Skip to main content
BoF Logo

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.

Turning Around Tiffany

Tiffany chief executive Frederic Cumenal shares his plans for remaking the 179-year-old jewellery house along with its new advertising campaign, conceived by Grace Coddington.
  • Lauren Sherman

NEW YORK, United States — "I'm a bit of a snob," says the ornery and amusing stylist Grace Coddington, smiling in the eggshell blue offices of Tiffany and Co. "I only want do the best things."

Coddington, who stepped down from her full-time role as creative director of American Vogue this past January, joined the jewellery house as a "creative partner" in April. In recent months, Coddington has worked in tandem with global marketing creative director Toni Lakis to reshape the brand's fashion advertising, starting with a campaign shot by David Sims that will run in September print issues alongside a robust digital push, and a short film from R.J. Cutler, director of The September Issue, documenting the creative process.

With a concept that centers on the tagline "Legendary Style," the series features portraits of Elle Fanning, Lupita Nyong'o, Christy Turlington and the model Natalie Westling, all handpicked by Coddington. While the stylist found the idea of communicating something legendary a "bit daunting," she brought currency to the idea through the sharp lens of Sims, who photographed his subjects in colour in the studio, a departure from Tiffany's typical black-and-white, New York City street shots.


Elle Fanning stars in Tiffany’s new campaign for its "Tiffany T" collection | Source: Courtesy


The casting was surprising, too, given that Tiffany has never before used a celebrity in a campaign. “I’m also known not to like celebrity very much,” Coddington laughs. The goal, instead, was to “find people who are beyond the average celebrity,” she says. “They have to have more to them.”

In truth, the campaign stands distinctly apart from anything Tiffany has done before without, somehow, feeling unfamiliar. “I thought what was essential was to keep the blue, which was kind of a lovely blue anyway,” Coddington says of the house’s trademarked shade, which serves as a background for the portraits. She did, however, do away with the still life shots that traditionally sit on the left side of the brand’s double page spreads, instead using black-and-white close-ups of jewellery worn on the body, from diamond studs to the newly popular Tiffany T bracelet.

It's a moment, to be sure. But the partnership with Coddington is just the latest example of how the 179-year-old Tiffany and Co., one of America's only heritage luxury houses, is looking to reshape its image. In 2013, the company hired the modernist jewellery designer Francesca Amfitheatrof, who launched the clean-and-minimalist Tiffany T collection just a year later. In 2014, MAC alum Lakis joined. And just last week, former Coach creative director Reed Krakoff was officially brought on board to develop the gifts, home and accessories collection, which includes everything from to tabletop doodads and eyewear to leather goods, the designer's forte. Another collection, dubbed "Out of Retirement," features archived items that suddenly look new again, from a pair of squared-off tsavorite-and-diamond studs to an 18k-gold paper money clip, and is sold at Dover Street Market in New York.

My real mission for our company is to re-energise our spirit. We are perceived as a very classic brand and we need to regain a little bit of an edge.

If it sounds like Tiffany is trying to be more fashionable, that’s because it is. For the most part, the changes have been implemented or overseen by chief executive Frederic Cumenal, who joined the company in March 2011 after 15 years at French luxury conglomerate LVMH, where he held several roles in the company’s wine and spirits group.


Lupita Nyong'o in the new campaign for Tiffany & Co. | Source: Courtesy

Cumenal’s rise at Tiffany has been swift. The executive moved in just one year from a senior vice president role overseeing Asia-Pacific, Japan, Europe and “emerging markets” to senior vice president overseeing all regions. In September 2013, he became president, responsible for global sales, marketing, merchandising, design and distribution and joined the company’s board of directors. In April 2015, the board appointed him chief executive, replacing Michael J. Kowalski, who remains chairman.

But Cumenal’s rise comes at a challenging time for Tiffany, both domestically — its largest market, bringing in 47 percent of the business in 2015 — and in Asia, its most promising market. In Asia, Tiffany has faced the same problems as its competitors: the strength of the dollar, the tightening of anti-corruption laws in China, which has affected gifting, and the general slowdown of the luxury market. “While the brand is still held in high regard [in Asia], we have seen a slowdown internationally in terms of luxury expenditures, and that has affect Tiffany’s numbers in the past year,” says Neil Saunders, managing director of the Conlumino Group, a retail research agency and consulting firm. “It certainly has put the brake on Tiffany expanding in those regions.” Domestically, the strong dollar has also affected tourist traffic, but there are deeper issues at play. “The brand has lost at lot of traction with American consumers; it doesn’t have the shine it once did,” he adds. “Younger consumers have migrated away from it.”

Young people from the West don't believe the future is going to be better. If you ask the same question from people in the East, you will get the opposite answer.

In the 2015 fiscal year ending January 31, 2016, Tiffany and Co. generated $4.1 billion in net sales, down 3 percent from the year before. The greatest percentage dip was in was in non-reportable segments — including emerging markets and wholesale of diamonds — which fell 13 percent to $108 million from $124 million in 2014. The Americas region, Tiffany's largest source of revenue, saw sales shrink $86.5 million (or 4 percent) to just under $2 billion.


Net earnings last year were $3.59 per diluted share, down 4 percent from 2014. And 2016 will be just as challenging, if not more so. In the first quarter of the fiscal year ending May 26, the company reported $891 million in global sales, down 7 percent from the year previous. Sales at stores open at least one year declined 9 percent. In the US, comparable-store sales dropped 10 percent, the greatest decline since the height of the financial crisis, while comps were down 15 percent in Asia-Pacific. Net earnings, too, were down to $87 million, or $0.69 per diluted share, compared with $105 million, or $0.81 per diluted share, in 2015.

The market has not reacted kindly to Tiffany’s reports, with the stock hovering around $60. (The 52-week low was $56.99, while the high was $96.43.) In the month of May, when its first-quarter earnings were announced, shares plunged 13.2 percent, according to S&P Global Market Intelligence.

To some extent, Tiffany’s challenges are universal: Hong Kong and Macau are down, Europe is down. But while many brands are struggling in mainland China, thanks to unfavourable exchange rates and overexpansion, the company says it’s still growing — by double digits, in fact.

It all boils to “lack of confidence from consumers,” says Cumenal in his office in New York’s Flatiron neighbourhood. “In the Western world, consumers don’t have hopes. When you look at all the market research on a macroeconomic level, young people from the West don’t believe the future is going to be better. If you ask the same question from people in the East — the Chinese in particular — you will get the opposite answer. They’re going to say that the future is going to be better.”

But the Tiffany brand — so clearly linked to little blue boxes and, of course, Audrey Hepburn — is dusty and desperate for a refresh. In Millward Brown’s 2016 report ranking the Top 100 Most Valuable Global Brands, Tiffany & Co. saw its brand value drop 24 percent to just under $2.5 billion, down from $3.2 billion in 2015.

“My real mission for our company is to bring justice to the spirit — and to maybe re-energise that spirit,” Cumenal says. “We are perceived as a very classic brand and we need to regain a little bit of an edge, and do a better job of delivering on these stories… and writing new stories,” he continues.

Beyond marketing, Tiffany is telling “new stories” through a series of product launches, from the aforementioned T by Tiffany range and forthcoming Reed Krakoff designs to reinterpretations of old favourites. “We have beautiful collections, but by refreshing them, we can give justice to the initial intention,” he says. “The key to that is relevance.”

The “Return to Tiffany Love” collection, for instance, is a repackaging of the house’s entry-level Love jewellery line that features $400 lock-and-key charm bracelets and $175 branded key rings. The collection first came to prominence during the early 1990s, when the US was in a deep recession and Tiffany needed to communicate that the brand offered more than expensive diamond rings. Today, it’s a play to engage Generation Z with a tagline that reads: “#Lovenotlike.”


Whether or not the recently introduced hashtag campaign takes remains to be seen. In 2015, the fashion jewellery category decreased by $39.1 million, or 2 percent to just over $1.7 billion, which the company says can be traced to the decline in sales of entry-level price point jewellery, especially silver.

That being said, more accessible pieces like these remain the house’s bread and butter, particularly in China where the middle class is eager to buy into a piece of the dream. “The Chinese — not China — have been the main engine of growth for the past 15 years,” he says. “That’s the reality. China is going continue to be a major force.”

Cumenal is making a push to elevate the brand — and the price point. In Coddington’s “Legendary Style” campaign, there is not one bit of silver on display. The shift is evident in the rise in price-per-unit sales. While the number of units sold in the Americas decreased by 11 percent in 2015, the average price per unit increased by 6 percent. Same in the Asia-Pacific region, where the number of units sold decreased by 6 percent but the average price per unit increased by 4 percent. Some of this has to do with higher margins made on cheaper diamonds, but there is also a pointed effort to reach beyond occasional purchasers of luxury jewellery — those buying items for weddings, anniversaries, engagements — with the hopes of capturing the dollars of the high net worth individual who spends on a more regular basis. While the fine and solitaire jewellery category decreased $19.4 million, or 2 percent, to $911 million in 2015, that decline was offset by higher sales in statement jewellery, according to the company.

And yet, at the same time, the accessibly priced silver is having something of a fashion renaissance, seen with popular jewellery lines like Sophie Buhai and Charlotte Chesnais. In fact, much of the fashion jewellery emerging today references the work of Elsa Peretti, whose Tiffany collection was first introduced in 1974. “We love silver and we clearly believe that we can do amazing things with silver,” Cumenal says. “But we don’t think in terms of material, For us, all materials are noble. The lines are blurred. We have to stop thinking about silver versus diamonds versus coloured stones. That’s the producer’s point of view. That’s not a consumer’s point of view.”

Social mores are also shifting. In particular, people in the West are marrying later in life, or not marrying at all. Fewer marriages means fewer engagements and, in turn, a decline in the sales of diamond rings of the kind Tiffany is best known for. Consumers also more concerned with the sourcing and origins of diamonds, often not participating in the “diamond myth.” Sales in the engagement jewellery and wedding bands category decreased by $74.9 million, or 6 percent, in 2015 to $1.2 billion, thanks to decline in both solitaire diamond rings and wedding bands.

What’s more, those who are getting married are perhaps less likely to buy a traditional diamond engagement ring than in the past, with alternatives like grey diamonds and coloured stones emerging as trendy favourites. (About 13 percent of brides prefer alternative stones, according to a survey by Wedding Wire.) And right now, diamonds are cheaper: In 2015, sales at diamond conglomerate De Beers were $4.7 billion in 2015, down 34 percent from $7.1 billion in 2014. Lower diamond prices might make for better margins, but only if consumers want to buy the end product.

Cumenal, unsurprisingly, is undeterred. “Tiffany is about love; that's the core,” he says. “Love is not exclusively the traditional couple getting and engaged and getting married.” In 2015, the company made news by featuring a gay couple in an engagement ring advertisement, tapping into the still-new same-sex wedding market. And while marriage may not be as popular as it once was in the West, it’s a burgeoning business in the East, which generates between $50 billion and $80 billion a year, according to analysts. “In China, 13.2 million couples are getting engaged every year,” he says. “Fifteen years ago, very few were buying rings. Now, it’s 30 to 40 percent, and we expect it to increase even more, maybe even to 80 percent.”

Spoken like the seasoned LVMH executive that he once was, Cumenal is taking the long view. Luxury brands invest for years ahead, not quarters. That attitude is underscored by the company’s commitment to responsible mining of diamonds, gemstones and precious metals, but also in its dedication to the arts. The executive is on the Board of Trustees of the Whitney Museum of American Art, and is the lead sponsor for its next three biennials, tapping into the fashion-art association so many luxury brands have used (wisely) as a marketing pillar.

But Tiffany must also answer to public shareholders, a group that seems increasingly dissatisfied with the company’s results. Every so often, the jeweller emerges as a potential takeover target, with Cumenal’s former employer at the top of the list of buyers. “I think it makes sense to consider Tiffany as a possible M&A target,” says Luca Solca, head of luxury goods at Exane BNP Paribas. “The Tiffany brand has a lot of potential worldwide, [but it] seems to have struggled in recent times in producing shareholder value.”

But with a current market value of nearly $7.8 billion, Tiffany is still very expensive. “It’s not just the stock price; a potential buyer is taking over a business that does have issues and problems, and will perhaps require more investment,” Conlumio’s Saunders says. “If it becomes cheaper, then it could become more of a target, but it’s hard to see anyone making a move just now.”

However, as the company gets ready to report its second quarter earnings at the end of August 2016, the macro challenges it has faced are still very much present. “Let’s be clear: The stock market is not good. Not good for anyone, by the way,” Cumenal reasons. “We will have no benefit of being with someone else. We’ve got a very healthy balance sheet, we’ve got very clear plans. We, the board of Tiffany, collectively, don’t see any advantage of not being independent,” he continues. “So we are furiously and ferociously independent. We have access to all resources that we need. Again, the markets are dictating the pace.”

Indeed, Cumenal is choosing to focus on what he can control: Brand communications, product and, above all, maximising the reach of the Tiffany name. Analysts agree that marketing, such as Coddington’s new campaign, will be a big part of that, particularly in the US where the brand feels stagnant to consumers. Modernising the retail stores — especially those in malls, which don’t have the same charm as Tiffany’s Fifth Avenue flagship — will be a part of that as well. “A lot of this is about branding,” Saunders says. “The affluent younger shopper sees Tiffany as being very ‘old world’. I don’t think that’s what the modern consumer wants.”

And while that little blue box may feel ubiquitous in the US, it is Cumenal’s job to introduce it to new consumers and to also make others reconsider it. “We have the ambition of being a very important global luxury house,” he says. “But it’s not only about geography. There is no such thing as one core target. You will continue to see us operate at different price points, using different materials and a bolder style.”

Related Stories:

Michael Kors, Hermès and Tiffany Only Major Brands Underexposed to ChinaOpens in new window ]

Is Fine Jewellery Set for a Branding Revolution?Opens in new window ]

Distress in the $80 Billion Diamond MarketOpens in new window ]

© 2024 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions

More from News & Analysis
Fashion News, Analysis and Business Intelligence from the leading digital authority on the global fashion industry.
view more

Subscribe to the BoF Daily Digest

The essential daily round-up of fashion news, analysis, and breaking news alerts.

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.
© 2024 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions, Privacy Policy, Cookie Policy and Accessibility Statement.