Is LVMH’s Big Bet on Tiffany Paying Off?
This week, everyone will be talking about LVMH’s third-quarter results, Alexander McQueen’s London show and J.C. Penney’s new beauty strategy.
- LVMH reports third-quarter results on Oct. 12
- In September, the company unveiled its first major campaign for Tiffany since acquiring the jeweller in January in a $16 billion deal that was the biggest in the luxury sector’s history
- LVMH wants to position Tiffany more firmly in the luxury space, while both dusting off the jeweller’s heritage story and giving its brand greater contemporary cultural relevance
Tiffany’s transformation under LVMH is underway. The company installed a new executive team, including Alexandre Arnault and Michael Burke, soon after it acquired the dusty American jeweller in January, and has methodically applied its playbook for rebooting heritage brands: emphasise high-end product and shine up the brand’s backstory, while simultaneously tapping the current zeitgeist to create a juggernaut that is both timeless and of the moment, both classy and cool.
At Tiffany, this effort kicked into high gear in August with the unveiling of a major ad campaign featuring Beyonce and Jay-Z. It was met with mixed reviews online. But what matters most is its effectiveness in ultimately driving customers into stores. LVMH has indicated it’s already having success on that front, saying in its second-quarter results that the brand has “performed extremely well since its acquisition.”
The Bottom Line: LVMH is relying on Tiffany to compete head-on with hard-luxury rival Richemont. In its critical fashion and leather goods businesses, LVMH is far more secure, as cash cows Louis Vuitton and Dior roar out of the pandemic.