5 Things Tiffany Brings to Bernard Arnault and LVMH
Click here to read the full article.
Luxury titan Bernard Arnault knows fine things.
Not only does he oversee the world’s fourth-largest fortune — pegged at $106.23 billion by Forbes — he leads LVMH Moët Hennessy Louis Vuitton, home to Louis Vuitton, Givenchy, Fenty, Christian Dior, Hublot, Bulgari and scores of other high-end brands.
More from WWD
Arnault could have bought almost anything. So why is he spending $16.2 billion to buy Tiffany & Co.? Here are five things LVMH and Arnault will get when they officially bring the jeweler into the fold next year.
1. Deep American Roots
New York-based Tiffany was founded in 1837 by Charles Lewis Tiffany, an entrepreneur who was acutely aware of the power of branding. Early on, he started packaging his wares in the now-famous robin-blue boxes, realizing the power in the big reveal of such a precious gift. And when patrons came to his store trying to buy just the box, he is said to have declined the sale.
The company also introduced the Blue Book catalogue, the modern engagement ring with the Tiffany setting and had its star turn in Truman Capote’s “Breakfast at Tiffany’s,” which was immortalized by the film with Audrey Hepburn.
2. A Freshened-up Flagship on Fifth Avenue
Tiffany’s iconic flagship at 727 Fifth Avenue is getting freshened up under the guidance of chief artist officer Reed Krakoff.
The brand will move to a temporary base on 57th Street as the 10-story flagship, which opened in 1940 and was one of the first stores in the world to have central air-conditioning, will be shut down completely until 2021.
Tiffany expects the renovation to boost its capital expenditures by 1 to 2 percent a year — or up to $5.6 million — to polish the jewel.
3. Sustainable Access to the Source
Tiffany has been investing in bringing its supply chain for diamonds and other materials in house for 20 years.
The brand has operations in Belgium, Botswana, Mauritius, Vietnam and Cambodia, where people cut and polish rough diamonds from what it has described as “responsibly managed mines” in Botswana, Canada, Namibia, Russia and South Africa.
In January, Tiffany stated sharing with consumers the provenance of its newly sourced diamonds, which were individually registered and tagged with a serial number too small to be seen by the naked eye.
4. Global Appeal
As it moves over to the LVMH portfolio, Tiffany will bring with it 321 stores that it operates directly. While about 93 of its doors are in the U.S., growth is expected to come from the other side of the Pacific.
The brand has 34 stores in China and plans to keep growing in the country, which is seen as the driver of the luxury market for the next decade and beyond.
To appeal to Chinese Millennials, the company recently presented the “Vision & Virtuosity” exhibition in Shanghai, featuring a 128.54-carat Tiffany Yellow Diamond, an original script of “Breakfast at Tiffany’s” with Audrey Hepburn’s personal annotations, the 1845 Blue Book and pieces from the archive.
5. A Companion for Bulgari
LVMH already bought its way into the high-end jewelry market with a 2011 deal that saw it take control of Bulgari. But the luxury giant is not just buying up some of the competition, it is arming itself to double down against Cartier owner Compagnie Financière Richemont.
While brands in the LVMH empire typically stand on their own, having a bigger presence in the world of high-end baubles will help the company take market share.
Sign up for WWD's Newsletter. For the latest news, follow us on Twitter, Facebook, and Instagram.
