Tiffany & Co. Holiday Sales Rise Despite Pandemic

Tiffany & Co. stopped to take one more chance to sparkle before getting folded into Bernard Arnault’s LVMH Moët Hennessy Louis Vuitton. 

The jeweler said sales for the November and December period rose about 2 percent from a year earlier, setting a record for holiday sales at the company. 

Alessandro Bogliolo, chief executive officer, said: “In the midst of a worldwide pandemic and its dynamic impacts, these all-time high preliminary holiday period sales results, which follow a strong third quarter, reflect the successful convergence of our multiyear sales strategies with respect to the Chinese mainland (greater than 50 percent increase from prior year), e-commerce (greater than 80 percent increase from prior year), increasing average unit retail prices and accelerating product innovations.”

Net sales in the Asia-Pacific region rose 20 percent, while Japan, which is accounted for separately, increased by 8 percent. The Americas region saw sales fall by 5 percent while Europe declined 8 percent. 

The holiday sales gains expanded on Tiffany’s showing in the third quarter, when net earnings jumped 52 percent to $119 million as sales slipped 1 percent to $1 billion, but rose 1 percent in comparable, constant currency terms. Operating margins also increased 470 basis points to 16.4 percent of sales from 11.7 percent for the quarter.

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“This year has certainly stress-tested the corporate strategies we set in 2017 to strengthen the brand and win in the highly competitive global luxury jewelry market,” the ceo said.

Bogliolo and chief artistic director Reed Krakoff have been working to revamp Tiffany, breathing new life into what is one of the very few true American luxury brands. 

The company’s roots go back to 1837 when Charles Lewis Tiffany opened his jewelry store in New York. The company was a pioneer, with its Blue Book, its dedicated hue, its famed boxes with white bows and its star turn in Truman Capote’s “Breakfast at Tiffany’s” and in the film starring Audrey Hepburn.

Bogliolo and Karkoff were able to take that heritage and set an expansion course, especially in China, teeing up the next leg of growth for LVMH.

There’s more than a little professional pride at stake in Tiffany’s holiday gains, given just how nasty the company’s fight with LVMH became as the two lurched from signed deal to court fight to a new deal with a somewhat lower, $16 billion price tag. (The companies initially agreed to a $135-per-share buyout in 2019 and the two sides reset that to $131.50 in October).

Along the way, the Paris-based luxury giant declared in court papers: “The business LVMH proposed to acquire in November 2019 — Tiffany & Co., a consistently highly profitable luxury retail brand — no longer exists. What remains is a mismanaged business that over the first half of 2020 hemorrhaged cash for the first time in a quarter century, with no end to its problems in sight.”

Given the deal reset and the strong showing in the third quarter and over the holiday season, that now looks like a bit of legal bluster in the heat of a court standoff. 

Tiffany will strengthen LVMH’s position in hard luxury and also give it a much stronger foothold in the U.S. market. 

Arnault is expected to keep with his practice of installing someone from within the LVMH empire to run the business. 

Sources have pointed to Anthony Ledru, LVMH’s executive vice president of global commercial activities based in Paris, as among the top candidates to move into the corner office and succeed Bogliolo.

In Tiffany’s sales update, chairman Roger Farah thanked Tiffany’s employees on behalf of the company’s board and specifically mentioned Bogliolo in a manner that seemed to be something of a warm send-off. 

“We are so proud of all the employees at Tiffany whose sound strategic decisions and collective actions allowed the company to persevere in this challenging and ever-changing year and raise the standard of stewardship for a global luxury jeweler,” Farah said. “We congratulate and thank Alessandro for the remarkable achievement of elevating and modernizing the brand over the past three years, and the extraordinary management team and all the employees for a job superbly done.”

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