BUSINESS BRIEFING: Cartier at the cutting edge

Marie-Ange Casta and President and CEO Cartier International Cyrille Vigneron attend Cartier Garage Cocktail Party during Milan Design Week in Milan, Italy. (Photo by Vittorio Zunino Celotto/Getty Images for Cartier)

Cyrille Vigneron officially took the reins as CEO of Cartier on January 1, 2016. Just over two years on, he is regarded as one of a new generation of leaders at parent group Richemont that is bringing fresh ideas and momentum to the group’s venerable maisons. At SIHH this year, the two key launches were throwbacks to the past, with reissues of De Santos and Panthère models, but Mr Vigneron has his sights firmly set on the future with fast-evolving plans on how to communicate with and sell to today’s customers.

Global distribution for Cartier was in a mess three years ago. The dramatic rise in demand from Chinese customers came hit the buffers when the ruling communist party introduced rules that stopped high value gifts like watches and jewellery being used to grease the wheels of business negotiations. Conspicuous consumption, the leaders argued, was not in line with the country’s values.

Richemont had invested as if its graph for sales would continue rising forever, and needed its own boutiques and retail partners throughout Asia, but particularly in Hong Kong, to keep buying stock. When the party ended, the group was left with a channel stuffed with watches that it could not sell to its usual customers.

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In an only partially successful attempt to stop grey market dumping of that stock across the world, Richemont agreed to buy it back; destroying some models that were unlikely to sell, recycling others, and reassigning some to channels in other parts of the world.

Mr Vigneron believes that Cartier acted correctly at the time, and is now benefiting from far better alignment between supply and demand around the world. “Two years ago we launched a program to buy back massive amounts of retailer inventory. We also scaled back our position to ensure acceptable stock levels, and we now have proper, healthy levels in all our markets. We’ve also adjusted our capacities,” he says in an interview recorded at January’s SIHH.

The Asian crisis also prompted Richemont to look more closely at the way it works at a corporate level with different maisons speaking to each other and cooperating more.

“Synergies have been made across the Richemont group to ensure we have the right balance, both for general capacity and for the different forms of expertise. We now have a tool that corresponds to what we do and are back in a growth phase,” Mr Vigneron explains.

The way Cartier speaks and sells to its customers is also evolving, with greater concentration of retail points of sale in the world’s most prosperous cities. “We’re seeing a slight concentration of our boutiques because the luxury clientele in general is, to a certain extent, based in large, cosmopolitan cities. What’s true for our own boutiques is true for our distribution too. We’re globally satisfied, although there has been a certain amount of recomposing,” he describes.

Recent acquisitions, such as Aurum Holdings buying Mayors in Florida, and Bucherer buying The Watch Gallery in the UK and Tourneau in the United States, are also leading to greater clustering, Mr Vigneron suggests.

“Distribution is actually becoming more concentrated by itself. Partners are buying each other out. The number of points of sale will probably decrease as the market becomes naturally more concentrated,” he believes.

All retailers, owned by Cartier or otherwise, will need to get used to an era when customers browse, research and shop online. Younger customers aren’t just affecting future plans for Mr Vigneron, they have shaped the present tactics.

“There’s a tendency to think of millennials as the next generation when they’re already here,” he says. “Cartier makes 43% of its sales to under-35s. In Asia, it’s more than half. The question being how to talk to them. This means digital, Whatsapp, WeChat and Line. It means advertising but events too. New generations live more in the present and are quick to respond to the things they see and feel. Long, overwrought messages don’t appeal to them. There are one billion WeChat users! We need to be using a new vocabulary that suits this type of media and conversations with their emojis and photos and little hearts, but continue to respect our clients at the same time.”

At SIHH, Cartier’s most commercial launch was an extensive range of Santos models for men. The Santos name dates back to one of the world’s first wristwatches, which was designed by Louis Cartier in the early 20th century for his friend Alberto Santos-Dumont, a fearless Brazilian airman and inventor.

 

 

The 2018 family is bang up-to-date with its 1847 MC automatic calibre using anti-magnetic nickel phosphorus components in the escapement and movement mechanisms, as well as a shield made from a paramagnetic alloy to prevent interference from magnetic fields.

In an era of pocket watches, a leather wristwatch strap was revolutionary on the first Santos in 1904, and Cartier says it has brought the same spirit of innovation to a large range of 17 coloured leather straps and metal bracelets for this year’s collection that can be swapped over in seconds.

The watch, which will hit stores in April, sticks closely to historic designs. Its square case with rounded corners and lugs that sweep into the strap are familiar, as are the eight screws on the bezel and the Roman numeral hours behind Cartier blue hands.

The commercial appeal comes from the depth of the family and its affordability. There are medium and larger sized versions starting at €5000 for an all-steel model; €7300 for a gold and steel edition and €32.000 for an all-gold piece.

It was an interesting choice of watch for Cartier to headline with, because the company is very much a jeweler with watches rather than a watchmaker that makes jewelry and appeals largely to a female customer base. “Cartier is both a jeweler and a watchmaker. As a jeweler, we naturally cater to a female clientele,” he admits. “For the past two years, we’ve chosen to concentrate on elegant form watches, mainly for women though without excluding well-proportioned form watches for men.”

Cartier’s great strength as a brand has been leveraging its reputation for fine jewellery, and encouraging customers to think of watches in the same way — more another piece of jewellery than a marvel of micro-engineering. This has allowed it to charge similar premium prices to Switzerland’s advanced mechanical watchmakers without competing too hard in their territory of grand complications.

“When you’re known for something in particular, moving out of that area isn’t easy, even when it involves beautiful objects. A Fine Watch must have a powerful, recognizable design, and technique must serve that design. In that respect, we have slightly scaled back certain types of development, rather than aim for pure performance for essentially technical ends. Precision timekeeping through complications is a highly intellectual pursuit. We take a more organic, more poetic vision. This year, our complications are more transparent, more mysterious, but they are still there. They haven’t slipped into the background, they’re mysterious, that’s all,” Mr Vigneron describes.

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