Hey there jewelry aficionado!
Welcome to today’s jewelry news update. Have we got the tea for you.
As you know we have been following the LVMH acquisition of the Tiffany & Co. brand. It has been a long and difficult process. In mid-summer 2019 their were rumors that LVMH wanted to buy Tiffany’s but it took months to iron out the details. When the deal was finalized in November 2019, LVMH agreed to buy Tiffany’s at $135 a share (about $16.2B).
News of the acquisition, however, caused a drop in shares thus delaying the deal. To bolster stocks T&Co hired a new Marketing Manager in December, from the shuddering retail outlet Barney’s. Holiday sales were on target and Tiffany’s stock prices recovered.
Then COVID circled the globe. Numerous LVMH brands felt the pinch as their luxury status made them less important that toilet paper, especially in the US. Tiffany’s also suffered with extended store closures caused by lockdowns in many cities in the US and worldwide. Nonetheless, Tiffany’s Stockholders agreed to the buyout in February 2020.
Now, as the world tentatively reopens, the US erupts with protests and riots triggered by the murder of George Floyd. Women’s Wear Daily reports that these unusual times are giving a lot of investors cold feet. LVMH is not officially reexamining the Tiffany & Co deal, but they are “concerned about the impact of … the coronavirus pandemic, … [and] the growing social unrest over the death of George Floyd at the hands of Minneapolis police” and the effect that these events will have on the market in the Americas.
Will the deal go ahead or fall through? LVMH says they will honor their contract, but T & Co has been strangely quite. Should the deal sour, LVMH could sue Tiffany’s to exit the contract in the same way that the Sycamore Partners sued to breech their purchasing contract with Victoria’s Secret.
What once seemed a run-of-the-mill acquisition is now cast in doubt. What other rumblings will 2020 bring? Hopefully, none!
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