Score a victory at Tiffany & Co. for activist investor Jana Partners, which has won board seats at the struggling jeweler and is filling two of them with industry heavyweights: Roger Farah and Francesco Trapani.
The addition of three new board members was the result of an agreement between Tiffany and Jana Partners LLC and Trapani. Jana and Trapani together own 5.1 percent of Tiffany’s outstanding shares. Trapani was also named to Tiffany’s board.
In addition to Farah and Trapani, the company added James Lillie to the board. Further, Trapani will join the board’s nominating and corporate governance committee, as well as the search committee formed by the board to find a new chief executive officer for the company. The firm’s former chief executive officer Frederic Cumenal resigned on Feb. 5. All three newly named independent board members begin their service on March 6. The addition of the new board members increases the board to 13 members from 10.
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Michael J. Kowalski, chairman and interim ceo, said, “These three new directors are all accomplished executives with a broad range of relevant experience and skills that will benefit all shareholders as we focus on accelerating the execution of our core business strategies.”
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Kowalski added that the strength of the board would be an asset to the firm’s ceo search process. “I look forward to completing that process and welcoming our new ceo to our board and, after an appropriate period, I anticipate being able to relinquish my responsibilities as chairman to a successor,” he said.
It has been a period of change for Tiffany. In addition to the resignation of Cumenal, the company in January pushed out creative director Francesca Amfitheatrof and hired Reed Krakoff to turn things around at the luxury chain. Krakoff had long served as president and chief creative director at Coach before leaving in 2014 to pursue his own label, which closed in 2015.
Tiffany on Tuesday said it has entered into cooperation agreements with Jana Partners and Trapani. Under the terms of the agreements, Tiffany will nominate Farah, Lillie and Trapani to the board at the firm’s 2017 annual meeting of shareholders, while Jana and Trapani have agreed to the usual standstill and voting commitments. Further Jana and Trapani have “committed to be independent of each other going forward.”
Barry Rosenstein, managing partner of Jana, said, “We are very pleased to have worked constructively with Tiffany & Co. to appoint Roger, James and Francesco to the board. Their fresh perspective and unique insight will be invaluable as the board keeps working to improve performance and create shareholder value.”
Tuesday was a good day for Jana, which also saw Bristol-Myers Squibb Co. bowing to the activist investor’s demands. Bristol also added three directors to its board – bringing the number to 14 – in a deal with Jana. Rosenstein was previously on the board of Walgreens Boots Alliance Inc. – from September 2014 through May 2016 – and left per an agreement with Walgreens once Jana reduced its investment in the chain. Rosenstein joined the Walgreens board at the time Walgreens and Alliance Boots combined in 2014 to become a global company. Jana was also a Kate Spade & Co. investor, but has since closed out its position.
As for the new Tiffany board members, Farah, 64, has been the co-chief ceo and board member at Tory Burch LLC since September 2014. Before that he was a member of the board at Ralph Lauren Corp. from 2000 to 2014 where he was president and chief operating officer, and later executive chairman. Before joining Ralph Lauren, Farah was chairman and ceo of Venator Group Inc., now Foot Locker Inc., and prior to that held stints as president and chief operating officer of R.H. Macy & Co. Inc. and as chairman and ceo of Federated Merchandising Services. He is currently on the boards of The Progressive Corp. and Aetna Inc., and is a non-executive director of Metro Bank PLC.
Lillie, 55, is the former ceo at Jarden Corp. He has over 20 years of experience in the consumer products sector. He held senior positions at Jarden Corp. from August 2003 through the sale of the company to Newell Brands in April 2016, including chief operating officer and later ceo. Before joining Jarden, he held senior level posts at Moore Corp. Ltd., and at the portfolio companies of Kohlberg, Kravis, Roberts & Co.
Trapani, 59, was most recently chairman of Clessidra SGR, the largest private equity fund in Italy, from 2014 through 2016. From 2011 to 2014, Trapani was chairman and ceo of LVMH Moet Hennessy Louis Vuitton’s Watches and Jewelry division. Before that, he was ceo at Bulgari. He has over three decades of experience in the luxury retail sector, having been at Bulgari from 1984 until 2011. During his tenure there, he took the company public and created Bulgari Hotels & Resorts.