By Mimosa Spencer
NEW YORK (Reuters) - Tiffany & Co (NYSE:TIF). lifted the lid on its newly renovated New York city flagship on Wednesday, the centerpiece of a broad brand reset orchestrated by its owner, the world's biggest luxury group LVMH.
"Wonder Woman" film actress Gal Gadot presided over the early morning ribbon cutting ceremony, flanked by Tiffany CEO Anthony Ledru and Alexandre Arnault, executive vice president of product and communications for the label -- one of LMVH chair and CEO Bernard Arnault's five children who hold key positions in the French firm.
The executives snipped the ribbon in the label’s trademark robin’s egg blue, prompting applause from the crowd that spilled out onto the sidewalk of the store, at the corner of East 57th Street and 5th Avenue.
The nearly four-year overhaul of the historic building, which was built in the early 1940s and anchors a prominent stretch of midtown Manhattan real estate, began before Tiffany was purchased by LVMH, Europe's most valuable company.
The store accounted for 10% of Tiffany's global sales before closing for renovations in 2019 and will likely remain the label's most important retail outlet, both in terms of sales and as a means to project its image, Ledru said.
"It's not a flagship, it's a landmark -- a landmark that has been here for 83 years, it's the renovation of the century," Ledru told journalists after the ceremony, speaking from the glass-lined penthouse on the 10th floor, overlooking Central Park.
LVMH did not reveal the cost of renovations, but executives said it was by far the group's largest retail investment -- surpassing Dior's Avenue Montaigne flagship in Paris, opened last year.
Tiffany's Fifth Avenue outpost is key to its brand revival, hinged on moving upmarket and beyond the traditional focus on engagement rings.
Alexandre Arnault spearheaded the label's initial reset with an advertising campaign starring Beyonce -- wearing the famous yellow Tiffany diamond -- and Jay-Z.
Product-wise, the label's top selling product lines include the T-shaped jewelry, chunky HardWear line and the more recently introduced oval-shaped Lock bracelets.
Now the priority will be on renovating the label's retail network, essential for Tiffany to bridge the gap with Cartier, the world's largest jewelry label, which belongs to Richemont, Ledru said.
The investment comes as European labels including LVMH's star fashion labels Louis Vuitton and Dior, have recorded strong, post-pandemic demand from Americans that has lasted for months but is beginning to show signs of easing up.
LVMH's U.S. sales grew 15% last year, and the U.S. market accounted for 27% of overall revenue, as shoppers shrugged off rising prices and turbulent markets.
LVMH officials have said they prioritize developing Tiffany's sales while margin growth would likely kick in at a later stage, mirroring its strategy for its Italian jewelry label Bulgari.
Tiffany sales came to 5.1 billion euros ($5.63 billion) in 2022 and are forecast to reach 7.4 billion in 2025, according to HSBC.
($1 = 0.9061 euros)