LVMH has completed its $15.8 billion acquisition of Tiffany — and is wasting no time shaking up the executive ranks of the New York-based jeweller.
Louis Vuitton vice president of global commercial activities Anthony Ledru has been named Tiffany’s new chief executive, replacing Alessandro Bogliolo, who will depart later in January. The move is just one part of a wider reorganisation. Rimowa head Alexandre Arnault is now executive vice president of product and communications, while Louis Vuitton global chief executive Michael Burke will chair Tiffany board of directors.
Ledru is a rising star at LVMH, playing a pivotal role at Louis Vuitton since arriving at the leather goods brand in 2015 as chief executive of its North American operations, only to be promoted to lead global commerce two years later.
But it is his significant experience in “hard” luxury, particularly in the US market, that made Ledru the top candidate. Not only did he lead global sales at Harry Winston, followed by two years as vice president of the North American market at Tiffany before heading to Louis Vuitton, but he also spent much of his early career climbing the ranks at Cartier, where he managed the Richemont-owned brands’ US retail network.
The experience at Tiffany is important: he knows how the business is run, and understands its US operations, which still make up a large portion of its sales. But Cartier is the business that Louis Vuitton wants most to beat. Its brand positioning and stability is unmatched by any competitor. If Cartier is the Chanel of fine jewellery, then LVMH is hoping Tiffany could become the Dior.
Tiffany has an opportunity to gain some traction. Not only is its business booming in China, but it’s under-penetrated in Europe, where Cartier sets the standard.
But while the jeweller has a strong brand that is recognised globally, it’s in need of modernisation. This is especially crucial if it’s going to resonate with the next generation of luxury customers.
Alexandre Arnault, a son of LVMH chief executive Bernard Arnault, has had notable success refreshing German luggage goods brand Rimowa, which the group acquired in 2016 for €640 million ($774 million). He successfully turned the elite, if once-rigid, label into one of the most fashionable luxury status symbols on the market by focusing on quality, distribution and hype. Collaborations — including those with Off-White and Supreme — have landed the brand press mentions worthy of a major sneaker drop.
At Tiffany, Arnault may choose to expand the jeweller’s already-famous designer-partnership portfolio. In the past, most of these team-ups — with the likes of Elsa Perretti and Paloma Picasso — have been long-term ventures. There is room to try new formats. As Arnault arrives, chief artistic director Reed Krakoff and chief brand officer Daniella Vitale are both stepping down from their roles.
On joining Tiffany, Arnault is also relinquishing his chief executive role to Hugues Bonnet-Masimbert, but will remain non-executive chairman of the luggage label.
Both Ledru and Arnault’s ability to tap into LVMH resources — its retail real estate network and branding and marketing capabilities in particular — could help elevate Tiffany to a new competitive level. That, combined with Ledru’s understanding of the US luxury market, which has experienced a renaissance during the pandemic, puts them at a unique advantage.
However, the new Tiffany leadership team is strikingly similar to the former regime, as well as most c-suite executives in the fashion business, in one way: it is made up of white men. In recent years, many companies have hired chief diversity officers to help recruit more women and people of colour into senior leadership roles, but the majority of company boards and executive teams are not as diverse as some business experts would argue that they need to be.
For example, a 2015 McKinsey & Co. study of 366 public companies found that those with more diverse leadership in terms of gender were 15 percent more likely to have financial returns that exceeded the industry median. Those that were more diverse in terms of race were 35 percent more likely to have higher returns. In order to successfully address the needs of a new generation of consumers, Tiffany may need to evaluate whether there is proper representation within its own ranks.
Editor’s Note: This story was updated to include additional analysis regarding diversity on Tiffany’s executive team.
Disclosure: LVMH is part of a group of investors who, together, hold a minority interest in The Business of Fashion. All investors have signed shareholders’ documentation guaranteeing BoF’s complete editorial independence.