American jewelry brand Tiffany has been taken over by the world's largest luxury goods group LVMH for a year, and the changes that have occurred during this period are attracting high attention from the industry.
According to Fashion Business News, LVMH officially completed a acquisition deal with Tiffany in January this year with a total value of about US$15.8 billion, and then appointed Michael Burke, CEO and Chairman of Louis Vuitton, as chairman of Tiffany, and Alexandre Arnault, son of LVMH Chairman and CEO Bernard Arnault, as executive vice president, responsible for products and communication.
In July this year, LVMH also dug up Nathalie Verdeille, who has been creative director of Cartier jewelry since 2005, and appointed her as Tiffany Jewelry and Senior Jewelry Art Director. Three months later, LVMH appointed former P&G executive Andrea Davey and former Burberry executive Gavin Haig as chief marketing officers and chief business officers, each step clearly points to the goal of cultivating Tiffany into the jewelry industry "LV".
Under the guidance of a new team of French executives sent by LVMH and talents from outside, Tiffany's brand positioning and product pricing have indeed improved. According to Dow Jones , the price of some Tiffany series has increased by 7% to 13% compared with 2020, and the proportion of silver jewelry jewelry products with an average price below $530 has decreased. In terms of
products, Tiffany tries to continue the brand's American genes while grasping the higher-end market. On November 11, Tiffany's cooperation series with the street fashion brand Supreme was officially launched, and street elements were incorporated into Tiffany's classic products. One of the pearl necklaces priced at US$1,250 is approximately RMB 22,500 and has become the most popular product. After the sale, the price in the second-hand market rose by 36% to US$1,700 is approximately RMB 30,000.
Almost at the same time, Tiffany showed off one of the most expensive jewelry in the brand's history at the fastest recovery from the epidemic, "World's Fair Necklace". This platinum necklace is called "The Empire Diamond". It is a symbol of the landmark building of Tiffany in New York, the birthplace of Tiffany. Industry experts estimate that the price will be between 20 million and 30 million US dollars.
In the eyes of LVMH, Tiffany's youth is far from enough. It is going to become the LV
At the beginning of this month, Tiffany and the high-end watch brand Patek Philippe launched a limited-edition cooperation model Nautilus Ref.5711, as a commemoration of the 170th anniversary of the cooperation between the two, once again becoming the focus of the luxury fashion industry. According to information, Patek Philippe signed a distribution contract with Tiffany as early as 1851, designating Tiffany as the brand's first official partner in the United States. This joint series is only sold in Patek Philippe and Tiffany boutique stores in New York, Beverly Hills and San Francisco in the United States, with a public price of US$52,635.
It is worth noting that one of the cooperation Nautilus Ref.5711, which was officially provided by Patek Philippe, participated in the auction of the New York venue in Fuyi on December 11. The final transaction price was US$5.35 million, which is 1 million times the original price. After adding the commission, the buyer will have to pay a total of US$6.5 million, which is approximately RMB 42 million. All income from the auction of this watch will be donated to Nature Conservation Association (TNC) for charity.
In May this year, Tiffany also launched its first engagement series designed for men, including a ring with 4.3 carat diamonds to further expand the brand's engagement ring business, which currently accounts for 26% of the brand's total revenue.
Although LVMH has never released Tiffany's specific performance data, judging from the continued high growth performance of the group's jewelry and watch division this year, Tiffany's performance has recorded strong growth in the past year.
In the nine months ended September 30, sales of LVMH jewelry and watch division increased by 2.7 times year-on-year to 6.16 billion euros, an increase of 3.894 billion euros from the same period in 2020, while Tiffany's sales in the first nine months of 2020 were US$2.3 billion.
However, Tiffany and LVMH still have cultural differences and other problems that require time to be run-in.
After being taken over by LVMH, Tiffany's original executive was quickly banned by the French team arranged by LVMH. Old employees at the brand's US headquarters once jokingly claimed that learning French was a prerequisite for keeping their jobs. In April, an unauthorized memorandum called "French-US Cultural Differences and Etiquette". Tiffany's new CEO Anthony Ledru then condemned the memorandum, objecting to the idea that people must assimilate to succeed at work.
Alexandre Arnault, who is responsible for product and communication execution, is also controversial because his father is Bernard Arnault. According to an insider of Tiffany to . Wall Street Journal , at the meeting, Alexandre Arnault's sentence "I talked to Bernard Arnault, this is the opinion we reached" will affect the direction and outcome of the entire discussion.
In addition, the scale of executive meetings that had previously participated by as many as 40 people was reduced to about 10 people. In response, Anthony Ledru said that controlling the number of participants will help speed up the decision-making process. To maintain balance, he has delegated some corporate functions and handed over more responsibilities to regional departments.
In addition to bridging the cultural gap between French and American companies, LVMH also faces another strategic challenge, namely how to improve Tiffany to compete with jewelry brands such as Cartier, , Chopard , and better awaken the brand's sleepy value.
From the iconic blue box to the engagement ring, Tiffany occupies a special place in American culture. However, Tiffany's advertising marketing campaign in the US market in August this year has caused controversy over suspected insulting long-term consumers who pushed the brand to the peak.
In the advertising blockbuster released by Tiffany, the model wore casual vests and jeans, and no longer exquisite makeup and hair, wearing Tiffany's sterling silver chain necklace worth up to $2,600 and a $1,575 bracelet. The graffiti on the wall next to it reads: "Not Your Mother's Tiffany" (not your mom's Tiffany), which is interpreted by consumers as an offense to those "moms" who buy Tiffany.
Tiffany's advertising marketing campaign in the US market in August this year caused controversy
"Slandering your existing consumers will not let new consumers fall in love with you." "I think my mother no longer needs to buy Tiffany anymore. It insults the generations who brought Tiffany to the peak." "I am surprised that they no longer want people over a certain age to become their customers. After all, we have been the most loyal and emotionally oriented over the years."
However, some analysts believe that even if the feelings of some old customers are hurt, Tiffany is just expressing the brand strategy over the past few years more bluntly and truly. HSBC Head of Consumer and Retail Research Erwan Rambourg bluntly said Tiffany must accept the results of losing some consumers, after all, they are facing competitors that are Cartier, not other American jewelry brands such as Zales.
In 2017, Tiffany, who had experienced three consecutive years of decline in performance, realized the importance of enhancing the differentiation between itself and other high-end jewelry brands. launched the Hard Wear accessories series on the innovation of product to break the brand's previous elegant and noble inherent image. In the following three years, through a large number of marketing initiatives such as opening Blue Box Cafe and holding exhibitions, Tiffany has truly achieved a youth from product to marketing.
Judging from the candidates for advertising blockbusters, Tiffany's recent youth strategy is also particularly outstanding. After officially announcing that Chinese star Yi Yang Qianxi was upgraded to global spokesperson, Tiffany also announced this year that Rosé, a member of the popular Korean idol group Blackpink, was the new brand ambassador and released an advertising blockbuster film shot by her.
Then in August this year, Tiffany released a brand new brand advertisement with the theme of "About Love", co-showed by international superstar Beyoncé and her husband, rap star Jay-Z. Both were appointed as Tiffany's latest brand ambassadors.
In the commercial, Beyoncé wore a 128.54 carat Tiffany legendary yellow diamond appeared in front of the camera, becoming the first black woman to wear Tiffany's iconic diamond. Alexandre Arnault, executive vice president of product and PR at Tiffany, said that Beyoncé and Jay-Z couple are highly consistent with Tiffany's values and will produce more videos in the future.
Tiffany recently joined hands with artist Daniel Arsham to create a sculpture called "Blue Box, Circa 3021". The whole is inspired by Tiffany's classic Blue Box structure and explores alternative sculpture creations through the eroding future ruins aesthetics. The product is limited to 49 pieces and has been released in the brand's New York flagship store on September 9.
What is certain is that after young people turn over, Tiffany has long been in different camps with more traditional high-end jewelry brands, which is also an important reason why LVMH targets Tiffany.
Some people believe that this is actually a formula that LVMH has been tested when innovating its brand. Whether it was Celine, which was helmed by Hedi Slimane, or Louis Vuitton men's clothing after Virgil Abloh joined, they had experienced such a controversial period, but in the end the brand achieved outstanding results.
According to Anthony Ledru, sales of high-end jewelry worth over $100,000 this year increased by 50% compared to 2019, and average consumption for consumers under 40 increased by 35%. According to another person familiar with the matter, Tiffany's sales have increased by 30% this year compared with 2019.
In order to seek greater growth space, Tiffany is renovating the flagship store on Fifth Avenue in New York, and also renting an old palace in Milan , planning to transform it into a flagship store in 2023, and will open more new stores in Paris, Beijing and Shanghai. “We either make it bigger or not,” Anthony Ledru added.
Obviously, in the planning of LVMH, Tiffany must achieve the symbolic meaning of "the first high-end jewelry for young people" to be worthy of this most expensive acquisition in history.
(ladymax)
