How Will LVMH Redefine Tiffany?
Daniel Langer in JIng Daily
LVMH is one of the most successful companies in acquiring brands, injecting them with capital, talent, and letting them bloom. Christian Dior, Bvlgari, Fendi, and most recently, Rimowa, are all LVMH success stories. The recent bid for Tiffany & Co., America’s iconic jeweler, would not only be LVMH’s largest acquisition with a value of 14.5bn USD, but also its most challenging.
Tiffany has more than 300 retail locations around the world and annual revenue of approximately four billion USD. The brand, however, has been struggling over the last decade, with all efforts to revamp its course falling short. The reasons are multifold and homemade. Like many other luxury brands, Tiffany underestimated the millennial challenge and was slow to adjust. At many Tiffany locations, an instore shopping experience can feel old-fashioned, and not on par with the expectations and tastes of younger consumers.
To attract those, Tiffany has launched multiple entry-level collections at low price points instead of creating experiences that would attract this target group, a typical mistake in luxury brand management and one many other brands have done as well. The focus on cheaper items, however, has brought a different demographic into their stores, impacting the experience of those clients seeking to buy high-end jewelry and who expect more privacy, more personalized service, and a highly sophisticated shopping environment.