the initial plans of the new management, installed by the French group a day earlier. Another element that emerged was an expansion of the chain's watch range.
"LVMH can give Tiffany the time and money it needs to invest heavily in the range and stores, and then wait for that to pay off in the medium term," they say.
Signs of recovery
The luxury group also recently announced its annual results. LVMH saw its turnover drop by 17 per cent, and its profit went down by 28 per cent as a result of the Covid crisis. The company points out that the fourth quarter is already showing good signs of recovery. In Asia, market recovery is in full swing.
"LVMH showed remarkable resilience against the unprecedented health crisis the world experienced in 2020," said chairman and CEO Bernard Arnault. "In a context that remains uncertain, even with the hope of vaccination giving us a glimpse of an end to the pandemic, we are confident that LVMH is in an excellent position to build upon the recovery for which the world wishes in 2021 and to further strengthen our leadership in the global luxury market."