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Why People Are Talking About Tiffany & Co.’s New Directors

The appointments will likely fuel talk of a Tiffany take-over

Usually, the makeup of a company’s board doesn’t get much attention. But Tiffany’s addition of three new directors is definitely intruguing.

All three are veteran CEOs with impressive pedigrees. Francesco Trapani is the former CEO of Bulgari and once headed LVMH’s watches and jewelry division. Roger Farah is the co-CEO of Tory Burch and former president of Ralph Lauren, a man whom Fortune just dubbed a “retail rockstar.” James Lillie once headed consumer products giant Jarden.

The three joined the board as the result of a deal Tiffany made with activist investor Jana Partners, whose 5.1 percent stake in Tiffany (with Trapani) has just been made public. While it’s not clear whether Jana’s stake drove the departure of CEO Frederic Cumenal three weeks ago, it would put that abrupt switch in a new light, one that makes a lot more sense.

Over the years, there has been periodic talk that Tiffany is up for sale, and these latest moves will likely fuel more speculations. Both Lillie and Trapani headed companies that ended up getting acquired; Trapani once said that “more and more, I think that big groups will be the protagonists in the luxury business” and that “life will be more difficult” for independent jewelers.

Tiffany has not had a great experience with take-overs, having suffered during an ill-fated acquisition by Avon a few decades ago. Last year, Cumenal told The Business of Fashion: “We will have no benefit of being with someone else.… [W]e are furiously and ferociously independent. We have access to all resources that we need.” He added, “The stock market is not good. Not good for anyone, by the way.”

Now that the board has unceremoniously yanked Cumenal from the big chair, those words seem almost prophetic. Many would agree with his contention that Tiffany will see little benefit in becoming part of a big luxury conglomerate. But a brand’s long-term health rarely matters to activist investors, and that is who seems to be in charge now.