Tiffany Makeover Better Than Takeover

Implications: 1.  Tiffany & Co. is one of the global leaders in the luxury jewelry space; the strategic direction in merchandising, marketing and store operations have proven the company has a strong and viable- business platform  2.  LVMH is a global leader in the luxury apparel/accessory space, but has not proven to understand or add shareholder value to pure players in the jewelry space ( eg: DeBeers retail stores)

Analysis: The market has shifted to a new generation of consumers.   Baby boomers  - once the focus of all marketing and merchandising efforts - are no longer the sweet spot for retailers.  

While the focus has turned to Gen X and Gen Y buyers in the apparel space, the jewelry industry as a whole has lagged behind.   As Tiffany & Co. has grown over $1 billion in retail, the company has greater exposure in market shifts.   But it is also apparent that LVMH also missed the target with DeBeers retail stores and has yet to be considered a serious competitor among other leading luxury jewelers.

The DeBeers LV joint venture has undergone several management, merchandise and store format changes since launching in December 2002.  There is very little consistency between its London, New York and Los Angeles stores.  In less than five years, there have been two chief executives at the helm in North America.

Both jewelry companies still need to find a better balance in the market to appeal to younger, affluent consumers who have a more modern taste.   Fresh design talent, relevant merchandise and modern marketing strategies are still needed for both companies.  At present, neither may have the management team in place to increase shareholder value in the jewelry space.

So until LVMH has proven its ability to lead in the jewelry space with a successful formula for DeBeers LV, Tiffany & Co. shareholders may best be served by the additions to its management team and board of directors who can add direction and relevance to existing the Tiffany & Co. business platform.