Tiffany CEO in shock departure, board wants faster solutions to its problems
Tiffany may have wanted to grab the headlines because of its first ever Super Bowl ad on Sunday but it was the luxury jeweller’s announcement of the shock departure of its CEO Frédéric Cuménal that gripped the industry instead.
His 22-month tenure ended due to weak sales and it was clearly a decision taken quickly by the board as the company jettisoned its senior exec with no replacement lined up.
Cuménal, who is French, joined the company in 2011 as head of global sales and distribution and later moved to also run the design, merchandising and marketing operations at the firm, before taking the top job in April 2015.
But chairman Michael Kowalski is now stepping in as interim chief executive. He had been Tiffany’s long-serving CEO before Cuménal and said at the weekend that the board “has been disappointed by recent financial results.”
Three weeks ago the company’s lead designer, Francesca Amfitheatrof, also left abruptly to be replaced by Reed Krakoff, and the firm announced weak holiday season sales, sending its share price down.
So with Kowalski having said the board is “committed to our current core business strategies” what exactly will change now?
Well, it is clear that the board has been unhappy with changes designed to address current market conditions not happening fast enough. However, it has to be said that Cuménal has had to battle some unprecedented headwinds.
They have included slumping tourism globally, a wider downturn in the luxury sector and the impact of increased security at Trump Tower, next door to Tiffany’s New York City flagship.
The company has responded with cost cuts, new product launches and extra marketing (as the Super Bowl ad shows). But Kowalski wants to see it being much more nimble.
“The board believes that accelerating execution of those strategies is necessary to compete more effectively in today’s global luxury market and improve performance,” he said.
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