LVMH has found integrating Tiffany & Co. a “challenge,” particularly with most of its employees still working from home, LVMH chief financial officer Jean-Jacques Guiony told analysts on an April 13 conference call.
LMVH completed its purchase of Tiffany in January.
“Integrating Tiffany is very important to us,” Guiony added, which means that LVMH is unlikely to consider future acquisitions in the near term.
“We don’t want to dilute our efforts,” he continued. “[Tiffany is] a big acquisition for us [and] our number one priority.”
Guiony later called Tiffany a “very strong brand” that it’s committed to changing, though he didn’t spell out exactly what those changes would be.
“The potential is tremendous,” he added. “We have said that the issue with Tiffany was their timing with the stock market was not appropriate, and the stock market was not giving them the time to develop the strategies that were needed to develop the brand.
“It will take years to do what we want to do with this brand, from a distribution, merchandising, and marketing viewpoint. It is a lot of work—we are committed to doing it.”
According to WWD, Alexandre Arnault, the brand’s new executive vice president of product and communications (and son of LVMH chairman Bernard), has been crowdsourcing the retailer’s new strategy, asking on his personal Instagram account, using the Stories feature: “What would you like to see us do at Tiffany?”
One person asked if it would do more collaborations. “Oh, we will,” Arnault answered, according to WWD.
Overall, LVMH’s jewelry and watches segment showed 35% organic growth in the first quarter of 2021, compared to the previous year. (The prior year’s number includes March 2020, the first month COVID-19 spread worldwide.) When compared to the first quarter of 2019, organic growth rose 1%.
On the earnings call, Guiony said that jewelry did better than watches during the quarter, though “high jewelry” showed weakness.
He admitted that, with vaccine distribution ramping up, he expected the percentage of LVMH’s sales conducted online to decrease, but that that hasn’t happened yet. His company remains committed to brick-and-mortar, however.
“I don’t feel that people are willing to stay at home and shop just at home,” he added. “As we’ve discussed many times, the experience that you get from a screen or from a store is entirely different. We do believe that nothing replaces the store visit.”
He was noncommittal about whether eased pandemic restrictions would mean a greater shift toward “experiential” purchases.
“It’s a bit early,” he said. “It’s welcome anyway. Staying in a situation where restaurants, hotels, cinema, theaters are closed is not a good thing for people and not for the business.”
He also said that the recently passed stimulus bill has probably helped LVMH’s business in the United States.
“The big impact of the stimulus was to avoid the country being frozen, as would have been the case had such stimulus not been distributed,” he said. “It’s a psychological impact of ‘We will be there for you, so you can continue to go shopping.’ I think we benefited from that.”
(Photo courtesy of Tiffany & Co.)
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