Over the course of its more than 150-year existence, Cartier has survived its share of market gyrations—two world wars and the Great Depression among them—on the strength of its management and stylistic bravado.
Even if today’s financial crisis is posing problems for luxury companies around the world as spending wanes and questions are raised about long-term effects on the consumer psyche, Cartier is facing the situation with confidence.
That’s because of a multipart strategy its president, Bernard Fornas, has been implementing over the last eight years, which is based on the brand’s famed creativity and international expansion.
That’s not to say the company hasn’t felt the pinch of the market vise. Cartier already has cut the hours of workers to halftime in one of its Swiss production plants that makes watch bracelets. It also has eliminated a number of part-time jobs to deal with declines in some markets.
Nonetheless, Fornas believes the moves to streamline supply chains, to build Cartier’s presence in emerging economies and to ramp up creativity are going to guide the firm through any present hardship and help it emerge stronger when the cycle turns propitious again.
“We are now dominant in new emerging markets,” Fornas explains in an interview at his art-filled office at Cartier’s headquarters in Paris.
“We are strong in China, we are strong in the Middle East and we are strong in Russia. We are also strong in former communist countries including Ukraine, Georgia and Kazakhstan.
“What is happening today validates the strategic decisions we made,” Fornas continues. “It is these countries that are growing — faster than the mature markets — and offsetting tough business elsewhere.”
Today, Cartier has five arms: Europe, Japan, Asia, America and Russia. “We can compete when I have those tools,” Fornas says.
Fornas offers as an example the difficult environment in the U.S. and Japan. “It’s tough there, but it hasn’t worsened so far this year,” he says. “We are a sailboat that’s used to storms.”
According to financial sources, Cartier’s sales are about 2 billion euros, or ($2.65 billion at current exchange, which is 38 percent of overall group sales for Compagnie Financière Richemont SA. Cartier’s earnings before interest and taxes are estimated at about 600 million euros, or $794 million, 55 percent of the group’s EBIT.
Presently, Cartier has eased up on boutique openings and other related projects in slower markets in order to allocate resources to potentially more robust locales. Store openings will continue in China. Out of as many as 12 shops earmarked for this year, eight are expected to be in China, which currently has 30 Cartier boutiques.
“It is in the good times that you need to be ready for the worst,” says Fornas. “We’ve had several outstanding years. But when things get bad, you don’t have the time or money to adjust. Today, we are happy about the capital expenditures we’ve made.”
“China will be our biggest market in 2011, passing Japan,” he adds, shrugging off concerns the country may have its own economic problems linked to the recession.
“Mainland China is a little like Japan was 20 years ago,” he says. “You can’t forget that the distribution of world wealth is changing and that China is growing fast.”
Cartier is catering to its Chinese clientele to such an extent that it has Chinese-speaking sales associates in the majority of its boutiques around the world in order to accommodate tourists from that country. “They travel a lot — not only to Hong Kong, but to Europe as well,” says Fornas.
Russia, including former satellite communist countries, and the Middle East are other markets that are helping Cartier buck slower business in the U.S. and Europe. “We haven’t seen a slowdown in Russia or the Middle East,” says Fornas, who was on his way to Dubai to host an event with Italian actress Monica Bellucci for a store opening.
Opening more stores in emerging markets is only one component of Fornas’ strategy for the firm. Since he took the helm, Cartier has concentrated on its core businesses of watches and jewelry by accelerating the creative cycles and hiring more artisans to work on its most expensive and spectacular products.
Fornas says the average price of the most expensive items has risen by more than 10 percent over the last few years, as the market demands more extraordinary pieces. Illustrating the company’s creative brawn, more high jewelry pieces than ever have been coming out of Cartier’s Paris ateliers.
For the Biennale des Antiquaires in Paris in the fall, for example, about 120 pieces were displayed, with the majority of them, particularly the most remarkable, finding buyers.
Fornas says business for high jewelry has not slowed. “Today, what we’re seeing is demand at the very high end or at the entry level. Made-to-order is also still very strong.”
Fornas notes Cartier does “hundreds of made-to-order pieces each year. And not small things. We are capable of making anything. After all, real luxury is the art of being unique. And even if bespoke is more niche, it’s an important part of our overall business.”
The executive says his concentration on building the highest end of the jewelry business is part of his way of reinforcing Cartier’s DNA. “We are the king of jewelers,” he said. “There is no question about that.”
Parallel to the jewelry has been a vast effort to build the important watch business. In that segment, too, Cartier has been moving more upmarket, creating more complicated pieces and opening an atelier in Geneva to work on its most extraordinary models. The latter has given Cartier the right to use the prestigious Geneva hallmark, coveted by collectors and a proof of the highest quality in horology.
Cartier introduced its first watches bearing the Geneva hallmark at the watch fair in that Swiss city in January to wide acclaim. Fornas says the strategy at Cartier would be to continue to move upmarket with its watches and invest in production capacity in Switzerland in that segment.
Cartier’s creativity blitz over the last few years has raised logistical issues. Fornas reports 25 to 30 percent of the product assortment comprises new products every year. That has created inventory issues at the jeweler. “You need to be very sophisticated with the management of the stock when you have this situation,” says Fornas.
To achieve this, Cartier has invested heavily in logistics and back-office functions in recent years. A replenishment system for all of the brand’s 300-plus shops around the world has been put in place. “It was a huge task,” Fornas says.
EXCLUSIVE: @tomford is opening its first-ever beauty store. The boutique, which opens November 20 in London’s Covent Gardens, was designed with the over-the-top glam Ford is known for. Read the full story on WWD.com, link in bio. #wwdbeauty #wwdnews (📷: Simon Wagner) #TomFordBeauty
New York-based DJ @harleyvnewton threw a party to celebrate the holiday collection of her dress and pajama line @hvn at the Ladurée Beverly Hills. It Girls @katebosworth, @rashidajones and more joined in on the fun, which included cocktails, croque monsieur sandwiches and a photo booth. #wwdfashion (📷: Owen Kolasinski/BFA.com)
For the holidays, @Burberry partnered with 20-year-old artist @blondeymccoy on a series of three outdoor murals in downtown Manhattan. The murals are McCoy’s interpretation of a Christmas eve party, the idea of charity and the spirit of family. His third mural, pictured here, is the most personal. The image depicts McCoy’s grandparents and father in London’s Trafalgar Square in the Seventies. “My work often features lots of sentimental objects.” #wwdeye
For spring 2018, designers applied bold colors and cartoonish motifs on everything from sneakers and belts to key chains. See all the top men’s accessories trends on WWD.com. #wwdtrends (📷: George Chinsee; Prop Styling by @rnasti; Market Editor: @luiscampuzano)
The @dior-sponsored @guggenheim international gala pre-party has a history of drawing cool-girl musical acts to serenade the crowd –– and last night was no exception. @haimtheband performed songs both new and old, and lured a star-studded audience with the likes of Rebecca Hall, Kate Mara, Mamoudou Athie and more. #wwdeye (📷: @lexieblacklock)
In a partnership between the @metopera and the @englishnationalopera, “Marnie” was born. The opera, with costumes sponsored by @mrporterlive, is an adaptation of the 1961 thriller by Winston Graham. Arianne Phillips, who created the costumes, is no rookie: She’s styled Madonna for her tours and created costumes for a myriad of films in the past. Read WWD’s interview with Phillips, where she talks about her inspiration for the opera’s costumes on WWD.com #wwdfashion
@barneysnyc took a different approach to their holiday windows this year. Instead of Christmas decor, Barneys tapped @thehaasbrothers to tell a story of positivity, gratitude and inclusivity via heartwarming silliness and humor. “It’s about kids and it’s about coming together and being family and loving each other,” said Simon Haas. #wwdfashion (📷: @joshuascottphoto)
Beauty influencer @kandeejohnson makes her foray into hair care with a collaboration with @ogx_beauty — making it the first time that OGX has teamed up for a product creation. The collab includes shampoos and conditioners in three scents. At 39 and a mom, Johnson is a different profile than the emerging social media stars, but is considered one of the pioneers of the digital beauty influencer world. Read WWD’s interview with her on wwd.com, including the strangest beauty product she’s ever tried #wwdbeauty