Cartier's watches lose their sparkle in China
By Silke Koltrowitz and Donny Kwok
ZURICH/HONG KONG (Reuters) - The gold and diamonds of Cartier jewelry are so popular with women that the brand founded in Paris in 1847 is finding it difficult to market watches to men.
The world's biggest jewelry and watch brand in terms of combined sales generates more than two thirds of profits for Swiss parent Richemont, but watch revenues have dwindled relentlessly while jewelry sales have boomed.
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. 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.
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.
"Cartier is popular among fashion-focused customers in Hong Kong. Consumers will regard it as a piece of jewelry 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.
"For men, first time luxury watch buyer will choose to buy Rolex, which is practical and good looking."
Cartier and Richemont declined to comment on the brand's strategy to improve watch sales.
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. It had already stated a similar decline for Cartier watches in the full year to March. Shares have fallen over 12 percent this year. Continued...