The Wall Street Journal-20080117-Peltz- Trian Increase Stake in Tiffany
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Peltz, Trian Increase Stake in Tiffany
Taking advantage of a sharp drop in the shares of Tiffany & Co., investor Nelson Peltz and his Trian funds boosted their stake in the luxury jeweler to 7.9% from 5.6%, they disclosed yesterday.
Tiffany shares have fallen 20% this year amid signs of a slowdown in the luxury-goods market. Last week, Tiffany said the number of purchases at its U.S. stores dropped during the holiday season, a sign that a pullback in consumer spending that started at the low end of U.S. retailing is reaching high-end merchants.
Mr. Peltz, a billionaire activist investor best known for his 1990s turnaround of beverage maker Snapple, disclosed nearly a year ago that his Trian Fund Management LP had taken a 5.54% stake in Tiffany. He and his Trian partners Peter May and Edward Garden bought another 3.7 million shares from Dec. 13, 2007, to Tuesday, according to the latest regulatory filing. Their stake now totals 10.72 million shares.
A spokeswoman for Mr. Peltz said he had no comment. In an interview last year, he said his fund wasn't seeking a board seat, though he didn't rule out the possibility of a more activist approach down the road.
Mr. Peltz also prodded Tiffany Chief Executive Michael J. Kowalski and some board members to expand Tiffany's product line to include items such as high-end purses, ties and scarves and to broaden distribution of watches outside Tiffany stores.
Tiffany has already made one of those moves. In December, it said it will team with Swatch Group Ltd. in a deal calling for the Swiss watchmaker to help Tiffany produce and sell a line of Tiffany-branded watches. Watch sales now represent about 2% to 3% of Tiffany's annual sales of $2.6 billion, compared with 20% to 40% for some larger luxury companies.
A Tiffany spokesman said the New York company had begun discussing the deal with Swatch before Mr. Peltz was involved. He "has periodic discussions" with management, the spokesman added, saying: "We view Trian's additional investment as an expression of their confidence in Tiffany's growth potential."
Tiffany shares rose $1.33, or 3.7%, to $36.99 as of 4 p.m. in New York Stock Exchange composite trading.
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Brian Coyle contributed to this article.
