Tiffany & Company

Tiffany & Company was the leading U.S. luxury jewelry brand, generating more than $2.6 billion in revenue through 167 retail outlets globally and from catalogue and Internet sales. For nearly 170 years, Tiffany had managed its brand. In February 2007, a hedge fund, Trian Fund Management LP, announced that it had bought a 5.5% stake in Tiffany, and became its largest shareholder. Trian believed that Tiffany was undervalued and stated that it wanted to help the company “improve its earnings per share by addressing various operational and strategic issues.” In response, Tiffany began to consider different actions to increase shareholder value. Excerpt UVA-S-0141 TIFFANY & COMPANY Tiffany & Company (Tiffany) was the leading U.S. luxury jewelry brand, generating more than $ 2.6 billion in revenue through 167 retail outlets globally and from catalogue and Internet sales. Tiffany's market cap was approximately $ 4.4 billion. For nearly 170 years, Tiffany had managed its brand. To this end, its growth strategy had been called “Growth without Compromise.” Tiffany had executed this strategy by limiting its annual store openings, phasing rollouts of new products, limiting sales of its lower-priced products, and refusing to license the Tiffany name outside of its core competencies. In February 2007, Trian Fund Management LP, a hedge fund run by the billionaire investor Nelson Peltz, announced that it had previously bought a 5.5% stake in Tiffany, becoming its largest shareholder. Trian believed that Tiffany was undervalued and stated that it wanted to help the company “improve its earnings per share by addressing various operational and strategic issues.” In response, Tiffany began to consider different actions to increase shareholder value. Under consideration were two strategic moves: opening more stores at a faster pace and licensing the Tiffany brand to an Italian fashion-eyewear manufacturer and distributor that owned 5,500 outlets, including LensCrafters, Pearle Vision, and Sunglass Hut. . . .