We noticed you're blocking ads.

Keep supporting great journalism by turning off your ad blocker.

Questions about why you are seeing this? Contact us

Font Size

- Aa +

Tue 18 Jan 2011 10:02 AM

Font Size

- Aa +

Luxury jeweller Cartier eyes Middle East to offset China slowdown

Brand to add more stores in the Middle East, US and Europe to diversify its risk to China market

Luxury jeweller Cartier eyes Middle East to offset China slowdown
Cartier is to add more stores in the Middle East, US and Europe to offset its risk

Cartier, the jewellery maker whose clients have included the UK royal family and Russian Tsar Nicholas II, is accelerating boutique openings in the Middle East and the US to be prepared if the Chinese market slows down.

The jeweller is adding more shops in the Middle East, Europe and the US to diversify its risk, said Bernard Fornas, chief executive officer of the brand, a unit of Cie Financiere Richemont. He declined to give numbers for openings.

“You have to prepare yourself for the worst when everything is going well,” he said in an interview at the Geneva watch fair. “Let’s be careful about overdependence.”

Richemont said sales in the three months through December rose 33 percent, led by a 57 percent jump in the Asia-Pacific region.

Cartier will continue adding boutiques in China, where it has about 37 shops, as the country is “so big and so rich” it still has a “lot of potential,” Fornas said. Cartier is also preparing itself for a possible slowdown there, the executive said, without making any predictions on Chinese demand.

“There are always risks everywhere,” he said. “You cannot control the risk, because the risk comes one morning. It can be a disease, it can be a revolution.”

Cartier probably gets about a quarter of its sales from China, Jon Cox, an analyst at Kepler Capital Markets, said by email.

“While there might be a temporary slowdown, it will be more a deceleration from high levels, and I don’t see it going backwards,” he said.

Swiss watch sales in China will probably increase 20 percent to 25 percent this year, slowing from more than 30 percent in 2010, said Rene Weber, an analyst at Bank Vontobel.

Cartier is expanding in the Mideast to benefit from oil wealth as the price of crude trades above $90 a barrel, Fornas said. The brand is also opening larger and better-located shops in Europe and adding stores in the US.

“The US has been slow to take off, but it will come back, I’m sure. They are not dead,” the CEO said. “So let’s be prepared to grasp the potential of all these regions.”

Richemont gets about half its sales from its jewellery unit, which includes Cartier and Van Cleef & Arpels. The jewellery unit’s sales rose 30 percent in the quarter through December.

Fornas, born in 1947, became head of Cartier in 2002 after leading Richemont’s Baume & Mercier brand and following a career that spanned companies from Procter & Gamble to the International Gold Corp and perfume-maker Guerlain.

Cartier’s dates back to 1847, when Louis-Francois Cartier took over the jewellery workshop where he was an apprentice at age 29.

Arabian Business digital magazine: read the latest edition online

For all the latest retail news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.