Editor’s Note
This article details a high-end corporate event and an internal morale initiative at Tiffany & Co., illustrating the unique pressures and strategies within the luxury retail sector.
In the spring of last year, Tiffany managers were preparing to host a Blue Book event at the Beverly Hills mansion where staff were told the infamous horse-head-in-the-bed scene from “The Godfather” was filmed. Clients would be treated to a five-star hotel stay and get first dibs on one-of-a-kind Tiffany jewellery, some of which cost tens of millions of dollars apiece.
When Tiffany & Co. executives were looking for ways to boost staff morale, they rolled out an internal app called “Tiffany Joy.” They asked workers to post photos celebrating couples getting engaged, colleagues’ big sales and other meaningful moments at stores. It didn’t take long to turn into a chore. Executives started telling US staff they weren’t posting frequently enough and asking workers to “like” posts more quickly. Within a few months, by early 2024, some US employees had given the app a nickname: “Forced Joy.”
Employees said they were surprised that Kilaniotis, who is responsible for nearly half of Tiffany’s global revenue, focused on an internal app while stores were missing sales targets and employees were leaving for competitors, according to current and former executives, managers and employees familiar with the app who were unauthorised to speak publicly on the matter.
Kilaniotis and chief executive officer Anthony Ledru joined Tiffany from Bernard Arnault’s Louis Vuitton after the fashion tycoon’s conglomerate, LVMH, bought the jeweller for $16 billion in 2021, the world’s biggest luxury acquisition. LVMH aimed to combine the venerable jewellery retailer’s history and design with the conglomerate’s extensive resources to expand Tiffany’s presence in markets like China and India, enhance its digital capabilities and capture a new generation of luxury consumers.
So far, though, Tiffany’s performance doesn’t appear to stack up against Louis Vuitton, Dior, Bulgari and the other prestigious brands under LVMH Moet Hennessy Louis Vuitton SE, which reports earnings on Jan. 28. LVMH doesn’t break out figures for Tiffany but sales at the conglomerate’s watches and jewellery segment dropped 4 percent in the last quarter, the division’s third straight quarterly sales decline.
Under Ledru, 51, the Tiffany CEO responsible for setting the vision, and Kilaniotis, who oversees the execution of those strategies in the US, Tiffany has tied employees’ paycheques to sales goals that workers rarely met; reneged on a pledge to pay some bonuses and told store directors they were not doing enough to attract wealthy clients to exclusive gatherings, according to 16 current and former Tiffany executives and employees who weren’t authorised to speak publicly.
The issues are particularly acute at the company’s Manhattan flagship store, which typically generates around 10 percent of Tiffany’s annual global revenue. After LVMH bought Tiffany, it spent more than $350 million to redesign the Landmark store, as it’s known, the most expensive revamp in the conglomerate’s history.
The number of full-time salespeople at Landmark fell in December by around 40 percent from a year earlier to roughly 90, according to a person familiar with staffing levels who wasn’t authorised to publicly discuss the numbers. The figure excludes seasonal workers.
There are some signs of improvement. Tiffany’s flagship hit sales targets during the 2024 holiday season. But Tiffany’s market share dropped by one percentage point last year to 12 percent of global luxury branded jewellery, ceding share to companies such as Parisian jewelleer Boucheron, according to data analytics firm Euromonitor International. And revenue growth at existing Tiffany stores globally is forecasted to be more than 10 percentage points lower than at Cartier in the current fiscal year, according to Bernstein analyst Luca Solca.
In a statement, a Tiffany spokesperson said, “there is a clear vision of elevation for Tiffany in the US, evident in sales growth, store renovations, people development, talent acquisition, brand image.” Tiffany said the company intentionally “rightsized” staffing at the flagship store in 2024. “This decision was made based on the appropriate and needed coverage.” Representatives at Tiffany declined to comment on Kilaniotis’ role in the company’s performance or culture and didn’t make him or Ledru available to comment. Neither executive responded to requests for comment.
One reason cited for some of the staff exits at Tiffany has been an unpredictable bonus system, some of the current and former managers and salespeople said.
In 2023, executives told nearly two dozen managers at Tiffany’s Manhattan flagship that they’d receive their full bonuses after hitting certain revenue targets — figures managers could see on an internal system that tracked sales, these people said. But a few days before the bonuses would have been paid, the company seemed to reverse course.