Tiffany CEO Frederic Cumenal stepped down Sunday, amid the famed luxury jewelry chain’s continued struggles with disappointing financial results, including lower than anticipated holiday sales.
The company’s announcement of the management shakeup said board Chairman Michael Kowalski, whom Cumenal succeeded in 2014, will return to the top executive post on an interim basis while Tiffany (TIF) searches for a permanent replacement. Kowalski will also keep the chairman responsibilities, the company said.
“The board is committed to our current core business strategies, but has been disappointed by recent financial results,” Kowalski said in a formal statement in which he also thanked Cumenal for enhancing the company’s management team and positioning Tiffany for the long term.
“The board believes that accelerating execution of those strategies is necessary to compete more effectively in today’s global luxury market and improve performance,” added Kowalski. “As such, we remain focused on enhancing the customer experience, increasing the rate of new product introductions and innovation, maximizing marketing effectiveness, optimizing the store network, and improving our business operations and processes.”
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.
Global net sales rose 1% from the same period of 2015, and comparable sales slipped 1% when viewed on a constant-exchange-rate basis, Tiffany said. Although the company said holiday season sales grew 7% in Asia-Pacific and 16% in Japan, the increases were offset by continuing declines in the Americas and Europe, where some foreign tourists and visitors were deterred by the strong U.S. dollar.
Despite the financial challenges, Tiffany shares touched a recent high of $ 85.06 on Dec. 8, rebounding from the recent low of $ 57.48 on June 16. The stock closed nearly 3% higher at $ 80.47 in Friday trading.
Tiffany also announced in January that Reed Krakoff, the company’s creative collaborator during 2016, would become its chief artistic officer as of Feb. 1. The surprise announcement made Krakoff the design director for Tiffany brand jewelry, as well as gave him the company’s lead role in artistic and design vision regarding stores, e-commerce, marketing, and advertising.
Follow USA TODAY reporter Kevin McCoy on Twitter: @kmccoynyc
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