Tiffany boss axed after sales tumble
Tiffany abruptly replaced CEO Frederic Cumenal after disappointing financial results, just before the jewellery chain was set to launch a new campaign with the first Super Bowl advertisement in its history.
Cumenal, who had run the company since April 2015, would be immediately succeeded on an interim basis by chairman and former CEO Michael Kowalski, Tiffany said on Sunday. The shake-up follows the departure of the jeweller’s top designer three weeks ago and weak holiday sales that sent the stock tumbling.
Under Cumenal’s watch, Tiffany was rocked by a slump in tourism spending and headwinds caused by the strong US dollar. Sales declines in Europe and the Americas, marred its holiday season.
Another headache was stepped-up security at its flagship store next to Trump Tower in New York, which hurt traffic.
To cope, Tiffany has been cutting costs, rolling out new products and increasing its marketing. But the company needed to move faster, Kowalski said.
“The board believes that accelerating execution of those strategies is necessary to compete more effectively in today’s global luxury market and improve performance.”
Tiffany shares have declined 6.6% since Cumenal was promoted to CEO, following Kowalski’s retirement from that post in 2015. That compares with gains of 12% for the Standard & Poor’s 500 stock index and a 13% increase for its consumer discretionary benchmark.
Tiffany said last month that design director Francesca Amfitheatrof was leaving the company. It hired Reed Krakoff for the new position of chief artistic officer.
In its latest effort to expand sales and relevance with younger shoppers, Tiffany commissioned pop singer Lady Gaga to become the face of its fashion-jewellery collection. She appeared in a Super Bowl advert on Sunday and performed during the game’s halftime show.
The timing makes Cumenal’s departure especially surprising, but Tiffany said it was maintaining the financial outlook it gave in January. Earnings are expected to decline by no more than a mid-single-digit percentage in the current fiscal year and global net sales will fall by a lowsingle-digit percentage.
In January, the jeweller said it did not expect any “significant improvement” to the economic challenges this year but would focus on ratcheting up its customer experience, product assortment, marketing and supply chain.
Tiffany also brought in a new chief financial officer, Mark Erceg, in October, replacing Ralph Nicoletti, who resigned to take up the same post at Newell Brands.