Page 263

T I F FA N Y & C O [ T I F : U S ]

AN OLD WORLD LUXURY BRAND THAT IS GOING NOWHERE? ■

Many of the global luxury players have struggled in recent years as macro-economic uncertainty and headwinds in Europe and America, and the tightening of anti-corruption laws in China negatively impacted consumer sentiments and spending.

Recently, a number of Tiffany’s luxury peers like Kering, Richemont, LVMH and others have returned to growth. However, Tiffany has continued to struggle with disappointing financial results, partially due to the strong US Dollar, soft tourism numbers and a weak retail environment in the US. Some have blamed the poor performance on a tired brand image and lack of compelling products/collections to attract younger customers. Lastly, the proximity of its important New York Flagship store to Trump Tower also negatively impacted sales during the US Presidential Election.

Tiffany is one of the oldest positions in the Elevation Capital Value Fund, as we have viewed the brand/company as underappreciated and undervalued. We first established a position in Tiffany in April 2012, and currently have an average cost of US$61.74* (vs a current price of US$95.52 as at 7 December 2017) since this position was initiated.

Recent events such as the dismissal of Ex-CEO Frédéric Cuménal, the hiring of Reed Krakoff as Chief Artistic Officer, the involvement of activist investor JANA Partners in February 2017, and the hiring of new CEO Alessandro Bogliolo in July 2017 have built expectation of improved business performance and shareholder returns.

$120

$100

Average Cost = US$61.74*

$60

$40

$20

*Elevation Capital Value Fund average cost as at 7 December 2017, includes dividends received

Jan 18

Nov 17

Jul 17

Sep 17

May 17

Jan 17

Mar 17

Nov 16

Jul 16

Sep 16

May 16

Jan 16

Mar 16

Nov 15

Jul 15

Sep 15

May 15

Jan 15

Mar 15

Nov 14

Jul 14

Sep 14

May 14

Jan 14

Mar 14

Nov 13

Jul 13

Sep 13

May 13

Jan 13

Mar 13

Nov 12

Jul 12

Sep 12

May 12

Jan 12

Mar 12

Nov 11

Jul 11

$0 Sep 11

Share Price (US$)

$80

263

Profile for Richard

Elevation Capital Research Annual 2018  

Elevation Capital Research Annual 2018