Luxury jewelry and specialty retailer Tiffany & Co. announced on Sunday that its Chief Executive Officer Frederic Cumenal had stepped down after the companyâ€™s disappointing financial performance, which includes lower than anticipated holiday sales.
Board chairman Michael Kowalski will become the top executive on an interim basis as Cumenalâ€™s resignation will come into effect at once. Kowalski will also retain his chairman responsibilities, the company said.
Interestingly, Cumenal had succeeded Kowalski as the companyâ€™s CEO in 2014. Kowalski had held the top spot in the company since 1999 before being replaced by Cumenal.
The new CEO issued a formal statement saying that the board is â€œcommitted to our current core business strategies, but has been disappointed by recent financial results.â€ Kowalski thanked Cumenal for boosting the companyâ€™s management team and putting Tiffany in an advantageous long-term position. He also underlined the need to accelerate the execution of companyâ€™s plans to enhance competitiveness.
â€œThe board believes that accelerating execution of those strategies is necessary to compete more effectively in todayâ€™s global luxury market and improve performance,â€ added Kowalski. â€œAs 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.â€
57-year-old Cumenal issued a personal statement thanking the companyâ€™s management team and employees. He also expressed â€œgreat confidence in Tiffanyâ€™s brand, strategic direction, and people.â€ The French businessman had held a series of senior leadership posts at LVMH Group, where he had also been the CEO of MoÃ«t & Chandon, before joining Tiffany in 2011 to oversee the luxury jewelerâ€™s sales and distribution. He was appointed president and joined the board a couple of years later.
The New York-based company, which manufactures fine jewelry and has retail stores all over the world, has faced tough times of late. As a stronger dollar makes shopping trips dearer, the 180-year-old company has struggled to overcome its declining same-store sales for several quarters.
Tiffany had reported a 4% decline in its same-store sales during the holiday period in North America. The company has blamed the disappointing results on the â€œpost-election traffic disruptionsâ€ near Tiffanyâ€™s New York City headquarters, which is located right next to President Donald Trumpâ€™s Manhattan home and office headquarters.
Despite recording an increase of about 7% in the Asia-Pacific and 16% in Japan in its holiday season sales, the declining profits in the Americas and Europe have more than offset the companyâ€™s performance in the Far East. The signs do not look very positive for the company, which has seen its profits stagnate at around $4 billion since 2014.
However, Tiffany had some good news in December last year as its shares scaled a recent high of $85.06 on December 8. The stock seemed well-poised at $80.47 in Friday trading.
Meanwhile, amid plummeting sales and the resignation of its CEO, the company aired its first Super Bowl advertisement on Sunday. The ad starred Lady Gaga.