As Tiffany & Co.’s Alessandro Bogliolo spearheads the company’s growth plans, he’s making strategic investments now while also integrating key learnings from experiential and digital pop-ups into tomorrow’s store design.
Bogliolo, chief executive officer, spoke with WWD Tuesday after the company posted second-quarter results. And while those results bested Wall Street’s expectations for both earnings per share and sales, the ceo was quick to note that strategic investment spending — intended to support longer-term sustainable growth — would increase for the remainder of the fiscal year and dampen the impact of any earnings gains. That was evident when the company provided third-quarter guidance for net income and EPS, stating that they were estimated to be lower than year-ago figures. Helped by a strong first half, the company raised diluted EPS guidance for the year to $4.64 to $4.80, up from a prior forecast of $4.50 to $4.70.
For the second quarter ended July 31, net income rose 25.8 percent to $144.7 million, or $1.17 a diluted share, on a 12.1 percent rise in net sales to $1.08 billion as comparable sales gained 8 percent. Wall Street was expecting EPS of $1.01 on sales of $1.04 billion.
On the conference call to Wall Street analysts, the ceo said renovation of the company’s New York flagship on Fifth Avenue in Manhattan will begin in next spring, with completion expected in the fourth quarter of 2021. The luxury flagship opened in 1940 and the last renovation was completed more than 15 years ago. “Our plans call for much more, a transformation that is aimed to delight our customers,” Bogliolo said.
In the telephone interview, Bogliolo said, “Our aim in any case is to preserve the historical significance of the building, which has been a part of New York and also, first and foremost, a part of the DNA of our brand.” He noted that the class and elegance of the outside facade, along with the inside structure — a huge space that has no columns and high ceilings — “deserves a lot of respect” and that the remodeling will keep in mind the period in which the building was constructed.
One big change he did disclose was the planned increase in square footage for the selling space. Located on the corner of 57th Street at 727 Fifth Avenue, the building is about 124,000 square feet and only 45,000 square feet is allocated to its retail space. In addition to increasing the retail component, plans include an events space for VIP customers. While the renovation is occurring, the ground floor will be open for business and the company has leased space in an adjacent building for its other business categories. While jewelry sales are up and doing well in all categories ranging from engagement to designer and high jewelry, Tiffany’s smaller home and accessories offerings have become a growing component of its overall business.
And learnings from the pop-up, which includes more digital and tech features than what’s found in its traditional brick-and-mortar format, are being incorporated into Tiffany’s store fleet. “We are definitely leveraging and learning from it. We [now] provide the same service to more than 100 stores worldwide,” he said. While currently at about one-third of the store fleet, the ceo said plans are in place to increase the service — called the Make It My Tiffany program — to stores at its larger metro areas.
As for the pop-up itself, Bogliolo said, “Business is fantastic. It’s a way to answer the customer’s request for uniqueness and please our customers. We’ve seen this now for several years.” He noted that the trend was first seen in small leather goods where initials were the most popular form of personalization, and now that has evolved to include jewelry items.
The company introduced its new Paper Flowers collection in May — the first jewelry line under chief artistic officer Reed Krakoff, although he’s already unveiled his home, eyewear and leather goods products for the firm — which Bogliolo said has now been rolled out globally. The platinum and diamond line is supported by both visual merchandising in the store that includes paper graffiti flowers in silver, white and Tiffany blue, actress Elle Fanning fronting the “Believe in Dreams” campaign and a deep dive into social media, such as Instagram postings.
According to the ceo, up next is the new engagement jewelry design concept Tiffany True. The company is also planning a “whimsical holiday campaign” for later this year.