Tiffany Posts Disappointing Results, CEO Steps Down
CEO Frederic Cumenal at Tiffany announced on Sunday he was stepping down amidst the continued struggles by the luxury jewelry brands with disappointing quarterly results including holiday sales that were lower than had been expected.
The announcement by the company of its shakeup in management said that Michael Kowalski its chairman of the board who was succeeded by Cumenal in 2014 would return to the CEO post for an interim basis during the time Tiffany searches for Cumenal’s permanent replacement.
Kowalski is also keeping the responsibilities as chairman said the Tiffany prepared statement.
Tiffany reaffirmed its 2016 fiscal year guidance that it issued last month, when officials at the company said they expected per diluted share earnings to drop by up to mid single digit percentages.
Cumenal, through his own prepared statement, thanked Tiffany’s executive team and its employees, while voicing strong confidence in the brand, its strategic direction and its people.
Cumenal began his career in 2011 with Tiffany after he held a number of posts in senior leadership with LVMH Group, which culminated with him being the CEO and president at Moet & Chandon.
Tiffany, which was founded in 1837 in New York, manufacturers gifts and fine jewelry and has retail stores it operates worldwide, along with online direct sales.
However, Tiffany, known for its gift boxes that are a distinctive light blue has faced a tough market the past few years.
In January, Tiffany announced its holiday sales for 2016 were less than it anticipated due to traffic disruptions following the election close to its headquarters in New York City, which abuts the Trump Tower the office headquarters of President Trump.
Net sales worldwide rose by 1% from the same time during 2015 and its comparable sales dropped by 1% when looked at on the basis of constant exchange rates.
Although Tiffany said that sales during the holiday season were up 7% in its Asia-Pacific region and 16% for Japan, the increases were offset due to continued declines in Europe and the Americas, where some foreign visitors and tourists were reluctant to purchase because of the strong dollar.
Despite the challenges financially, Tiffany has seen its shares reach $85.06 rebounding from a low recently of $57.47 during mid June.
Tiffany announced as well during January that the creative collaborator of the company, Reed Krakoff would become its new chief artistic officer on February 1.
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