French jeweler Cartier whose customers have included the tsar of Russia and actress Elizabeth Taylor, says it’s pulling ahead of luxury rivals with watches that match the tenor of the times for less ostentatious displays of wealth.
Cartier is gaining "a lot" of market share, in part because the economic slowdown is steering consumers toward more discreet timepieces such as the brand’s best-selling Ballon Bleu collection, Chief Executive Officer Bernard Fornas said in an interview in Geneva. He declined to estimate how much share the Paris-based unit of Richemont Group may capture.
"Bigger watches are losing a bit of ground today," he said. "When you are in crisis periods you show off less and you have shapes that are more discreet and more ergonomic. The feel- guilty factor is very important."
Cartier is ensuring it maintains geographical reach and is also benefiting from growth in the branded jewelry market, Fornas said. The luxury icon may open 20 to 30 boutiques this year, many of them in Asia, Europe and South America, adding to a network of 310 outlets. The company is expanding development of its own movements, or the motors inside watches.
Richemont doesn’t disclose the brand’s sales, though the whole jewelry business, which also includes Van Cleef & Arpels, had revenue of 3.48 billion euros ($4.47 billion) in the last fiscal year. Overall sales rose 24 percent to 2.62 billion euros in the third quarter ended Dec. 31, fueled by demand for watches in China, the company said today.
Cartier’s revenue may grow 25 percent in the fiscal year ending in March, compared with 20 percent for the group, according to Weber. About 45 percent of the brand’s sales may come from watches, 35 percent from jewelry and the rest from accessories, he said.
At this week’s SIHH watch fair in Geneva, Cartier will show complicated timepieces and watches decorated with jewels. It also will introduce the Tank Anglaise, adding a model to a range first sold in 1919. The watch, available in three colors of gold as well as a gold and steel version, will be Cartier’s biggest introduction since the Ballon Bleu, according to Fornas.
Ballon Bleu watches first reached the market in 2007 and are characterized by round cases and a crown set with a sapphire. Prices of standard models start at less than 10,000 euros, while diamond-encrusted or complicated versions can retail for hundreds of thousands of euros.
“We will launch the Tank Anglaise, as the latest addition to the house collection that already includes the Tank Française and Tank Américaine,” Mr. Fornas said. In addition, the company plans to introduce the Rotonde de Cartier Minute Repeater Flying Tourbillon, its first minute repeater and a model developed completely in-house.
Cartier is also reinforcing its heritage by introducing a women’s model, Promenade of a Panther, using the company’s iconic big cat imagery. Here, a diamond-encrusted feline prowls around a dial made in mother of pearl.
Demonstrating its prowess for transparency, Cartier is also offering the Grande Complication Skeleton pocket watch, an update of a classic inspired by the company’s pocket watches of the 1930s. This new version adds a modern edge with a large diameter of 59 millimeters, or 2.3 inches, a tourbillon, perpetual calendar and monopusher chronograph.
Fornas said he doesn’t want Cartier "to be slowed down in Asia because of a lack of movements in the future, so let’s prepare the ground and invest on a regular basis." The watchmaker unveiled its first movement designed in-house in 2009, according to Weber. Cartier has production facilities in Geneva and La Chaux- de-Fonds, the heart of Switzerland’s watchmaking industry, and is planning to construct a new plant in Neuchatel.The shift toward mechanical watches is in line with changing consumer tastes as the use of quartz-powered movements in luxury timepieces wanes, he said.
"People are more demanding on quality, performance and design, and we have moved quicker than the market," Fornas said. While it’s difficult to predict how the industry will fare in 2012, Cartier will benefit whatever happens, Fornas said. "If things go bad, people go to the legitimate brands, to the authentic brands and not to fashion fads," he said.
Cartier is the "clear leader" in jewelry and No. 2 in exclusive watchmaking after Switzerland’s Rolex, according to Fornas.
The company is well-positioned to deal with troughs in the luxury-goods industry because it hasn’t diluted the brand and expanded into areas outside jewelry and watches, Fornas said.
adapted from Bloomberg
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