Less than a month after its CEO Frederic Cumenal abruptly stepped down, the high end jeweler has bowed to pressure from an activist to add directors to the board. Tiffany and Jana Partners announced on Tuesday they had agreed to add three industry heavyweights to the flagging retailer's board. Roger Farah, James Lillie and Francesco Trapani would be joining the board no later than March 6, increasing the board's size to 13 from 10 members.
Jana Partners, together with Francesco Trapani, own approximately 5.1% of Tiffany. Trapani will join the board's nominating and search committee and lead a committee specially formed to search for a new CEO.
Former CEO Michael J. Kowalski has served as interim CEO in addition to his role as chairman of the board since Cumenal stepped down on Feb. 6.
The newest board members have quite the resume.
Farah is the co-CEO of fashion house Tory Burch and the former CEO of Polo Ralph Lauren (RL - Get Report) . He is also an independent director on the boards of Aetna Inc. (AET) and The Progressive Corp. (PGR - Get Report) . Farah's retail experience includes stints at Macy's (M - Get Report) , Kate Spade (KATE) and Toys R' Us.
Lillie is the former CEO of Jarden Corp., which has since been sold to Newell Rubbermaid (NWL - Get Report) . Lillie has more than 20 years of experience in the consumer products sector. He is currently an independent director on Nomad Foods Ltd's (NOMD - Get Report) board.
Trapani, for his part, has had an illustrious career in the luxury goods sector. He is the former CEO of Bulgari, seeing the luxury house through its acquisition by luxury group LVMH (LVMUY) in 2011. Trapani has served as CEO of LVMH's Watches and Jewelry Division, and more recently as adviser to the group chairman of LVMH.
Trapani has also served as the chairman of Robert Cavalli and Clessidra.
To be sure, there is no doubt why Tiffany's board needed a refresh. Before his ouster, Cumenal was the last person to join the board three years ago, according to BoardEx data. BoardEx is a business unit of TheStreet. The data show that two directors, William Shutzer and Charles Marquis, have been on the board for more than 30 years and independent director Rose Marie Bravo has held the seat for upwards of 19 years.
Persistently weak sales and profit have also become the norm. That includes a 4% drop in sales year-on-year in the Americas for the two months ending Dec. 31, 2016 and a 14% decline at the flagship store on Fifth Avenue due to disruption caused by President Donald Trump's security.
Jana Partners' Barry Rosenstein is no stranger to launching dissident directors. The activist fund has launched seven proxy contests and threatened nine since 2001.
Rosenstein isn't the first activist to target Tiffany, either. Trian Fund Management's Nelson Peltz launched a public activist campaign at the jeweler in 2007, reporting a 5.5% stake. In 2008, Tiffany's added Trian Fund's co-founder and partner Peter May to its board. However, by 2011, Peltz had cut his stake to below 5% and by 2016, had liquidated his position -- the company's stock price had appreciated significantly in the interim. Nevertheless, May continues to hold a position on Tiffany's board.
With the addition of three Jana-backed directors, there will be four activist nominated board members on the company's soon-to-be 13 person board.
--Ronald Orol contributed to this report.