Richemont to Increase Cartier Watch Factory Production
Move by Maker of Jewelry and Watches Seen as Positive Signal for Industry
Jewelry and watchmaker Cartier, the largest division of luxury firm Financière Richemont SA, is sending at least one positive signal for a Swiss watch industry facing turbulent times: It plans to ramp up production at its Fribourg-based factory. Cartier had cut production at the Fribourg factory last November by limiting its 200 workers to two days a week, thanks to weakening demand in China. Now, Cartier Chief Executive Stanislas de Quercize says the facility will resume full production, amid high hopes for a new range of watches.
“We will have full production in the spring”, Mr. de Quercize said during a recent interview at the Salon International de la Haute Horlogerie, a high-end watch show in Geneva. Cartier, which found fame as a maker of jewelry for European and Hollywood royalty, is critical to Richemont, the world’s second largest luxury company by revenue after LVMH Group. Cartier contributed roughly €4.8 billion of Richemont’s sales in the year ended in March 2014, or just under half of the parent company’s total during the period, according to analyst estimates.
Watches make up around 48% of Cartier’s sales, but have lately lagged behind jewelry sales, which account for around 40% of the brand’s revenues. Watch sales in China, a crucial market for Cartier, have come under pressure thanks to a government crackdown on extravagant gift giving. Many retailers in the country have responded by reducing their orders for luxury timepieces. Another challenge for Swiss watchmakers has been presented by Switzerland’s abandoning of a cap on the Swiss franc, a policy shift undertaken by the Swiss National Bank last month that has sent the value of the currency soaring relative to the euro.
But Mr. de Quercize, who took over as CEO in January 2013, says he has high hopes for Cartier’s forthcoming range of watches, ‘Clé de Cartier’, which will go on sale April 1. The range has models for men and women and price tags that run from €13,000 to €140,000. “This is aimed at non-Cartier clients for their first Cartier watch, and for Cartier aficionados who want to add pieces to their collection”, said Mr. de Quercize. Cartier plans to try to deal with the surging franc in part by raising prices in the eurozone by 5%, Mr. de Quercize said, and the brand is banking on the popularity of ‘Clé de Cartier’.