Jul 22, 2014
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Tiffany CEO Kowalski to retire, president Cumenal to take over

Jul 22, 2014

Upscale jeweler Tiffany & Co said Michael Kowalski, its chief executive of 15 years, would retire next year and President Frederic Cumenal would succeed him.

Kowalski, 62, joined the company in 1983 and became CEO in 1999. He took the additional role of board chairman in 2003.

Cumenal, 54, will take over as CEO from April 1 next year, just over four years after joining Tiffany. He was appointed president and given a newly created seat on the company's board in September 2013.

Cumenal joined Tiffany in 2011 after a 15-year stint at Louis Vuitton brand owner LVMH Group, where he was most recently the president and CEO of French champagne maker Moet & Chandon.

"We believe this transition will be considered a positive as (Tiffany's) senior management team continues to evolve into one with much broader global luxury goods experience than everbefore," Topeka Capital Markets analyst Dorothy Lakner wrote in a note.

Lakner said Tiffany was searching for a replacement for Cumenal.

Shares of Tiffany, known for its blue boxes and its Fifth Avenue flagship store in Manhattan, were slightly down at $98.92 in afternoon trading on the New York Stock Exchange. The stock was trading around $15 when Kowalski took over as CEO.

Kowalski oversaw Tiffany's expansion in Asian markets, particularly Japan and China. The new markets helped the company offset the impact of sluggish sales in its home U.S. market in the past two years.

Cumenal brings a global luxury retail experience to Tiffany, Edward Jones analyst Brian Yarbrough told Reuters.

"In his role so far, they've liked him and he's been successful ... I think they see him as the natural guy to take over and run the chain," he said.

Yarbrough, however, said Tiffany was not the kind of brand to rush into opening stores. "It's just going to continue to show slow, steady growth and increase its brand relevance over international markets."

New York-based Tiffany has the second highest number of stores in the Asia Pacific region. The company operated 72 stores in the region as of Jan. 31.

In the past two years, Tiffany had been struggling to find the right balance between the pricey jewelry for which it is known and cheaper silver items that generate a quarter of sales.

The company refreshed its design team last September by appointing Francesca Amfitheatrof, who has worked for top brands such as Chanel, Fendi and Marni, as its design director.

Her first collection for Tiffany is set to hit the stores in September.

Tiffany's efforts seem to be paying off, with U.S. same-store sales rising 8 percent in the first quarter. Tiffany also raised its full-year profit forecast in May.


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