Tiffany CEO Says Customers ‘Don’t Care’ Who Owns the Brand

(Bloomberg) -- Tiffany & Co.’s top executive, Alessandro Bogliolo, was asked if there were any parties interested in acquiring the jeweler, in reference to recent reports that the company is engaged in talks to be purchased by French luxury group LVMH. 

“We have a lot of parties at Tiffany,” he joked. It’s the holiday season, after all.

Bogliolo discussed Tiffany’s future, but declined to give details about talks with LVMH during a conversation at Bloomberg’s annual The Year Ahead: Luxury summit on Thursday. He provided a look into several other sources of pressure affecting Tiffany as the 182-year-old jewelry label contends with fickle young shoppers, fluctuating tourist flows, and disruptions in key markets. Even as investors remain fixated on the possibility of a Tiffany takeover, Bogliolo said the brand’s customers are focused elsewhere.

“The financial arrangements?” said Bogliolo. “Customers, they don’t care about your shareholders. Customers care about your product—about your brand, about sustainability, about the beauty of your products. This is what really makes success.”

Tiffany has cited dramatically lower spending by foreign tourists in recent quarters, with Chinese travelers choosing to spend at home, rather than abroad, amid a government push to repatriate purchases. Bogliolo said that essentially every luxury brand’s sales in China are growing. It’s no different for Tiffany, but the company has been slow to divert resources to a market its competition entered a decade ago.

Last year, Bogliolo began ramping up investment in China, starting its own e-commerce website, and the jeweler is making final preparations to throw open the doors to a revamped Shanghai flagship during this winter. With fewer tourists shopping in the U.S., the company has moved some of its priciest items to its shops in China in hopes that customers will buy them there, rather than wait for an overseas vacation to make a big purchase.

Hong Kong, however, has posed a persistent problem for Tiffany, as ongoing protests continue to disrupt operations. “It used to be a shopping paradise for many tourists from mainland China,” said Bogliolo. “For obvious reasons, they’re not going there any more.”

As for those shoppers back in the U.S.—the ones who don’t care that Tiffany may get acquired by a European conglomerate—Bogliolo said their habits are changing; his jeweler must figure out how to win over younger shoppers who regard brands differently than  previous generations did at their age. These days, shoppers ask more questions, and Tiffany needs to make sure it has answers.

“When I was young, it was  important to buy a famous brand and a beautiful product,” he said. “Millennials have much more questions. They want to know why Tiffany is famous, what do they stand for, and why should I go to them.”

The Year Ahead: Luxury conference was hosted by the lifestyle group Bloomberg Pursuits, at the company’s headquarters in Manhattan. Other speakers included architect Robert A.M. Stern, pastry chef Christina Tosi, and Rent the Runway’s Jenn Hyman, as well as executives from Porsche, Virtuoso, and Marriott.

To contact the editor responsible for this story: James Gaddy at jgaddy@bloomberg.net

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