Shares of Tiffany & Co. (TIF) have jumped in early trading after the luxury goods retailer named a former Bulgari executive as its new chief executive officer. The newly appointed CEO will face challenges, including turning around sales and getting its “cool” reputation back.
BOGLIOLO NAMED CHIEF: Tiffany said this morning that it has named Alessandro Bogliolo, who spent 16 years at Bulgari SpA and once served as that company’s COO, as its new CEO. Most recently, Bogliolo was the CEO of Diesel SpA, an apparel and accessories company, and before joining Diesel in 2013, he was COO at Sephora for a year. Bogliolo is expected to take over as Tiffany’s CEO by October 2, the company said, and he will also join the company’s board. “Today’s announcement concludes the Board’s thorough process to identify and recruit an accomplished leader to position the company for sustainable growth in the years ahead,” Michael Kowalski, chairman and interim CEO, commented.
WHAT’S NOTABLE: Earlier this year, Tiffany increased the size of its board of directors to 13 members from 10 with the addition of three new independent directors, including Franceso Trapani, a former CEO of Bulgari. The move came as a result of pressure from activist investor JANA Partners, which together with Trapani owns approximately 5.1% of Tiffany’s outstanding shares, and had pushed Tiffany, amid declining sales and profits, to oust former CEO Frederic Cumenal in February after nearly two years. Trapani was also part of the CEO search committee. Earlier this week, The Wall Street Journal noted that Cumenal failed to turn around sales and update the company’s image as 45% of sales last year came from jewelry categories with an average price of $530 or less. Additionally, the publication noted that jeweler’s poor results are rooted in the perception that Tiffany has “lost its cool,” which will be a challenge for its next CEO.
PEERS IN THE NEWS: Other publicly traded retailers of fine jewelry include Signet Jewelers (SIG), said last month that its COO resigned due to violations of company policy. Signet, the owner of Zale and Kay Jewelers, previously reported quarterly earnings below expectations and announced plans to outsource its credit portfolio.
