Nearly a year after the landmark deal that would been one of the largest ever in the luxury sector, LVMH has backed out of acquiring Tiffany & Co. citing a request from the French government to delay the closing, as well as the impact of the global Covid-19 pandemic. As a result, the American jeweler has sued LVMH in attempt to force the deal through.

The unraveling of this agreement has reportedly two outcomes for the famous jewelry house: the upcoming legal battle could ultimately result in the deal being honored, though at a discounted price, or Tiffany could resume its search for a buyer.

Yesterday, LVMH released a statement of explanation, elaborating that the deal could not be completed "as it stands," because the French government had asked them to delay the deal past January 6 due to the threat of tariffs on French goods imported into the United States.

After months of rumors, it was confirmed in November 2019 that luxury giant LVMH would acquire Tiffany & Co., the storied American jewelry company, for $16.2 billion dollars. The deal would have been the largest ever in the luxury sector, according to The New York Times.

To celebrate the deal, LVMH turned its homepage Tiffany blue . “We are delighted to have the opportunity to welcome Tiffany, a company with an unparalleled heritage and unique position in the global jewelry world, to the LVMH family," said Chairman and Chief Executive Bernard Arnault in a statement. "We have an immense respect and admiration for Tiffany and intend to develop this jewel with the same dedication and commitment that we have applied to each and every one of our Maisons. We will be proud to have Tiffany sit alongside our iconic brands and look forward to ensuring that Tiffany continues to thrive for centuries to come.”

Audrey Hepburn In 'Breakfast At Tiffany's'
Archive Photos//Getty Images
Henry B. Platt, great-grandson of the founder of Tiffany's, adjusts Audrey Hepburn's necklace for a scene in Breakfast at Tiffany's in 1961.

Moët Hennessy Louis Vuitton is Europe's second most valuable company, and home to 75 brands, including fashion giants such as Dior, Givenchy, and Fendi, among others, along with wine and spirits brands like Dom Pérignon, Krug, and more—all names synonymous with affluence and tasteful opulence. Tiffany was not the company's first foray into jewelry—it owns Bulgari and Tag Heuer, among others—but this was by far its most ambitious acquisition in that sector. At the time, jewelry and watch sales made up only nine percent of LVMH's total revenue.

Should the deal go through, with Tiffany, LVMH will not only acquire a company with 151 years of history in iconic designs, but a modern behemoth, with a 5th avenue flagship that's a cultural icon (thanks to Breakfast at Tiffany's) and 300 stores world wide. Few brands have packaging synonymous with receiving a treasure, but everybody knows that special things come in a "little blue box."

Despite its profile—and size—Tiffany had been finding independence increasingly difficult, according to industry insiders. Its ubiquity and accessibility working against it in an era when pleasing a millennial audience is a tricky business.

Tiffany & Co. Paper Flowers Event And Believe In Dreams Campaign Launch
Nicholas Hunt//Getty Images
Actress Elle Fanning was a part of Tiffany’s 2018 marketing push. The company has worked hard in recent years to reach a younger consumer, but sales have slumped.

The tectonic plates of retail also continue to shift and sales had been down for the company in North America. "Tiffany needs help on marketing and improving the retail experience," wrote Business of Fashion's Lauren Sherman on Twitter. "The North American consumer is bored with the brand because a solitary diamond is no longer the dream."

The New York Times reported though, that by May of this year, senior management at LVMH had cut off discussions with Tiffany personnel. This culminated in Tiffany suing because LVMH had not yet filed for anti-trust approval with the EU.

LVMH's deep pockets—and talent for dusting off legacy luxury brands—were the hope that could Tiffany a bit of an edge to go along with its extraordinary history. If the deal does dissolve, the iconic jewelry brand faces an uncertain future.

Headshot of Elizabeth Angell
Elizabeth Angell
Digital Director

Elizabeth Angell is the Executive Editor, Digital for Town & Country, where she writes about the British Royal Family, the Kennedys, Ivy League shenanigans, superstars of interior design, and trends in style, beauty, and home.