New York - Tiffany
& Co abruptly replaced CEO Frederic Cumenal after disappointing financial
results, just before the jewellery chain is set to launch a new campaign with
the first Super Bowl ad in its history.
Cumenal,
57, who had run the company since April 2015, will be immediately
succeeded on an interim basis by chairman and former CEO Michael Kowalski,
Tiffany said on Sunday afternoon. The shake-up follows the departure of the jeweller’s
top designer three weeks ago and weak holiday sales that sent the stock
tumbling.
Under Cumenal’s
watch, Tiffany was rocked by a slump in tourism spending and headwinds caused
by the strong US dollar. Sales declines in Europe and the Americas marred its
holiday season. Another headache: Stepped-up security at its flagship
store next to Trump Tower in New York hurt traffic.
To cope, Tiffany
has been cutting costs, rolling out new products and increasing its marketing.
But the company needs to move faster, Kowalski said in a statement.
“The board
believes that accelerating execution of those strategies is necessary to
compete more effectively in today’s global luxury market and improve
performance,” said Kowalski, who is 64.
Tiffany shares
have declined 6.6 percent since Cumenal was promoted to CEO, following
Kowalski’s retirement from that post in 2015. That compares with gains of 12
percent for the Standard & Poor’s 500 stock index and 13 percent for the
S&P’s consumer discretionary benchmark.
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Tiffany said
last month that design director Francesca Amfitheatrof was leaving the company.
It hired Reed Krakoff to the new position of chief artistic officer, tasking
him with overseeing jewelry and luxury accessories.
In its latest
effort to expand sales and relevance with younger shoppers, Tiffany
commissioned pop singer Lady Gaga to become the face of its fashion-jewellery
collection. She’ll appear in a Super Bowl ad Sunday, as well as perform during
the game’s halftime show.
The timing makes
Cumenal’s departure especially surprising, but Tiffany said it was maintaining
the financial outlook it gave in January. Earnings are expected to decline by
no more than a mid-single-digit percentage in the current fiscal year, and
global net sales will fall by a low-single-digit percentage.
The jeweller
said in January that it didn’t expect any “significant improvement” to the
economic challenges this year but will focus on ratcheting up its customer
experience, product assortment, marketing and supply chain.
Tiffany also
recently brought on a new chief financial officer, Mark Erceg. He joined in
October, replacing Ralph Nicoletti, who resigned to take up the same post at Newell
Brands.