Editors

What Tiffany’s Acquisition Means for the Jewelry Industry

EditorsDec 09, 2019

What Tiffany’s Acquisition Means for the Jewelry Industry

Looking at what makes Tiffany & Co. worth $16 billion says a lot about what consumers value, Associate Editor Lenore Fedow writes in her analysis of the deal.

20191209_Tiffany_rings.jpg
A “Tiffany Setting V” band ring , a “Tiffany True” engagement ring, a “Tiffany Soleste” band ring, and a “Tiffany T True” narrow ring. Luxury conglomerate LVMH is set to acquire the well-known jeweler in a deal valued at $16.5 billion. (Photo credit: Tiffany & Co.)

Life as the resident retail reporter at National Jeweler can be a bit of a bummer.

It’s an unofficial and self-bestowed title, but if stores are closing or companies are going bankrupt, I tend to cover it.

Truly, I like my beat. I do my best work when I’m elbow-deep in quarterly reports and court documents.

But when the rumors of LVMH’s acquisition of Tiffany & Co. began to fly, I felt a bit uneasy.

As a lifelong New Yorker, I have a soft spot for Tiffany. My everyday jewelry, the pieces I consider a part of me, all came in a little blue box.

I see the company as an American icon and quintessentially New York, and I wasn’t sure how to feel about a French luxury conglomerate buying it.

As a reporter covering retail, I mulled over what the deal would mean for Tiffany and, more broadly, for the jewelry industry at large.

So I picked the brains of experts and analysts, and I’ve come to you with my findings.

Here’s what makes Tiffany so valuable and why those factors matter to the overall industry.

Tiffany brings a strong brand to the table.

Amid reports of a potential acquisition, Tiffany confirmed in October it had received an unsolicited bid from LVMH for $120 per share, valuing the company at $14.5 billion.

After talks with LVMH, Tiffany reportedly asked the company to up the bid to $130, believing the company was worth more.

And Tiffany was right. The final deal was for $135 per share, or $16.2 billion, one of the largest transactions in LVMH’s history.

Tiffany was able to command big bucks, in part, because of the strength of its brand.

Flavio Cereda, an equity analyst at Jeffries, stated in a note written prior to the deal that Tiffany’s “brand equity and the strength of the image of its iconic 1837 Blue Box are more valuable than the current financials suggest.”

“LVMH, with all its brands, does not have a strong, solid diamond jewelry brand like Tiffany or that caters to Tiffany’s clientele,” industry analyst Edahn Golan wrote in an email to National Jeweler.

LVMH’s watch and jewelry portfolio consists of Chaumet, Bulgari, Fred, Hublot, TAG Heuer, and Zenith.

“Of the six companies in LVMH’s watch & jewelry group, only Chaumet is a diamond jewelry company, which means that the group has a lot of room to grow,” he said.

From its trademark Tiffany Blue color to the white ribbon around its

boxes, Tiffany’s strong brand presence is a valuable asset.

The rise of brands was a major takeaway from De Beers’ 2019 Diamond Insight Report, which noted the popularity of branded jewelry, particularly in the diamond engagement ring space.

Branded jewelry represents two-fifths of sales of commitment jewelry in the United States, said De Beers.

The report also highlighted the resonance of brands with same-sex couples and millennials.

Tiffany’s vertical integration is valuable.

“Tiffany checked all the boxes,” industry analyst Paul Zimnisky said in an interview with National Jeweler Friday, noting that while the standalone brand was the most important aspect of the deal, its vertical integration is certainly the second.

Luca Soltani, senior research analyst for luxury goods at research firm Bernstein, echoed Zimnisky’s sentiment on vertical integration.

“It is clearly an advantage—especially when we look at the bridal products,” Soltani said in an email to National Jeweler.

Zimnisky wasn’t surprised by the acquisition, as rumors had been swirling in the space for a while, but said he was surprised LVMH didn’t make a bid last year during the stock market sell-off.

Then again, “not a lot of acquisitions could move the needle for them,” he said, noting the size and wealth of the luxury conglomerate.

LVMH has the money to spend, but what it lacks are the sourcing and manufacturing connections that Tiffany maintains.

LVMH Chief Financial Officer Jean-Jacques Guiony said as much in a conference call with analysts following the deal, highlighting Tiffany’s “very high level of vertical integration, compared with our brands.”

“[Tiffany] realized early on that vertical integration will give it better access to the goods it needs, and at better prices too,” said analyst Golan.

The company’s vertical integration efforts began 20 years ago, Tiffany CEO Alessandro Bogliolo said in an interview with Bloomberg.

Tiffany established Laurelton Diamonds, a wholly owned manufacturing subsidiary, in 2002.

It’s a De Beers sightholder and has inked long-term rough supply agreements with Alrosa and Dominion Diamond.

Bogliolo noted that 80 to 90 percent of its polished diamonds above 0.18 carats come from its workshops.

Tiffany also holds a stake in a diamond mine in South Africa owned by Canadian mining company Diamcor, a company spokesperson confirmed.

At a time when provenance and supply chain transparency are becoming increasingly important to consumers, Tiffany is ahead of the curve.

The jeweler began telling consumers the origin of its diamonds in January through its “Diamond Source Initiative.”

In that same Bloomberg interview, Bogliolo estimated the move toward sustainability cost Tiffany tens of millions of dollars over the years but added that it differentiates Tiffany from other jewelry companies.

“The reason why we are so selective with our sourcing is to avoid either mines that are not compliant with safety requirements, environmental protection, [and] human rights respect,” he said.

Tiffany, for example, does not source from Zimbabwe or the Congo due to internal issues in the countries, even if the diamonds meet Kimberley Process standards, he said.

“Tiffany is a very big player in all sorts of diamonds, and it’s something where the sourcing is not easy to do, and we expect to benefit from that,” LVMH’s Guiroy said on the call.

Tiffany boarded the sustainability train early.

With Tiffany’s vertical integration comes its ability to have a greater say in the means of production, a valuable asset at a time when climate change and environmental issues are weighing heavy on the minds of many consumers.

The younger, affluent generation are socially and environmentally conscious and hold luxury brands to high standards, particularly sustainable and ethical production processes, said Deloitte in its Global Powers of Luxury Goods 2019 survey.

“This implies an important lesson for luxury brands that want to retain these customers: they need to evolve towards new models of ethical and sustainable luxury.”

In addition to its diamond sourcing standards, the jeweler has been mindful of metals.

A decade ago, Tiffany was the first jewelry company to speak out against the development of the never-built Pebble Mine in Alaska’s Bristol Bay, holding a screening of a documentary about the importance of the watershed, “Red Gold,” in New York.

It was one of the first jewelers to use gold sourced from the “Salmon Gold” initiative, which aims to mine gold in a way that’s mindful of the habits of salmon and other fish.

The Deloitte study highlights Tiffany’s responsible sourcing as well as its social and environmental work, particularly its philanthropic foundations focusing on reef conservation and awareness for responsible mining.

Tiffany created its “Save the Wild” collection in 2017, donating all profits, totaling more than $5 million, to the Wildlife Conservation Network.

And the company’s over-the-top holiday catalog offers an 11-day safari in Kenya and a set of animal-shaped diamond brooches, with a portion of the proceeds going to the animal conservation charity.

Tiffany is doing well in a key market—China.

Luxury brands across the board are grappling with U.S.-China trade tensions. Simultaneously, political unrest in Hong Kong is weighing heavy on balance sheets.

Tiffany, however, is still seeing double-digit growth in mainland China and highlighted higher spending by locals in its third-quarter results.

The jeweler currently has 35 stores in mainland China and 10 in Hong Kong.

LVMH’s third-quarter results also reported strong growth in Asia, and it has a strong enough foothold in the country to propel Tiffany even further in the growing market.

Jefferies analyst Cereda said LVMH may leverage the strength of Tiffany’s brand to target the Asian millennial market.

“I could definitely see that happening,” said Reginald Brack, executive director at NPD and an industry analyst on watches and luxury, in an interview with National Jeweler Friday.

“I think that Asian millennial luxury consumer is what most luxury brands now are trying to target. Tiffany is well-poised and positioned to capitalize on that with their immense brand recognition.”

The future of Tiffany may mean fewer stores.

Cereda noted Tiffany’s move into China may mean a “rethinking of the current product mix and its U.S. footprint.”

Bernstein analyst Soltani said Tiffany’s position in the United States is a strength, but that perhaps, “LVMH would want to upgrade the Tiffany flagship stores, and streamline the rest of the retail network.”

Tiffany’s flagship New York City store will undergo renovations after the holiday, and the retailer will move the store into a temporary, nearby space until it’s completed.

He said in secondary locations, Tiffany could “use a lighter (and smaller) retail format.”

NPD analyst Brack had the opportunity to visit a new Tiffany concept store in Tokyo, which he described as an “industrial loft space” that included a permanent DJ booth.

He said the items were more accessible, out there in the open to touch, and the space had a personalization bar.

An openness to change in an ever-changing retail environment is critical and when you have a strong brand, you can afford to experiment a little.

This deal speaks to the industry at large.

What I’ve taken away from my discussion with experts and analysts is this: Looking at what makes Tiffany worth $16 billion says a lot about what consumers value.

To compare Tiffany with independent jewelers is incongruous in some respects but, overall, understanding what matters to the customer is vital to any business.

Tiffany has: a strong brand, control of aspects of production, a focus on responsible sourcing and sustainability, and an eye for the retail experience.

Whether upping your social media game or talking more with your customers about the journey their jewelry has taken, you can take away something actionable from this historic deal.
Lenore Fedowis the senior editor, news at National Jeweler, covering the retail beat and the business side of jewelry.

The Latest

Image #1_Resized.png
Supplier BulletinAug 28, 2025
Clientbook Is Helping Jewelers Turn Clienteling Challenges into Wins with Hands-On Training and Coaching

Sponsored by Clientbook

GIA’s new report for lab-grown diamonds
GradingAug 28, 2025
GIA’s New ‘Quality Assessment’ for Lab-Grown Diamonds Is Coming

It will classify lab-grown stones into one of two categories, “premium” or “standard,” in lieu of giving specific color and clarity grades.

Botswana President Duma Boko
SourcingAug 28, 2025
Botswana Declares Public Health Emergency Amid Diamond Sales Slump

President Duma Boko addressed the country’s medical supply chain crisis in a recent televised address.

japac-btyb.png
Brought to you by
Rallying Call for the Jewelry Industry on Tariffs and Other Key Issues

Jewelers of America is leading the charge to protect the industry amidst rising economic threats.

Afton Robertson-Kanne Borsheims
MajorsAug 28, 2025
Borsheims Names New Jewelry Buyer

Former Free People buyer Afton Robertson-Kanne recently joined the retailer.

Weekly QuizAug 29, 2025
This Week’s Quiz
Test your jewelry news knowledge by answering these questions.
Take the Quiz
Sissy’s Log Cabin Back to School and Bling
IndependentsAug 28, 2025
Sissy’s Log Cabin Donates School Supplies to Memphis Students

The jeweler teamed up with two local organizations for its inaugural “Back to School and Bling” event.

11,685-carat Imboo emerald
SourcingAug 27, 2025
11,685-Carat Emerald Recovered From Zambia’s Kagem Mine

Dubbed the “Imboo,” or “buffalo,” emerald, the rough gemstone is part of Gemfields’ latest emerald auction, which is taking place now.

rio-article photo-diamond.jpg
Brought to you by
Taking the Moment Head On: How Rio Grande Champions the Present & Future of Fine Jewelry

As a leading global jewelry supplier, Rio Grande is rapidly expanding and developing new solutions to meet the needs of jewelers worldwide.

Shopping cart
SurveysAug 27, 2025
Consumer Confidence Slips in August Amid Job, Income Worries

Plans for dining out, booking vacations, and buying big-ticket items were down.

Mine + Found Play Collection Prize Bubble Locket, Whistle Pendent, Fortune Dice
CollectionsAug 27, 2025
Mined + Found’s New Collection Gets Playful

The “Play” collection centers on nostalgic toys that have kinetic elements to carry playfulness and wonder into adulthood.

CCWW lifesaver necklace
CollectionsAug 26, 2025
Does Your Jewelry Stack Need a Snack?

Designer Christina Puchi, the creative force behind CCWW Designs, has created charms and pendants based on iconic candies and crackers.

Nick Jonas x Fossil Campaign
WatchesAug 26, 2025
Nick Jonas Gets Nostalgic in New Fossil Campaign

The Jonas Brothers star showed off new timepieces against the backdrop of his favorite spots in his home state of New Jersey.

Wally Hinkamp and Donna Hinkamp Warren
IndependentsAug 26, 2025
Hinkamp Jewelers Celebrates 70 Years

The family-owned jeweler in Fayetteville, North Carolina, is in the hands of the second generation.

Emmanuel Raheb
ColumnistsAug 26, 2025
Back to School, Back to Style: Why August is Prime Time for Self-Gifting

In his latest column, Emmanuel Raheb shares tips for encouraging customers to treat themselves to new jewelry.

London Jewelers Rolex East Hampton Boutique Exterior
WatchesAug 25, 2025
London Jewelers Brings Rolex to Historic Hamptons Home

The new stand-alone Rolex boutique is housed in the former Odd Fellows Hall, a landmark built in 1897.

Madison Keys
CollectionsAug 25, 2025
Tennis Star Madison Keys Has the Perfect Necklace for the US Open

The Brilliant Earth ambassador co-designed a diamond medallion featuring meaningful symbols.

Marie Lichtenberg emerald and diamond locket on the 18-karat gold “Rosa” chain
TrendsAug 25, 2025
Amanda’s Style File: That’s a Wrap

Wrap jewelry is more than just a trend; it’s the perfect motif for the coming season of layering, scarves, and pumpkin spice.

WatchTime New York
WatchesAug 25, 2025
WatchTime NY Show Returns for 10th Anniversary Edition

The three-day watch collector show, coming this October, will feature 44 exhibiting brands, as well as a new dinner experience.

Sriram “Ram” Natarajan
GradingAug 22, 2025
Former Head of GIA India Promoted to Oversee Global Operations

Sriram “Ram” Natarajan is now GIA’s senior vice president of laboratory operations and is based out of the lab’s headquarters in Carlsbad.

Retrouvaí Diamond Vein Bond Collar
CollectionsAug 22, 2025
Piece of the Week: Retrouvaí’s ‘Diamond Vein Bond’ Collar

The one-of-a-kind collar represents the beauty of imperfection and the strength to rebuild.

Kendra Scott
MajorsAug 22, 2025
Kendra Scott Returns as CEO of Her Jewelry Empire

Three C-suite executives, including former CEO Tom Nolan, have resigned as part of what the company describes as a “transition.”

Claire’s storefront
MajorsAug 21, 2025
Claire’s Finds Buyer, Could Save up to 950 Stores

The retailer, which recently filed Chapter 11, inked a deal to sell its North American business and intellectual property.

Target CEO Brian Cornell and COO Michael Fiddelke
MajorsAug 21, 2025
Target Names New CEO as Sales Continue to Lag

Target CEO Brian Cornell will step down in February and be replaced by the company’s chief operating officer, Michael Fiddelke.

Jewelers of America in Washington DC
Policies & IssuesAug 21, 2025
JA, IDMA Talk Tariffs With Execs in DC

The group met with the president's senior trade advisor earlier this week to express the industry’s concerns about the effects of tariffs.

Tiffany & Co. Pop Up at U.S. Open
MajorsAug 21, 2025
Tiffany & Co. Pops Up at 2025 US Open

The pop-up will display this year's Tiffany & Co. Singles Championship trophies along with a diamond-encrusted tennis racket and ball.

Bellman’s Jewelers The Truthful Jeweler Alex Bellman
IndependentsAug 20, 2025
Bellman’s Jewelers Opens Second Store After COO's TikTok Takes Off

The New Hampshire-based store has expanded to Boston, propelled by the success of Alex Bellman’s TikTok page, “The Truthful Jeweler.”

Stock image of police cars with lights flashing
CrimeAug 20, 2025
Another CA Jewelry Store Rammed With Car, Robbed

The latest incident happened Monday at a store in Oakland, California, continuing a pattern JSA first warned about last month.

×

This site uses cookies to give you the best online experience. By continuing to use & browse this site, we assume you agree to our Privacy Policy