Tiffany & Co. abruptly replaced Chief Executive Officer Frederic Cumenal after disappointing financial results, just before the jewelry chain launched a new campaign with the first Super Bowl ad in its history.
Stephanie Hoi-Nga Wong of Bloomberg News had the story:
Cumenal, 57, who had run the company since April 2015, will be immediately succeeded on an interim basis by chairman and former CEO Michael Kowalski, Tiffany said on Sunday afternoon. The shake-up follows the departure of the jeweler’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 U.S. dollar. Sales declines in Europe and the Americas marred its holiday season. Another headache: Stepped-up security at its flagship store next to Trump Tower in New York hurt traffic.
To cope, Tiffany has been cutting costs, rolling out new products and increasing its marketing. But the company needs to move faster, Kowalski said in a statement.
“The board believes that accelerating execution of those strategies is necessary to compete more effectively in today’s global luxury market and improve performance,” said Kowalski, who is 64.
Kevin McCoy of USA Today reported that the retailer’s sales have lagged:
Tiffany also reaffirmed its fiscal year 2016 guidance issued in January, when the company said it expects earnings per diluted share to decline by no more than a mid-single-digit percentage on a generally accepted accounting principles basis.
Cumenal, in his own statement, thanked the company’s management team and employees and voiced “great confidence in Tiffany’s brand, strategic direction, and people.” He joined Tiffany in 2011 after holding a series of senior leadership posts at LVMH Group, culminating as president and CEO of Moët & Chandon.
Founded in New York in 1837, Tiffany manufactures fine jewelry and gifts and operates retail stores worldwide, along with direct selling online. However, the company, known for its distinctive light blue gift boxes, has faced a difficult market in recent years.
Last month, the company announced that 2016 holiday sales were lower than anticipated, due in part to “post-election traffic disruptions” near Tiffany’s New York City headquarters — which abuts Trump Tower, President Trump’s Manhattan home and office headquarters.
Phil Wahba of Fortune reported that Cumenal lasted less than two years:
Tiffany & Co. stunned the jewelry world on Sunday by announcing that its CEO Frédéric Cuménal was out of a job immediately after only 22 months, blaming weak sales results, with no successor lined up.
Cuménal — a Frenchman who joined Tiffany in 2011 to oversee worldwide sales and distribution and later also took on design, merchandising and marketing functions before becoming CEO in April 2015 — will be replaced on an interim basis by the New York jeweler’s longtime former CEO and current chairman Michael Kowalski while it looks for a new CEO.
“The board is committed to our current core business strategies, but has been disappointed by recent financial results,” Kowalski said in a statement. The board also took fault with the slow pace of implementation of strategies to address longtime vulnerable spots for Tiffany. Those include its silver jewelry priced for less than $500, which makes up about a quarter of its sales, and its fashion jewelry. On Cuménal’s watch, Tiffany’s shares fell 9%.
Tiffany recently reported disappointing holiday season results, partly blaming disruption at its Manhattan flagship, which is right next door to Trump Tower, where President Trump lived before taking office and where his wife and son still live. But those results came on the heels of several weak quarters during Cuménal’s tenure.
