LVMH says that all 300-plus Tiffany stores will have to be remodeled, and it’s planning to make over most of them within the next four years.
“We have to redo basically the whole fleet,” said chief financial officer Jean-Jacques Guiony on a conference call following the release of LVMH’s latest results, according to a SeekingAlpha transcript. “Not one single store, apart from the few ones that we have already renovated, are up to our standards. And it will take time and a lot of money to redo them.
“We won’t do them all in the format of [Tiffany’s remodeled New York City flagship]. We’ll be adapting to the various markets. But at the end of the day, what we want is within three, four years max to have redone most of the network of stores at Tiffany. And that’s a significant capital cost that we have to bear. But frankly what we want to do with the brand cannot be done in the existing network.”
Guiony said that the new Tiffany flagship, which it’s dubbed the Landmark, “is doing very well, if not better than our plans.”
The New York store symbolizes “what we want the brand to become,” he said. “The benefit of the Landmark is not only the business we do there, but the impact it has on the global image of the brand.”
LVMH bought Tiffany in 2021 for $16 billion. Its decision to remodel all its stores contradicts LVMH’s initial post-takeover assertions that it wouldn’t change anything about the way Tiffany did business. While those assurances are not uncommon following a corporate acquisition, LVMH was unusually emphatic about them.
“For a long time, it was not obvious to us what we could do better [at Tiffany],” Guiony said in 2019. “The answer is that we would not do much better or much differently, but we will enable [its] strategy.”
Some veterans have criticized the LVMH makeovers. Tiffany “used to be a very warm, open place,” one former executive told JCK last year. “It’s become more exclusive. When you see the new store design in Boston, you wouldn’t think people would want to spend $200 in there.”
However, on X (formerly Twitter), analyst Paul Zimnisky said the move makes sense. “The acquisition has already been quite financially successful for them,” he wrote. “They are just reinvesting in the business, which is what more jewelers should do.”
Whether this ambitious strategy will pay off is another matter. Pauline Brown, former chair of LVMH North America and a professor at Columbia Business School, told the Financial Times in April she had never seen a jewelry company pour money into a brand “on the scale that LVMH needs it to work to see a return on its investment”
LVMH does not provide detail on the performance of individual retailers, but with its latest financial results, it said Tiffany showed “impressive growth in high jewelry, and strong creative momentum.”
Top: Tiffany’s remodeled Ginza store in Tokyo (photo courtesy of LVMH)
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