March 9, 2012

Richemont 2012: Cartier Kingdom On Fire

Cartier is on fire!

The group's Richemont (CFR) share price increased higher than LVMH in January and February, and sales rose 24% to 2.62 billion euros in the third quarter ended Dec 21. Its revenue is also predicted to grow more than 20% in the fiscal year ending in March 2012, according to a Zurich analyst.

Cartier is a brand owned by Richemont, and it is estimated to contribute almost half of Richemont's sales and approximately 70% of gross earnings. The brand itself is also predicted to have a 25% sales increase by March, 5% higher than the group's overall increase.

Cartier is currently positioned as the global market leader in jewellery-making industry, and its luxury watch line is ranked second after Rolex. The CEO, Bernard Fornas, said that the company is well-positioned to deal with rough economic situation because it hasn't diluted the brand and the focus is still the same: jewellery and watches manufacturing. Specializing the business makes a great safeguard against recession, evident in many luxury goods manufacturer and high fashion businesses that keep soaring high against all odds.

Last January, the luxury icon just introduced the new collection Tank Anglaise, and they will open 20 to 30 new boutiques across the Asia, Europe, and South America regions. Currently, they already have 310 outlets all over the world, and the executives still foresee a higher growth in the near future. They're really on fire.

Cartier Tank Anglaise

The CEO said that the economic slowdown has steered consumers toward more discreet timepieces such as the Ballon Bleu collection, the brand's best selling series. Customer tastes have also shifted toward mechanical watches, instead of quartz-powered movements.

Cartier Ballon Bleu

"Bigger watches are losing a bit of ground today," said Mr Fornas. "When you are in crisis periods you show off less and you have shapes that are more discreet and more ergonomic." Reading this, I'm instant reminded of a good friend of mine, an avid watch lover, who kept on promoting how great and how awesome a big watch is nowadays. He even brought names like Cameron Diaz, spotted her wearing big oversized watch in movies. Lol.

So in recession, we know that global taste tends to come down to the basic. The simple, classic, timeless design that surpasses any fashion trend in any era. This isn't just a commoner's opinion though, the Cartier CEO Bernard Fornas said so himself. And it's also true that LVMH and Hermes both gained significant revenue increase during the economy slump.

What does it imply? Invest your financial resources wisely. Follow the trend if you want, but always spare the most important space for timeless key items. Bags, watches, shoes, wearable clothes, pick them all wisely. Only God knows when the next global recession will reappear.

You can read similar news about luxury goods stability during recession here.

Sourced from Bloomberg. Images from various sources.