BUSINESS OF FASHION: TIFFANY & CO. IS WALKING A TAKEOVER TIGHTROPE
America’s foremost jeweler is attracting a less welcome type of customer. Tiffany & Co.‘s shares dropped 17 percent this week to a two-year low. That leaves its share price at $86, a level which many analysts say make the $11 billion luxury-jewelry company an attractive buy — for both investors and a takeover.
Tiffany’s sluggish holiday season in the U.S. failed to meet executives’ sales targets, expected to offset declining profit in the Japanese market. The company is known for its iconic prestige engagement rings, novelty jewelry and luxury trinkets–gifts that beef up quarterly profits.
With the drop in share price, Tiffany is once again a target for luxury conglomerate LVMH, which has long considered the jeweler a desirable potential addition to its roster of high-profile brands. But The Business of Fashion reports that management is not enthusiastic to sell.
“The company and its stock are no strangers to hiccups, and that is all this is,” said Howard Ward, chief investment officer of growth equities for Gamco Investors Inc., a Tiffany & Co. shareholder.
Ward also says that buyout firms tend to target flagging businesses with weak prospects, which is not Tiffany’s status, leaving attempt at a takeover up to LVMH head Bernard Arnault’s next move.
Images via Tiffany & Co.