One of the industry’s great brands tries to reach out to millennials
Sunday was a big day for Tiffany & Co. It debuted its first-ever Super Bowl ad, starring Lady Gaga, the game’s halftime performer.
It was also the day Tiffany CEO Frederic Cumenal announced he was resigning. The announcement was oddly timed—you don’t usually see big corporate announcements on a weekend—and it stepped on what could have been a big publicity coup.
Cumenal served less than two years in the top job, following two years as president. An LVMH veteran, he was brought in to turn Tiffany into a “global luxury brand”; along with Francesca Amfitheatrof, the design director behind the Tiffany T line, he was considered a modernizing influence at the retailer. “It’s like a renaissance within Tiffany,” said Amfitheatrof. But Amiftheatrof left the company last month, and was replaced by former Ralph Lauren exec Reed Krakoff.
Usually, when change agents depart, one assumes it’s because they moved too fast, like Ron Johnson at J.C. Penney. But in this case, the board didn’t feel Cumenal moved too fast; they felt he didn’t move fast enough.
The board “believes that accelerating execution of [core business] strategies is necessary to compete more effectively in today’s global luxury market and improve performance,” said chairman—and now interim CEO—Michael Kowalski in a statement, citing the need to “increase the rate of new product introductions and innovation.”
There weren’t many big declines during Cumenal’s tenure, more a steady stream of mediocre results, mostly stemming from problems overseas (and, in the case of its flagship’s proximity to Trump Tower, a really bad break). But at a time when boards have increasingly itchy trigger fingers, that may have been enough to do him in.
Does Tiffany need to change? Clearly. “Walking into the Tiffany & Co. flagship location on Fifth Avenue in New York City…it’s hard to tell exactly what time period it is, with the wood paneling, brown carpets, and grandfather clocks,” wrote Chavie Lieber this week in Racked. “The interior hasn’t been updated much the last several decades; it doesn’t look all that different than it did in Breakfast at Tiffany’s.”
Of course, for many, that old-world vibe is part of its charm. But today’s consumers live in a world where change is constant and omnipresent, and “old world” no longer has the same attraction it once did. Millennials, with their squeezed budgets and casual tastes, are not natural Tiffany customers. The brand also has less cultural resonance. (Breakfast at Tiffany’s came out 56 years ago.)
“They are trying to update the store environment, to make it more elevated and comfortable at the same time,” Betty Chen, an analyst at Mizuho Securities USA, told WWD. “The challenge is, how do they get someone slightly younger to go inside in the first place?”
The Gaga commercial seems carefully engineered to introduce the retailer to younger buyers, almost like a Tiffany 101. “I grew up in New York City, and I was born there,” the singer says. “And you are born knowing that Tiffany is the best. You know that you will have a truly special moment if you go to the Tiffany store and look into those windows.”
Marketing Tiffany to a fickle, financially pressed new generation is a tough challenge—one that Cumenal may have tried to tackle, but didn’t seem to do well enough. Tiffany remains one of the great brands of the world, with a long, rich history. But these days, that only means so much.