Lack of innovation has been a problem and Vigneron, who replaces Stanislas de Quercize, a 25-year Richemont group veteran who stepped down last month, will need to focus on this. You could argue Cartier has not been the strongest innovator in recent years,” he said. Additionally, Cartier is suffering from the step back in the Chinese watch market / gifting practices. “Cartier is facing a relatively subdued luxury market, as the bulk of the other mega-brands. Last month’s terrorist attacks in Paris are also expected to further dent tourists’ travels to Europe to buy luxury goods during the pre-Christmas period which, for some brands, represent up to a quarter of annual sales.īut for Cartier, whose sparkling creations adorned royal heads around the globe in the early 20th century and more recently Kate Middleton’s at her wedding to Prince William, the challenges are bigger than for most.Įxane BNP Paribas analyst Luca Solca said Cartier is particularly exposed to China. The strong franc has made Swiss exports more expensive while Tiffany & Co forecast a bigger fall in full-year profit than previously expected as a strong dollar kept tourists from spending in its showpiece U.S. Richemont also highlighted difficulties in Macau where the casino industry is suffering from the crackdown on corruption, the weak yuan and Chinese government restrictions on travel. This is partly due to the government’s crackdown on the tradition of gifts-for-favours which often involved watches. Some analysts estimate that the high-end watch market in mainland China is down 60 percent since its 2012 peak. Cartier said last year it introduced shorter working hours for some employees and would not say if the measure was still in place. NO MORE CHINESE GIFTSīut he noted the subdued Asian market was causing problems for some companies and a few had laid off staff. Exports are down a bit, but probably still above 20 billion Swiss francs for the whole year,” he said.
“There is no real crisis in the Swiss watch industry today. Pierluigi Fedele, who is responsible for watchmaking at the Swiss union Unia, downplayed any talk of a crisis. Watch exports from Switzerland, where Cartier and other watches are made, fell 3.2 percent during the first ten months of 2015 with shipments to Hong Kong down 22.7 percent and rising just 0.1 percent to the United States. Swatch Group shares have fallen 18 percent, partly due to competition from smartwatches and the drop in demand from China. Rolex is privately owned and at LVMH, watch and jewellery sales rose 10 percent during the first nine months but it does not give a separate watch figure. Shares have fallen over 12 percent this year.Ĭomparisons with competitors are hard to make.
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It had already stated a similar decline for Cartier watches in the full year to March. Richemont said last month that watch sales were down mid-single digits in the six months to September, dragged down by its biggest markets, Hong Kong and the United States. “For men, first time luxury watch buyer will choose to buy Rolex, which is practical and good looking.”Ĭartier and Richemont declined to comment on the brand’s strategy to improve watch sales. Consumers will regard it as a piece of jewellery when they hear the brand, it is particularly popular among ladies,” said Lam Tung-hing, general manager of the Hong Kong retail operations of Oriental Watch Holdings Ltd.
“Cartier is popular among fashion-focused customers in Hong Kong. Improving Cartier’s image as a watchmaker in China, where wealthy women love its red boxes but men prefer pure watch brands such as Rolex, Patek Philippe or Vacheron Constantin, may be top of his to-do list. But some of Cartier’s problems are specific to the brand, setting up a challenge for Cyrille Vigneron when he takes over the leadership next month.
Like other high-end watchmakers Cartier is suffering from a drop in demand in big markets such as Hong Kong, mainland China, Russia and the United States.
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