Luxury goods group LVMH appointed two top executives from its Louis Vuitton brand and one of billionaire founder Bernard Arnault’s sons to run US jeweller Tiffany after its $15.8bn takeover was completed on Thursday.
Anthony Ledru, an experienced jewellery executive who previously worked at Tiffany before joining Louis Vuitton in 2014, will take over as chief executive.
Alexandre Arnault will effectively be his number two as executive vice-president for product and communications. The 28-year-old had been running LVMH’s luggage brand Rimowa since 2016 when he convinced his father to acquire the German suitcase maker for €640m. He helped attract younger customers to the brand through collaborations with star designers such as Louis Vuitton’s Virgil Abloh and Dior’s Kim Jones.
Michael Burke, the longtime chief executive of Louis Vuitton, will also serve as Tiffany’s chairman.
The three executives will be tasked with improving the performance of the 183-year-old icon of American retail, known for its diamond wedding rings, crystal glasses and other high-end gifts.
Tiffany’s robin’s egg blue boxes and shopping bags have long been a symbol of luxury, not only in New York where the brand was founded, but globally. Almost two-thirds of its 320 stores are outside the US, and expanding in Asia is likely to be a priority under LVMH ownership.
But analysts have said Tiffany needs to invest more in updating its stores and selling more online if it is to remain relevant to luxury consumers. LVMH is expected to seek to take the brand further upmarket to improve margins, similar to the turnround it carried out at Bulgari after acquiring the Italian brand in 2011.
Luca Solca, an analyst at Bernstein Research, welcomed the appointment of “a heavyweight team to lead Tiffany” and said that pairing “experienced managers with up and coming family members and possible future leaders” was a sound strategy.
In addition to Alexandre, three of Bernard Arnault’s other children also hold executive positions in the family-controlled empire that spans 70 brands, including Christian Dior and Moët & Chandon champagne.
The task at Tiffany will be made harder by the Covid-19 pandemic that crushed international travel and forced repeated store closures last year.
LVMH’s sales contracted 21 per cent on a comparable basis to €30.3bn in the first nine months of the year, while Tiffany’s fell 24 per cent to $2.3bn. Despite the pandemic, LVMH’s shares rose 22 per cent last year, making it Europe’s second-biggest company with a market value of €259bn.
The deal’s closing after more than a year ends an at-times rocky road towards the luxury sector’s biggest-ever acquisition. LVMH had threatened to walk away from the deal, arguing that the price it agreed to pay just before the pandemic was no longer fair, leading to an acrimonious public battle and lawsuit with Tiffany.
LVMH later secured a small price cut, paving the way for the deal’s ratification by shareholders last week.
“I am pleased to welcome Tiffany and all their talented employees in our group,” said Mr Arnault in a statement. “We are optimistic about Tiffany’s ability to accelerate its growth, innovate and remain at the forefront of our discerning customers’ most cherished life achievements and memories.”
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