Tiffany & Co’s Rebranding
By Emily Pang
Since being acquired by LVMH in January 2021, Tiffany & Co. is turning around to appeal to the younger generation with new marketing. Overall, its rebranding has created a lot of publicity for the brand. It has received mixed reactions from consumers with some saying it’s tarnishing its history, but LVMH announced that Tiffany had "remarkable performance" in the third quarter. As Tiffany is LVMH’s largest acquisition to date, they are using large-scale efforts to justify its purchase whilst creating a new brand story that converges Tiffany heritage and modern trends.
History
Tiffany & Co has been a consistent name in luxury jewelry and is one of the few brands in the industry that offer multiple price points, with certain pieces starting at $225. However, prior to the pandemic and the LVMH takeover, sales were stagnating and their attempts to reach a younger audience were not as successful.
The Acquisition
LVMH first announced its acquisition of Tiffany & Co. for $16.2 billion in late 2019 with the deal expected to close in mid-2020. However, in late 2020, the CEO of LVMH planned to abandon the deal due to regulatory issues and effects of the coronavirus pandemic. This led to a bitter dispute with Tiffany filing a lawsuit and LVMH following with a countersuit. In December 2020, Tiffany shareholders approved a $15.8 billion deal, and LVMH officially took over on January 7, 2021. Alexandre Arnault, prior CEO of Rimowa, was the newly appointed executive vice president. Arnault helped transform Rimowa through extensive collaborations with brands like Dior, Moncler, Fendi, and Supreme, leading to rapid growth for the luggage company.
Fine Jewelry Industry
In the Business of Fashion The State of Fashion 2021: Jewelry Report, co-authored by McKinsey, they estimate steady growth for fine jewelry through 2025. McKinsey research expects the industry to grow at a 3-4% CAGR between 2019 and 2025, expanding from $280 billion in sales to between $340 and $360 billion. Branded fine jewelry specifically is estimated to have an 8-12% CAGR, much larger than the overall fine jewelry market. The Chinese consumer is still of utmost importance, accounting for approximately 45% of branded global fine jewellery sales and having an estimated CAGR of 10-14%. As the world is approaching a new normal with the pandemic, weddings and events are also making a comeback, a positive trend for Tiffany.
Marketing Efforts
Their rebranding began this past summer with a campaign with the text “Not Your Mother’s Tiffany” and featured models in casual clothing. Social media erupted over the unveiling of this campaign with some saying they were alienating old consumers and leaving the brand history behind while it was well-received with some customers who preferred the new look. They have also recruited Beyonce and Jay-Z as new faces for the brand. Their first campaign featured a never-seen-before painting by famous artist Basquiat. One recent advertisement features Beyonce and Jay-Z (and a cameo from Blue Ivy) on a date in a short film paying homage to Breakfast at Tiffany's. They have also recently featured Hailey Bieber and basketball player Kyle Kuzma as new ambassadors in recent ad campaigns. To target the Asian market, Tiffany has Blackpink’s Rose and Yi Yangqianxi (Jackson Yee) of boy band TF Boys as regional and global ambassadors, and their campaigns have been successful both globally and regionally.
Recently, after major speculation, they dropped a jewelry collaboration with streetwear giant Supreme in early November 2021. It sold out immediately and all seven items are currently selling at a price premium on StockX, with the classic supreme box-logo t-shirt in a Tiffany blue color selling at a six-time markup on StockX. Their jewelry also plays into the recent jewelry trend of pearl necklaces for both men and women.
Will This Pay Off?
Analyzing their Instagram, their posts prior to the acquisition featured more product shots while posts since the acquisition have featured more recognizable faces and models. The older product campaigns used to be more cohesive and there are more likes on certain product shots. For their recent posts about the Supreme collaboration, many comments were negative and displeased at the direction the brand was heading. On the other hand, the comments on Supreme’s Instagram about the collaboration were more positive and the collection was more well-received. For the rest of their posts featuring their new ambassadors, most comments were positive. It usually takes consumers some time to adjust to a new brand or a rebranding, but after that initial adjustment period, this seems to be the right direction for Tiffany.
Financially, LVMH’s jewelry and watches division had increased revenue of 125% in the third quarter, and it has only been less than a year since the acquisition. With a positive industry growth and due to Arnault’s success at Rimowa at capturing a new audience, this could be a long term success for both LVMH and Tiffany.
History
Tiffany & Co has been a consistent name in luxury jewelry and is one of the few brands in the industry that offer multiple price points, with certain pieces starting at $225. However, prior to the pandemic and the LVMH takeover, sales were stagnating and their attempts to reach a younger audience were not as successful.
The Acquisition
LVMH first announced its acquisition of Tiffany & Co. for $16.2 billion in late 2019 with the deal expected to close in mid-2020. However, in late 2020, the CEO of LVMH planned to abandon the deal due to regulatory issues and effects of the coronavirus pandemic. This led to a bitter dispute with Tiffany filing a lawsuit and LVMH following with a countersuit. In December 2020, Tiffany shareholders approved a $15.8 billion deal, and LVMH officially took over on January 7, 2021. Alexandre Arnault, prior CEO of Rimowa, was the newly appointed executive vice president. Arnault helped transform Rimowa through extensive collaborations with brands like Dior, Moncler, Fendi, and Supreme, leading to rapid growth for the luggage company.
Fine Jewelry Industry
In the Business of Fashion The State of Fashion 2021: Jewelry Report, co-authored by McKinsey, they estimate steady growth for fine jewelry through 2025. McKinsey research expects the industry to grow at a 3-4% CAGR between 2019 and 2025, expanding from $280 billion in sales to between $340 and $360 billion. Branded fine jewelry specifically is estimated to have an 8-12% CAGR, much larger than the overall fine jewelry market. The Chinese consumer is still of utmost importance, accounting for approximately 45% of branded global fine jewellery sales and having an estimated CAGR of 10-14%. As the world is approaching a new normal with the pandemic, weddings and events are also making a comeback, a positive trend for Tiffany.
Marketing Efforts
Their rebranding began this past summer with a campaign with the text “Not Your Mother’s Tiffany” and featured models in casual clothing. Social media erupted over the unveiling of this campaign with some saying they were alienating old consumers and leaving the brand history behind while it was well-received with some customers who preferred the new look. They have also recruited Beyonce and Jay-Z as new faces for the brand. Their first campaign featured a never-seen-before painting by famous artist Basquiat. One recent advertisement features Beyonce and Jay-Z (and a cameo from Blue Ivy) on a date in a short film paying homage to Breakfast at Tiffany's. They have also recently featured Hailey Bieber and basketball player Kyle Kuzma as new ambassadors in recent ad campaigns. To target the Asian market, Tiffany has Blackpink’s Rose and Yi Yangqianxi (Jackson Yee) of boy band TF Boys as regional and global ambassadors, and their campaigns have been successful both globally and regionally.
Recently, after major speculation, they dropped a jewelry collaboration with streetwear giant Supreme in early November 2021. It sold out immediately and all seven items are currently selling at a price premium on StockX, with the classic supreme box-logo t-shirt in a Tiffany blue color selling at a six-time markup on StockX. Their jewelry also plays into the recent jewelry trend of pearl necklaces for both men and women.
Will This Pay Off?
Analyzing their Instagram, their posts prior to the acquisition featured more product shots while posts since the acquisition have featured more recognizable faces and models. The older product campaigns used to be more cohesive and there are more likes on certain product shots. For their recent posts about the Supreme collaboration, many comments were negative and displeased at the direction the brand was heading. On the other hand, the comments on Supreme’s Instagram about the collaboration were more positive and the collection was more well-received. For the rest of their posts featuring their new ambassadors, most comments were positive. It usually takes consumers some time to adjust to a new brand or a rebranding, but after that initial adjustment period, this seems to be the right direction for Tiffany.
Financially, LVMH’s jewelry and watches division had increased revenue of 125% in the third quarter, and it has only been less than a year since the acquisition. With a positive industry growth and due to Arnault’s success at Rimowa at capturing a new audience, this could be a long term success for both LVMH and Tiffany.