For nearly two years under CEO Frederic Cumenal, one of the premier jewelry brands in the world, Tiffany & Co., struggled. They failed to release many new products, couldn’t attract customers and watched sales continue to slide. After 22 months of this, the board had enough. Cumenal was asked to resign this past February, and the company struggled to find a new leader for months.
Now, five months after Cumenal was sent packing, Alessandro Bogliolo has been named CEO. Bogliolo is an industry veteran, former 16-year employee at Bulgari with retail leadership experience as CEO of designer jeans brand, Diesel. It’s not clear if Bogliolo has the background to pull Tiffany & Co. out of its slump, but company leadership is very optimistic.
As are some industry analysts, who have called Bogliolo a “strong fit” who would bring “positive changes” and “product innovation.”
The jeweler needs optimism now. They also need fresh ideas. For years, Tiffany & Co. was synonymous with high-end custom jewelry. But, in recent years, customers have been looking for more inexpensive jewelry. When they couldn’t find it at Tiffany, they went elsewhere. For years, for undisclosed reasons, Tiffany & Co. failed to adapt to the changing market. They could see sales were slumping but did little to address evolving consumer tastes.
Silver jewelry retailing for less than $500 makes up about 25 percent of Tiffany sales, but that profitable segment has been, apparently, ignored. Bereft of innovation, new products and anything to capture or grow that segment, popular with a much wider portion of the consumer market.
How bad is it, really? Well, according to reports in the AP and WSJ, many of the currently marketed Tiffany designs haven’t been updated in decades. They don’t appeal to new shoppers, and they seem stale to people who have seen them for years.
Another struggle? Online sales. Every retailer needs to adapt to the reality of the growing online market, but Tiffany has been slow to move on this. They have a presence but have only been able to account for about 6 percent of their sales online.
In another move that turned out to be a false step, Tiffany tried to renovate its tired watch line, introducing the first new collection in some time two years ago. A nice idea, but small potatoes, comparatively, as that segment only accounts for about one percent of sales. Why was Tiffany focusing its efforts on such small areas while ignoring much larger profit streams? Tough to say, but at least Bogliolo has a clear idea where he might start turning things around.
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