New York, NY—Tiffany & Co. may be famous for creating the modern solitaire diamond setting, but its own broken engagement is about to get ugly. Tiffany and LVMH are going to court. Following the French luxury conglomerate’s efforts to back out of its planned merger with the American jewelry house, the jeweler is going to court to force the deal.
A judge in Delaware (where Tiffany’s incorporation is officially based) has set January 5, 2021 as a trial date, in anticipation of reaching a ruling before the U.S. antitrust clearance expires on February 3, 2021.
LVHM, which originally bid $16 billion for Tiffany, has argued—truthfully—that the adverse effect of the pandemic has had a material impact on the store’s sales and sought to reduce the acquisition price. But sales are starting to rebound and the jeweler believes the Tiffany brand still has great long-term value, so it is not budging on the previously-agreed price.
In the meantime, writes Seeking Alpha, Tiffany is in a holding pattern, with capital expenditures and outstanding shares both capped until the deal’s closing date. The jeweler also can’t hire or fire employees at a vice president or higher level, or enter into material contracts or leases without LVMH’s consent.
Update: LVMH on Monday has countersued Tiffany, saying mismanagement during the pandemic has made it particularly vulnerable to downturn, citing its reliance on foot traffic and mall traffic. Tiffany, meanwhile, on Tuesday alleged the countersuit is just another effort by LVMH to improperly renegotiate the price.
Separately, the San Jose Mercury News reports that Tiffany is opening a new, larger store at the Westfield Valley Fair Mall in San Jose. The 5,400 square foot space, with its own exterior entrance featuring a two-story glass and marble facade, expands the jeweler's existing 4,200 square-foot outpost at the shopping center. It is slated to open Friday.