Cartier looks to wealth that whispers

Cartier, the jeweller 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 Cie. Financiere Richemont 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.

“Cartier’s advantage is that it’s not just a jewelry company and, if you were to do a breakout of sales, watches are more important,” said Rene Weber, an analyst at Bank Vontobel in Zurich.

He estimates the brand is responsible for almost half of Richemont’s sales and about 70 percent of earnings before interest and taxes.

Richemont doesn’t disclose the brand’s sales, though the whole jewelry business, which also includes Van Cleef & Arpels, had revenue of €3.48bn ($4.41bn) in the last fiscal year.

Overall sales rose 24 percent to €2.62bn in the third quarter ended Dec 31, fuelled by demand for watches in China, the company said.

Revenue beat the €2.54bn average estimate of 13 analysts surveyed by Bloomberg.

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 jewellery 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, while diamond-encrusted or complicated versions can retail for hundreds of thousands of euros.

Cartier dates to 1847, when Louis-Francois Cartier took over the jewellery workshop where he was an apprentice. The company became one of the first to make a wristwatch, with a piece made in 1904 for Brazilian aviator Alberto Santos-Dumont.

Fornas took over as CEO in 2002 after heading Richemont’s Baume & Mercier watch brand and following a career that included posts at Procter & Gamble Co. and perfume-maker Guerlain.

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