NEW YORK • As Tiffany's new chief settles into the job, he faces a crisis that runs deeper than sluggish retail traffic - Americans are losing their passion for jewellery.
Few other product categories in the United States are grappling with as many headwinds - indifferent millennials, falling marriage rates, synthetic imitations. Sales are slumping as discretionary spending falls and shareholder unrest bubbles over.
The US$60 billion (S$82 billion) jewellery market shrank 6.3 per cent last year, and the decline will continue until at least 2022, based on estimates by research firm Euromonitor. Store closures accelerated 53 per cent last year, according to the US Jewellers Board of Trade.
"My concern is always for our inddustry's long-term health," said board president Anthony Capuano. "There will always be jewellery sales. But right now, I think there is not as much interest in jewellery."
This is reflected clearly at Tiffany's. Fewer shoppers are going into its stores, and it has been unable to draw in millennials - who are famously lukewarm about many products, including jewellery. Same-store sales have dropped in the past five out of six quarters.
Amid the turmoil, Tiffany is betting that industry veteran Alessandro Bogliolo will be able to reinvigorate the chain's 180-year-old brand. He will take over efforts to attract younger shoppers by renovating stores and introducing new designs.
Activist investor Jana Partners has said that Tiffany's shares are undervalued, while another investor, CtW Investment Group, is pushing for greater diversity and younger directors on the jeweller's ageing board.
Another problem, according to the head of an industry group, is that jewellery sellers have lost a deeper connection with their clients.
"The industry has become so impersonal in many ways. We've lost the emotion," Mr Jean-Marc Lieberherr, who heads the Diamond Producers Association, said in an interview in New York.
A decline in marriage rates has hurt the industry as well. Fewer than half of American adults today are married, compared with 72 per cent in 1960, according to the Pew Research Centre.
Despite the array of challenges, Mr Capuano of the Jewellers Board noted that this business has always been a cyclical one.
"It's an evolution," he said. "It's change that we need to adapt to."