August, 1984, was a busy time on many fronts.
Asprey was doing well, despite the periodic falling out between family members, and John Asprey and I were still on the lookout for opportunities to expand our customer base.
It so happened that Avon Products, who owned Tiffany in New York, had made an announcement in June about their willingness to dispose of their subsidiary at the asking price of a hundred and sixty million dollars. Three investor groups had put in bids ranging between a hundred million and a hundred and forty million dollars, so falling short of the price tag.
We did not have the resources to enter the arena, but were nevertheless confident that, at the right price, we would have no difficulty in heading a consortium with sufficient funds to qualify us as a serious potential buyer. The name of Asprey was second to none in the luxury world and our progress with building the company into a successful concern during the past few years gave us a certain standing and credibility among our peers – enough to enable us to make the provisional enquiries needed.
The task fell to me to examine the business, with a view to reaching a conclusion as to its viability in commercial terms. Avon Products were highly cooperative. They were keen to shed the subsidiary as quickly as possible and arranged for me to meet the Tiffany management on many occasions.
The trouble was that the figures did not add up. They were overstocked and their sales were in decline despite a programme of expansion through the opening of many outlets in recent years. Even so, the Tiffany name still had its magic, despite their focus on the corporate gift market which had become their bread and butter and to some degree had lost them the special cachet they used to have. There was every chance that the glorious past could be revived with a new management intent on restoring the principle of exclusivity.
At the time of their artistic supremacy in their splendid époque in the 1920s and 1930s, their name and product were cherished by connoisseurs the world over for desirability and craftsmanship. Proof of that statement lies in the prices being fetched today for Tiffany objects from that period. In the event of a successful bid for the company, my strategy would have been to shut down most of the peripheral, insignificant outlets it had recently established and forget about competing in a glorified mass-market. Then we would see Tiffany become again the cathedral of quality on Fifth Avenue to which the rich and successful had once flocked to pay homage.
Perhaps I was carried away by memories of the film of Truman Capote’s book, Breakfast at Tiffany’s, starring Audrey Hepburn. Ever since seeing the movie I had dreamed of being part of that milieu where fairy tale combined with vast reservoirs of wealth – the gateway to paradise.
It was a dream I almost accomplished. The New York Times, in reporting Asprey’s interest, quoted me as echoing certain other American retailers, intrigued by Tiffany’s potential, when I said I found the asking price ‘outrageous’. I had in fact done my homework. Over six weeks I took to spending five days alternately in London and New York, trying to arrive at a sensible deal. I even hired a private jet to take me to visit Walter Hoving, who was on vacation in Newport. Mr Hoving, a legendary figure as a former chairman of Tiffany and a large investor before the sale to Avon, gave me valuable information. If Avon could get a hundred and fifty million for Tiffany, then, he said, they ought to grab it. This indicated to me that my own assessment of the value of the business was correct.
The story the figures told was that Tiffany could not be worth more than a hundred million dollars by any stretch of the imagination. However, I was prepared to live with the figure of a hundred and fifty million, provided no more than seventy million was in cash.
Negotiations reached the point when I felt we were almost there. Then, at the eleventh hour, an investment company based in Bahrain upped the stakes and promptly concluded the purchase. Many analysts believed the price they paid was far too high, but when they sold the business many years later, they showed a healthy profit.
Had our concern for prudence been too strict for our own good? The wisdom of hindsight returns us only to the realm of dreams of what might have been.