Tiffany hopes to regain its sparkle with new owners
One morning earlier this week a small crowd queued patiently on Fifth Avenue. Once the guard eased open the doors, uniformed staff were on hand to usher in customers, some upstairs to the cafe, others to browse the store’s offerings, from diamond engagement rings to novelty items like the $180 dog bowls.
A team of high school majorettes, in town from Texas to perform in Macy’s Thanksgiving Day parade, took selfies and mingled with tourists and older ladies in heavy makeup.
While Tiffany’s flagship store is as drenched in luxury as ever, the message is clear: you don’t have to be one of New York’s wealthy elite to treat yourself to a bit of sparkle or a spot of breakfast here. It’s open to everyone.
“It’s a label thing,” said Emily Brewster, 14. “And at the same time you know it’s going to be worth it.”
The company, which has a long history as America’s most glamorous jewellery retailer, is being bought up by French fashion house LVMH, it was announced this week. It raises the question: will LVMH still want to target customers who are more likely to buy a sterling silver heart than a string of diamonds? Or will the new owner prefer to burnish the Tiffany brand by taking it upmarket?
“I want them to continue to cater to the general public because that’s who makes the brand. It’s not the fancy people,” says Kelly Hammer, a 39-year-old former schoolteacher who lives in New Mexico.
She runs a Tiffany-focused Facebook group with more than 15,000 members and owns hundreds of Tiffany pieces herself, funding her collection by reselling jewellery items online.
Ms Hammer is, she admits, obsessed with the brand, so much so that her husband even had a gun made for her in Tiffany’s distinctive robin’s egg blue.
“For me, it’s way more than a brand,” she says. “It makes me happy.”
But Tiffany hasn’t done enough to please investors in recent years. The share price slid 40% between mid-2014 and mid-2016, since when it’s been on something of a rollercoaster ride.
Bernard Arnault, Europe’s richest man who is at the helm of LVMH, is betting that Tiffany & Co can regain its former sparkle. But the purchase is a gamble on just how much Tiffany’s past will carry it through to a more glittering future.
The company, founded in 1837, is credited with inventing the modern engagement ring and pioneering the mail order catalogue. First ladies since Martha Todd Lincoln have worn Tiffany jewels and its designs have graced sports trophies, church windows and the seal on the American dollar. It has drawn in tourists for 150 years or more.
But it was the 1961 film “Breakfast at Tiffany’s” starring Audrey Hepburn, that cemented its status in the public imagination and paved the way for mainstream popularity.
It is a store, Ms Hepburn’s Holly Golightly declares, where “nothing very bad could happen”. In the film, even the request to have a toy ring (from a box of Cracker Jacks snacks) engraved is treated with consideration. And Ms Golightly is very much a wayward maverick rather than a high class debutante.
The company’s chairman at the time Walter Hoving knew exactly what he was doing, says John Loring, Tiffany’s former design director.
“He was completely aware of the implications of everything,” he says. Mr Hoving lobbied against having Marilyn Monroe in the lead role and took a tough line with the film company before opening the doors to the cameras.
But in the end it proved a brilliant marketing move, says Mr Loring. “Suddenly it was everyone’s Tiffany and they could go in.”
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The film helped to launch Tiffany’s global expansion. In 1963, it opened its first branch in San Francisco. Today, it has more than 300 stores around the world, including more than 30 in China, its fastest growing market.
Under chief executive Alessandro Bogliolo, who has been in charge since 2017, Tiffany has begun a three year refurbishment of the Fifth Avenue store and more frequent jewellery releases, including partnerships with stars like Lady Gaga and Elle Fanning. It will replicate the New York store’s cafe in China.
“They have taken a lot of steps,” said Lorraine Hutchinson, research analyst at Bank of America.
She said a sales uptick in early 2018 suggested the company’s investments were working, but US-China tensions, a relatively strong US dollar and Hong Kong protests have hurt tourist spending, and sent its shares back down.
Speaking to investors this week, LVMH chief financial officer Jean-Jacques Guiony said Tiffany needs time and money to implement its plans. As a standalone, publicly-listed company, he argued, those were luxuries it didn’t have.
“When you have to do quarterly reporting, it’s not that simple. The pressure is tremendous,” he told analysts this week. “By buying Tiffany we would take them off the market’s eyes to some extent.”
Now, as LVMH prepares to absorb Tiffany into its portfolio, the firm’s many existing fans are hoping it won’t lose its “essence” .
Some though are bound to remain loyal whatever happens.
In March Kelly Hammer will go to the New York store for the first time in her life, a special trip to celebrate her fortieth birthday.
“I’m going to be there for a week and the hotel is right next door,” she says.
“I’m going to spend literally eight days inside that store.”