Tiffany tanks as Lady Gaga fails to boost sales
Even Lady Gaga couldn’t save Tiffany over the past three months.
The luxe jewelry chain, which signed the entertainer earlier this year as a high-profile marketing deal — and featured her an extended-play TV spot during the Super Bowl in February — reported Wednesday an unexpected 2 percent drop in same-store sales for the three months ended April 30.
Investors, expecting a modest increase as the New York company battles back from a rough 2016, ran from the stock, pushing shares down 8.8 percent, to $84.99, in early morning trading.
Shares had been up 20 percent this year before the sell-off.
Same-store sales were down across the globe — although were down the sharpest in North and South America, the company said. Total sales inched up about 1 percent, to $899.6 million.
Tiffany management attributed the lackluster performance to “lower spending by both foreign tourists and local customers.
The chain had hired Lady Gaga to promote a new line, called HardWear, aimed at attracting a younger customer. It is also in the middle of a major renovating of its stores.
The company is also dealing with changes in the C-suite.
In February, as it was tallying up the bad news from the previous year, the board ousted Chief Executive Frederic Cumenal. It is still searching for a permanent CEO as Chairman Michael Kowalski serves that role on an interim basis.
It wasn’t all bad news for Tiffany, however. Gross margins increased to 62 percent in the period from 61.2 percent a year earlier.
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