Luxury jeweller Tiffany & Co. is facing a slew of challenges.
Research firm Mizuho Securities just downgraded the brand to “neutral” during a time where sales are falling, profits are diminishing, and executives are leaving the company.
Tiffany had a brutal holiday season, with sales down 4% from the year before.
The jewellery company announced Sunday that CEO Frederic Cumenal stepped down, a move that’s concerning analysts. Former CEO Michael Kowalski is leading the company until a replacement is found. The company’s CFO and design director have also departed in the past year.
Another one of Tiffany’s foremost challenges?
Consumers are increasingly unwilling to shell out for jewellery.
As shoppers increasingly spend on categories like technology, healthcare, and travel, jewellery is less of a priority. It’s possible some holiday customers chose to buy Apple Watches instead of Tiffany bracelets.
The downward sales trend goes back several years, as evidenced by this Mizuho chart.
Tiffany claims sales were hurt because some shoppers can’t make it into the flagship store.
The Fifth Avenue store is located near Trump Tower, which has been overrun with tourists, protesters, and security since the election.
“Management attributed the lower sales to local customer spending, with a decline in US sales exacerbated by a 14% decline at the company’s flagship store on Fifth Avenue in New York, which we attribute at least partly to post-election traffic disruptions,” the company said in a January statement.
While shares are up 24% in the past year, growth has stalled in recent months.
Tiffany is currently working on a turnaround by investing in the customer experience, marketing, and business operations.
It also hired Lady Gaga to star in its first Super Bowl ad.
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