On Monday morning the LVMH Group has announced that it acquired Tiffany & Co. for $16.2 billion ($135 USD per share).
The last few years have been tough for the iconic jewellery house. The company has been experiencing slow sales caused by a drop in tourist spending and challenging economic circumstances.
In recent years Tiffany & Co tried targeting younger consumers with their advertising campaigns. One,“Believe in Dreams,” starred Elle Fanning as the face in a song with ASAP Rocky. The other campaign, ”Thereʼs Only One,” featured David Hallberg, the former Bolshoi Ballet dancer, alongside actresses Zoe Kravitz and Elle Fanning.
Despite all the efforts, the younger generation sees the brand as “outdated”. These consumers give their preference to emerging brands and niche designers that carry a strong message. Some of whom are DRU by Thea Miller, Soko, and Laura Lombardi. In addition to the fun and quirky designs, they also happen to practice sustainability. These brands use raw or recycled materials and work with artisan entrepreneurs – something that seems to be missing at Tiffany & Co.
Hong Kong backlash.
The company has recently received serious backlash due to its advertising campaign that launched in October. Chinese consumers accused Tiffany & Co of supporting protesters in Hong Kong. It all started when the brand posted an ad of Chinese model, Sun Feifei, covering her right eye. Earlier this year, during the protests, a volunteer medic in Tsim Sha Tsui was severely injured in the eye. At the time, thousands of people swarmed Hong Kongʼs International Airport wearing patches or covering the right eye, chanting “An eye for an eye!”.
Tiffany quickly released a statement, “This campaign image, which was photographed in May 2019, was in no way intended to be a political statement of any kind.”
Largest acquisition by LVMH.
Tiffany & Co is by far the largest acquisition by LVMH. The French giant already owns Bulgari, TAG Heuer, Zenith, Fred, Chaumet, and Hublot. Jewellery and Watches is currently the group’s smallest division and counts for only 9% of its sales. LVMH could definitely provide Tiffany & Co with the push it needs. The deal is expected to be finalised in the middle of 2020.