Tiffany & Co.‘s shares rose Thursday after the company revealed it has named Alessandro Bogliolo chief executive officer.
Shares of Tiffany were up 1.7 percent to close at $94.04 in New York Stock Exchange trading.
Bogliolo, 52, joins the firm from Diesel, where he has served as ceo since 2013. He is a veteran of the luxury jewelry sector, previously spending 16 years at Bulgari, where he worked as chief operating officer and executive vice president for jewelry, watches and accessories.
It is expected that Bogliolo will begin his role by October 2. In a statement, Tiffany noted that he will also join its board of directors.
Bogliolo arrives at an American jewelry house in flux – currently helmed by chairman and interim ceo Michael J. Kowalski, who stepped into the temporary role in February upon the ouster of then-ceo Frederic Cumenal, who had served in the position for less than two years. Kowalski was Cumenal’s predecessor as ceo.
In a statement issued by Tiffany, Kowalski spoke of the five-month search process for Cumenal’s replacement: “Today’s announcement concludes the board’s thorough process to identify and recruit an accomplished leader to position the company for sustainable growth in the years ahead.
“Alessandro has a well-deserved reputation for creativity and execution, having previously led a number of international brands to success and improved performance. I also believe that his vision and team-oriented approach make him an ideal fit with Tiffany’s long-standing values. Tiffany is an iconic brand and is at an important time in its history. We look forward to Alessandro and the Tiffany team delivering a distinctive vision of luxury and style to our customers around the world, while also focusing on driving attractive returns for our shareholders.”
Bogliolo noted of his new role: “I am honored and excited by the opportunity to lead this remarkable company. Tiffany, with its legendary history, has always represented luxury, style and an extraordinary standard of quality and excellence, and I look forward to working with the board and the rest of the Tiffany team to build on this foundation. It is my goal to continue to delight our customers with compelling product offerings, supported by best-in-class operations. I am committed to strengthening the company’s position as one of the world’s most important luxury brands and delivering value for all of our stakeholders.”
“Sixteen years in Bulgari certainly allowed him to mature a very significant experience in luxury jewelry and perhaps the arrival of Francesco Trapani on Tiffany’s board is indicating the direction the American company is taking,” said Giovanna Brambilla, partner at Milan-based executive search firm Value Search.
As reported in February, Tiffany reached an agreement with Jana Partners LLC and Trapani, which together own 5.1 percent of Tiffany’s outstanding shares and Trapani was named to Tiffany’s board.
Trapani joined the board’s nominating and corporate governance committee, as well as the search committee formed by the board to find a new chief executive officer for the company, effective last March. Former Tory Burch LLC and Ralph Lauren Corp. executive Roger Farah and former Jarden Corp. ceo James Lillie also joined the board at the same time as Trapani.
Trapani, was most recently chairman of Clessidra SGR, the largest private equity fund in Italy, from 2014 through 2016, spearheading the acquisition of the Roberto Cavalli brand. From 2011 to 2014, Trapani was chairman and ceo of LVMH Moët Hennessy Louis Vuitton’s Watches and Jewelry division. Before that, he was ceo at Bulgari. He has over three decades of experience in the luxury retail sector, having been at Bulgari from 1984 until 2011.
Before Bulgari, Bogliolo served as chief operating officer of Sephora North America. Brambilla noted that Sephora is a “great retail school even if in a very different segment, proving that luxury can and must acquire competences also from other market segments where best practices mature.”
She observed how the luxury industry is working to optimize its distribution through an omnichannel strategy. “An excellent level of customer experience is becoming a key element to ensure brand profitability, even for the most prestigious labels. Italian managers are recognized with the ability to combine method and approach with business intuition, creative sensibility and courage to innovate: it’s great that this is appreciated around the world.”
Armando Branchini, deputy chairman of Milan-based InterCorporate, said Trapani “has always held Bogliolo in high regard. Francesco knows how to pick ‘em. He creates a team and knows how to emphasize the talent of the best people.” Branchini also remarked on Bogliolo’s experience at Sephora as being relevant. “Tiffany is developing its retail channel.”
Bogliolo joined Diesel at the end of August 2013, succeeding Daniela Riccardi, who had exited the company in April.
His appointment reflected Diesel owner Renzo Rosso’s intent to reinforce the brand’s position in the high-end fashion arena, following the arrival of Nicola Formichetti as artistic director of the label earlier that year.
No doubt Bogliolo will now help lead the charge as Tiffany enters a new phase of its design history — helmed by chief artistic officer Reed Krakoff, who assumed the role in January when design director Francesca Amfitheatrof was pushed out.
Krakoff’s first designs for the house — collections in the home and accessories categories — are due to be unveiled this fall. His first jewelry designs for Tiffany are expected in 2018.
With these efforts, Krakoff and Bogliolo will look to tackle a lagging brand that has failed to galvanize younger consumer generations.
Paul Lejuez, analyst at Citi Research, has a “neutral” rating on shares of Tiffany. According to Lejuez, Tiffany’s primary challenge is in attracting the younger customer, while not alienating its core customer. “With chief artistic officer Reed Krakoff working on new product launches and improving the merchandise, we believe his initiatives will be critical to whether they are successful walking that line,” the analyst concluded.
Randal J. Konik at Jefferies kept his “buy” rating for Tiffany’s shares. Konik’s thesis since February has been that the departure of Cumenal was good for Tiffany, and would give the jewelry retailer room for change. That thesis hasn’t changed.
According to Konik: “We believe he is a strong fit, given his luxury background, and note that his connection to JANA’s board appointee Francesco Trapani [former Bulgari ceo] shows that the new directors are effectuating change.”
Konik said the “buy” rating thesis is simple: “We believe better product, better people and better processes” will lead to better sales/margins/earnings and return on investment capital, which in turn “will lead to upward earning EPS revision, an expanded multiple and a higher stock price.” The analyst said Bogliolo’s focus on improving the customer experience at Diesel SpA is similar to Tiffany’s recent undertaking on driving stronger conversion through an enhanced in-store experience.
He also noted that Tiffany has made “significant headway” in its turnaround efforts, with signs of traction in the fashion jewelry category and steady margin improvement. The next leg up would hinge on an acceleration in the pace of change to drive the topline, he said, adding that now the “team is in place to do just that.”