Tiffany vs. Tiffany

27 August 2020 By John Foley Follow @johnsfoley

There’s little doubt the jeweler is no longer worth the $16 bln LVMH agreed to pay last year. Yet Tiffany’s board is duty bound to push for the highest price. That’s good for investors, but not for Tiffany itself. To earn a decent return, LVMH may have to trash an American icon.

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Tiffany on Aug. 27 reported revenue of $747 million for the three months ending July 31, a 29% drop from the same period a year earlier, but touted an improvement on the preceding quarter as jewelry sales in some countries recovered from the effects of the Covid-19 pandemic.

Analysts had on average expected revenue of $772 million, according to Refinitiv. Tiffany’s online sales grew 123% during the quarter, making up 15% of total revenue, compared with 6% in each of the preceding three full years.

LVMH agreed in November to buy the U.S. luxury goods maker for $16 billion. Tiffany had a market capitalization of $14.7 billion at the close of U.S. trading on Aug. 26.

Tiffany told the owner of Louis Vuitton on Aug. 24 that it planned to extend the deadline for the deal’s closing to Nov. 24 to allow time for regulatory clearance. LVMH said in a filing that it retained the right to challenge that extension.

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