H I G H J E W E L R Y F O R T H E M I L L E N N I A L G E N E R AT I O N
S E N I O R C A PS TO N E P R OJ E CT
CAROLINE LOWE FASM 430 . PROFESSIONAL PORTFOLIO PRACTICES PROFESSOR PATTI CAPALLI TAYLOR SAVANNAH COLLEGE OF ART & DESIGN FALL 2016
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TA B L E O F C O N T E N T S
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I. INTRODUCTION
IV. CUSTOMER ANALYSIS
07 Mission Statement
52 Demographics & Psychographics
08 Project Introduction
53 Customer Profiles
II. COMPANY OVERVIEW
V. STRATEGIC PLAN
12 History
56 Goals
22 Timeline
57 Implementation Strategies
26 Heritage
VI. CONCLUSION
28 Size and Scope
34 Corporate Ownership
III. MARKET ANALYSIS
46 Competitors
48 SWOT Analysis
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I. INTRODUCTION
MISSION STATEMENT
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PROJECT INTRODUCTION
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M I S S I O N S TAT E M E N T To develop a strategic plan for Cartier to utilize existing assets to build on the brand’s relationship with millennials in order to cement a strong customer base to weather economic turbulence in the luxury industry.
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PROJECT INTRODUCTION
In 1917, Pierre Cartier paid $100 cash and a double-strand pearl necklace to yachtsman and financier Commodore Morton F. Plant for the tycoon’s Italian Renaissance-style Fifth Avenue mansion. Architect William Welles Bosworth converted the house into a grand, gilded-age monument to commercialism and it opened as the new New York retail location of the French jeweler. This October, the iconic limestone mansion on Fifth Avenue and 52nd Street reopens after a two-year renovation. The glamorous new store will pay tribute to Cartier’s storied history while bringing the brand’s shopping experience into the future with an iPhone and Android app, iPads for customer service, and free WiFi. Sophisticated salons named after famous Cartier customers will hold engagement rings, watches, and high jewelry, and period antiques from the Mansion’s birth in 1905 will transport shoppers to an earlier era. But what will happen to Cartier’s temporary location on Fifth Avenue and 59th Street? The jeweler decamped to the former CBS studio in the GM building in 2014 for the duration of the renovation process, sharing a block with FAO Schwarz (until it closed last year) and Apple’s Fifth Avenue flagship. While smaller than the Mansion down the block, the 8,000 square foot store is still a Cartier boutique, outfitted swankily by Bruno Moiard, who is charged with all of Cartier’s boutique appointments. While only seven blocks from the Mansion, the 59th Street store attracted a new, Millennial customer, popping in on the way home from Apple or Barney’s, that may have been put off by the grandiosity of the location down the street. With the market for luxury goods looking increasingly shaky, Cartier should utilize its existing assets to draw in a new consumer by keeping the 59th Street location open and
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re-tooling its assortment to appeal to the Millennial jewelry customer.
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“
JEWELER OF K INGS A ND KING OF J E W E L E R S .”
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- K I N G E D WA R D V I I
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II.
C O M PA N Y O V E R V I E W
HISTORY TIMELINE HERITAGE SIZE & SCOPE CORPORATE OWNERSHIP
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C O M PA N Y H I S T O R Y
In 1847, Louis-François Cartier took over the
Cartier’s long relationship with the House of
helm of his master, Adolphe Picard’s, Paris
Windsor. Fourteen more royal warrants will
workshop at 29 Rue Montorgueil, and the
follow in the next quarter century, including
jewelry house of Cartier is born. It did not
royal families of Russia, Siam, Serbia, and
take long for Cartier’s designs to attract high-
Portugal.
wattage customers, with Empress Eugénie, wife of Emperor Napoleon III, becoming a
Louis Cartier, Alfred’s eldest son and director
Cartier client in 1859, soon to be followed by
of the firm’s Paris operations, creates one of
many of her aristocratic peers.
the first wristwatches for his friend, Brazilian aviator Alberto Santos-Dumont, who had
In 1874, Alfred Cartier, son of Louis-François,
complained to Louis about the difficulty of
takes over the Cartier business from his father,
checking a pocket watch while flying. Louis
and continues to build the Cartier brand,
designs the watch with Santos’s input in
developing the first women’s bracelet watch,
1904. The leather-strapped Santos watch,
in 1888, effectively merging his interests in
launched commercially in 1911, is still in
both jewelry and watchmaking. To make room
production today. Louis continued to build
for the expanding business, Alfred moved
Cartier’s watch heritage with the development
the workshop to the house’s current Paris
of the original Tank watch in 1917, inspired
headquarters at 13 Rue de la Paix, sparking
by the military tanks newly introduced on
a trend of other jewelers and luxury brands
the Western Front. The watch was officially
moving into the area.
launched in 1919, and remains one of the maison’s most enduringly popular designs. Yves Saint Laurent, Andy Warhol, Jackie
EXPANSION
Kennedy Onassis, and Michelle Obama, who wore a Tank Française in her official White
In 1902, Pierre Cartier, the second of Alfred
House portrait in 2013, have worn the Tank.
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Cartier’s three sons, opens a Cartier branch at 4 New Burlington Street in London. Edward,
Jacques, the youngest of Alfred Cartier’s three
Prince of Wales, orders 27 Cartier tiaras
sons, took over the operations of the London
for his upcoming coronation. He later issues
branch in 1906, opening a second London
a royal warrant, making Cartier an official
location at 175-176 New Bond Street.
purveyor of jewels to the crown, beginning
Meanwhile, Pierre, sensing a growing
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opportunity in the rising prominence and
collection is still in production today.
wealth of American industrialists and entrepreneurs opens an American branch in
In 1933, Louis Cartier promoted one of
New York City, at 712 Fifth Avenue in 1909.
his jewelry designers, Jeanne Toussaint, to
His instincts were proven correct the following
head Cartier fine jewelry. Nicknamed “La
year with the sale of the famed 45.5-carat
Panthère” for her feminine sensibility and
Hope Diamond to American Evalyn Walsh
known as “the Coco Chanel of jewelry,”
McLean. In 1917, Pierre moved Cartier’s
Toussaint went on to create many of Cartier’s
New York operations to its current location
most iconic fine jewelry designs. Toussaint
at 653 Fifth Avenue. Pierre purchased the
developed Cartier’s first panthère motif, a
limestone mansion, designed in the Italian
leopard print paved with diamonds and onyx
Renaissance style in 1905 by Robert W.
on the bezel of women’s wristwatch, after a
Gibson, from the industrialist and yachtsman
trip to Africa with Louis Cartier. Her iconic
Commodore Morton F. Plant for $100 cash
animal designs, including parrots, flamingos,
and a double-strand pearl necklace valued at
and the panthère, were coveted by royalty.
$1 million. Plant’s wife, Maisie, had admired
In 1940, the Duke of Windsor had Toussaint
the necklace of 128 perfectly matched natural
reassemble an existing necklace and four
pearls in the window of the Cartier workshop
gemstone bracelets into a flamingo brooch
at 712 Fifth Avenue (now part of Henri
for Wallis Simpson. The couple purchased
Bendel,) and convinced her husband to trade
a panthère brooch featuring the platinum-
their home for the necklace. Pierre brought on
and-diamond-encrusted animal perched atop
architect William Welles Bosworth, who had
a 152.35-carat cabochon sapphire, one of
recently spearheaded the renovation of the
Simpson’s favorite pieces from Cartier in
American Telephone and Telegraph Building
1949.
at 195 Broadway, to transform the stately home into a boutique and headquarters for the
During World War II, Toussaint designed
jeweler’s American operations. Pierre would
a jeweled brooch featuring a songbird in
remain head of Cartier New York until taking
a cage as a symbol of protest against the
over Cartier Paris after the deaths of his
Nazi occupation of France, produced with
brothers in 1945.
limited materials due to wartime shortages. Louis Cartier offered his London offices as a home base for General Charles de Gaulle’s
ARTISTIC EXCELLENCE
“Free France” movement. Many of de Gaulle’s wartime speeches were written in Cartier’s
In 1924, Cartier debuted the three-band
London headquarters. To celebrate the war’s
“Trinity de Cartier” collection. The design
end in 1944, Toussaint designed the “Oiseau
is known as the “Rolling Ring” in France.
Libéré” brooch, with a now joyful songbird
The French poet, director, and artist, Jean
freed from his cage.
Cocteau, helped Louis Cartier develop the
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design, and popularized the Trinity collection among his Parisian society peers. The
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FOURTH GENERATION
Love bracelet, which was created by in-house designer and 70’s icon, Aldo Cipullo.
In 1945, the fourth generation of the Cartier
A NEW ERA
family rises to the forefront after the death of Louis and Jacques Cartier. Claude, Louis’s son, helms Cartier New York, and
While Cartier was aesthetically strong in the
Jean-Jacques, Jacques’s son, takes over
1960’s and 70’s, the company’s finances
Cartier London. Pierre’s daughter, Marionne
were deteriorating. In 1972, financier Joseph
Claudelle, later takes over Cartier Paris after
Kanoui led a group of investors, including
Pierre’s death in 1964.
industrialist Robert Hocq and the South African Rupert family, to purchase Cartier’s Paris operations. Hocq is named President of
ICONIC CLIENTELE
Cartier Paris, and, in 1973, he and General Director Alain Dominique Perrin, began
In 1953, Cartier’s place in Hollywood legend
developing a diffusion line of non-jewelry
and popular culture is cemented when Marilyn
products for wholesale under the new label,
Monroe sings “Cartier!” in the film adaptation
“Les Must de Cartier.” The lower-priced
of Anita Loos’s Gentlemen Prefer Blondes. The
collection included cigarette lighters and
firm’s jewelry first appeared in its iconic red
the first line of leather goods in the house’s
box in the original Broadway production in
signature Bordeaux red. The Kanoui-led
1926. In 1956, Prince Ranier III of Monaco
group went on to purchase Cartier’s London
proposed to the American actress Grace Kelly
operations in 1974 and New York in 1976.
with a 10.47-carat emerald cut diamond ring
The Cartier interests were combined into
from Cartier. Kelly had been a Cartier client
“Cartier Monde” (meaning “Cartier World”)
for years after being introduced to the maison
in 1979. In 1981, Cartier Monde and Les
by director Alfred Hitchcock. Ranier’s family,
Must de Cartier were merged into Cartier
the Grimaldis, had originally issued a royal
International, and Perrin was named Chairman
warrant to Cartier in 1920. Kelly wore a suite
of the newly formed entity.
of Cartier diamond jewelry for her wedding on April 19, 1956.
Under new financial leadership, the Cartier business flourished, as the Must product line grew to include silk scarves in 1978;
doyennes of the silver screen, later creating a
the first Cartier perfumes, “Must de Cartier”
serpent-shaped diamond necklace for Mexican
and “Santos de Cartier,” in 1981; and
actress María Félix in 1968, and selling a
a collection of porcelain, crystal, and
69.42-carat pear-shaped diamond to Richard
silverware, called “Les Maisons de Cartier”
Burton, who bought the stone as a birthday
in 1987. The entry-level price points for these
gift for Elizabeth Taylor in 1969. The stone
items allowed a new group of customers
was renamed the Taylor-Burton diamond.
access to the Cartier brand, raising Cartier’s
1969 also marked the original launch of the
profile. This effort worked in tandem with
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Cartier would continue its relationship with
CARTIER IN THE 21 ST CENTURY
massive retail expansion, as a slew of new Cartier boutiques opened worldwide. To boost its watchmaking business, Cartier also acquired majority stakes in watchmakers
In the early 2000’s Cartier moved to make
Piaget and Baume and Mercier in 1988.
its jewelry supply chain more transparent. In 2001, the maison adopted the Kimberly Process, an industry-wide effort to end trade
CURATION OF HERITAGE
in conflict diamonds. In 2005, along with thirteen other jewelry industry leaders, Cartier
Simultaneously, the new Cartier leadership
co-founds the Council for Responsible Jewelry
worked to cultivate the brand’s rich heritage.
Practices, which sets standards for responsible
Michelle Kanoui, the recently named head of
business practices for each step of the jewelry
jewelry design debuted her first collection for
supply chain for its 850 member companies.
Cartier in 1982. Her collection, “Nouvelle Joaillerie,” was inspired by the brand’s
In 2011, Kate Middleton wore a diamond and
Paris lineage and drew on many of Jeanne
platinum Cartier tiara with foliated scrolls,
Toussaint’s iconic designs of the early
known as the “Halo Tiara,” for her wedding
20th century. In 1984, Perrin founded the
to Prince William. The tiara was originally
“Foundation Cartier pour l’Art Contemporain,”
created in 1936 for Queen Elizabeth II, then
a foundation for contemporary art, to
the Duchess of York, and was also worn by
strengthen ties between the maison and artists
Princess Margaret in 1955.
of the time. This effort culminated in the 1989 retrospective of the Cartier collection, called
In 2012, Cartier debuted L’Odyssée de
“L’Art de Cartier,” staged by the Musée du
Cartier, a three-and-a-half minute long film
Petit Palais in Paris. The exhibit displayed
that took two years and $5.3 million to
jeweled creations dating back to the maison’s
produce. The film starred real panthers and
founding and included pieces from Cartier’s
was directed by Bruno Aveillan. Cartier
archives as well as items on loan from their
hosted a premiere at the Metropolitan Museum
royal owners. The exhibition was later shown
of Art in New York to screen the film, which
at the Hermitage Museum in Saint Petersburg
celebrated Cartier’s 165th anniversary.
in 1992, the Tokyo Metropolitan Teien Art Museum in Tokyo in 1995, the Museo del Palacio de Bellas Artes in Mexico City in 1999, the Shanghai Museum in Shanghai in 2004, and the Deoksugung National Museum
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in Seoul in 2008.
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Wallis Simpson wearing her Cartier panthère brooch (pictured at right) on the belt of her dress.
Jewelry designer Jeanne Toussaint, “La Panthère,” designed the first panthère motif for Cartier in 1914.
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R E N O VA T I O N O F A N I C O N
In 2014, renovations began on Cartier’s
app designed for Apple and Android phones
Fifth Avenue store. The design team is led
that offers customers a guided historical tour
by two New York-based architectural firms
around the store. A portrait of the maison’s
specializing in historic preservation. Beyer
original matron, Maisie Plant, wearing her
Blinder Belle worked on the 1980’s renovation
pearl necklace, hangs prominently overlooking
of Ellis Island, and Thierry W. Despont
the grand staircase.
led the 1980’s restoration of the Statue of Liberty. Retail operations are moved up the street to the GM Building on Fifth Avenue at 59th Street. The 59th Street store opening coincides with the launch of the lower-priced “Amulette de Cartier” collection, which is featured in an accompanying interactive microsite with links to influencer content on social media on Cartier’s website and promoted with #UnlockYourWish. In September 2016, with renovations complete, the mansion reopens at Fifth Avenue and 52nd Street (officially named “Place de Cartier” in 2001.) The occasion is marked with a gala attended by Katie Holmes, Sienna Miller, Taylor Schilling, Sofia Coppola, and Rooney Mara, among others from the glitterati set. The new store offers four floors of selling space, with specialty salons named for some of Cartier’s famous clients. Private booths above the main selling floor allow sales associates to confer with high-dollar clients without being disturbed.
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The new store also offers Wi-Fi connectivity, iPads for inventory searches, and a mobile
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The newly renovated Oak Room (top) and Princess Grace Salon (bottom) at 653 Fifth Avenue.
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Clockwise, beginning at top | Katie Holmes, Sienna Miller, and Sofia Coppola arriving at the gala to celebrate the reopening of Cartier’s 653 Fifth Avenue store. Invitations embossed with the image of the Plant mansion. Portrait of Maisie
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Plant, wearing her Cartier pearl necklace, now hanging in the mansion.
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59th Street and Fifth Avenue store in the GM Building, across from the Plaza and Central Park.
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Left | Mobile ad on The New York Times announcing the move to the 59th Street store in 2014.
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Right | The GM Building on Fifth Avenue in New York.
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Interior of the Central Park store.
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TIMELINE 1847-1953
1904 Louis Cartier creates one of the first wristwatches for his friend, Brazilian
1847 Louis-François Cartier
aviator Alberto Santos-
takes over the helm of
1874
Dumont, who had
his master, Adolphe
Alfred Cartier, son of
complained to Louis
Picard’s, Paris workshop
Louis-François, takes
about the difficulty of
at 29 Rue Montorgueil,
over the Cartier business
checking a pocket watch
and Cartier is born.
from is father.
while flying.
1859
1902
1909
Empress Eugénie, wife
Pierre Cartier, the
Pierre Cartier opens
of Emperor Napoleon
second of Alfred
an American branch
III, becomes a Cartier
Cartier’s three sons,
in New York City, at
client. Many of her
opens a Cartier branch
712 Fifth Avenue, to
aristocratic peers soon
at 4 New Burlington
take advantage of
follow.
Street in London. Edward
the growing wealth of
VII orders 27 Cartier
American industrialists
tiaras for his upcoming
and entrepreneurs.
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coronation.
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1949 The Duke and Duchess of Windsor purchase an
1917
iconic panthère brooch
Louis Cartier designs the
featuring the platinum-
Pierre Cartier sells the
first Tank watch, inspired
and-diamond-encrusted
famed 45.5-carat Hope
by the military tanks
animal perched atop a
Diamond to American
newly introduced on the
152.35-carat cabochon
Evalyn Walsh McLean.
Western Front.
sapphire.
1910
1917
1933
1953
Pierre Cartier moves
Jeanne Toussaint,
Marilyn Monroe sings
the New York store to
knicknamed “La
“Cartier!” in the film
its current location at
Panthère” for her
adaptation of Gentlemen
653 Fifth Avenue. The
feminine sensibility and
Prefer Blondes.
mansion, designed by
known as “the Coco
Robert W. Gibson,
Chanel of jewelry,” is
is purchased from
named head of Cartier
industrialist Morton F.
fine jewelry.
Plant for $100 cash and a double-strand natural pearl necklace valued at CARTIER
$1 million.
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TIMELINE 1953-2014
1974 Cartier loans Art Decostyle pieces from its house collection to
1956 Prince Ranier III of
director Jack Clayton
Monaco purchases a
as part of the costumes
10.47-carat emerald-
1969
for his period film, The
cut diamond ring for his
The first Love bracelet is
Great Gatsby, starring
engagement to American
designed for Cartier by
Robert Redford and Mia
actress Grace Kelly.
Aldo Cipullo.
Farrow.
1964
1972
1979
Pierre Cartier dies,
Financier Joseph
The Cartier interests are
Cartier Paris is taken
Kanoui leads a group
combined into “Cartier
over by his daughter,
of investors, including
Monde.”
Marionne Claudelle.
industrialist Robert Hocq and the South African Rupert family, to purchase Cartier’s Paris
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operations.
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2012 Cartier debuts L’Odyssée
2002
1981
de Cartier, a three-and-
Cartier adopts the
The first Cartier
a-half minute long film
Kimberly Process, an
fragrances, “Must de
that took two years and
industry-wide effort to
Cartier” and “Santos de
$5.3 million to produce
end trade in conflict
Cartier” are launched.
and celebrated Cartier’s
diamonds.
165th anniversary.
2001
2011
2014
The intersection of Fifth
Kate Middleton wears a
Renovations begin on
Avenue and 52nd Street
diamond and platinum
Cartier’s Fifth Avenue
in New York City is
Cartier tiara with
store. Retail operations
officially named “Place
foliated scrolls, known
are moved up Fifth
de Cartier.”
as the “Halo Tiara,” for
Avenue to 59th Street.
her wedding to Prince William.
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H E R I TA G E
Above | Princess Grace of Monaco wearing her 10.47-carat Cartier engagement ring. Left | The Duchess of Cambridge on her wedding day in 2011, wearing Cartier’s “Halo Tiara,” originally designed
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for Elizabeth II in 1936.
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Below | Andy Warhol photographed in a Cartier Tank watch. One of the salons in the new Fifth Avenue Mansion is named for him. Right | Elizabeth Taylor wearing the 69.42-carat TaylorBurton Diamond, set in necklace designed for her by Cartier, and part of her enormous jewelry collection.
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SIZE & SCOPE
SIZE & SCOPE STORE LOCATIONS
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PRODUCT CATEGORIES
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SIZE & SCOPE
STORE LOCATIONS 286 Boutiques 125+ Countries 3 Maisons | Paris
London
New York
LEADERSHIP Cyrille Vigneron | CEO Mercedes Abramo | CEO, Cartier North America Headquarters | Paris, France NUMBER OF EMPLOYEES | 5,600 ANNUAL NET SALES, FY 2015 | $6.1 billion USD
SOCIAL MEDIA Instagram followers | 3.9 million Twitter followers | 359,000 Facebook page likes | 3.9 million Pinterest followers | 18,900 Snapchat Tumblr
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S T O R E L O C AT I O N S
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P R O D U C T C AT E G O R I E S
JEWELRY
EYEWEAR Optical
WATCHES
Sun
HANDBAGS
WRITING INSTRUMENTS
SMALL LEATHER GOODS
Pens
Wallets
Belts
Leather-bound Diaries
FRAGRANCE
ACCESSORIES
Precious Eyewear
Silk Scarves
CLOCKS
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Cufflinks
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An advertisement featuring the signature Cartier panther and the “Les Msut de Cartier� leather goods, first introduced by Robert Hocq and Alain Dominique Perrin in 1973.
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C O R P O R AT E O W N E R S H I P
CORPORATE STRUCTURE COMPANY HISTORY CURRENT STATUS
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BRAND PORTFOLIO
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C O R P O R AT E S T R U C T U R E
COMPAGNIE FINANCIÈRE RICHEMONT SA COMPANY LEADERSHIP Richard Lepeu | CEO Gary Saage | CFO Burkhart Grund | Deputy CFO Frank Vivier Chief | Transformation Officer Hans-Peter Bichelmeier | Group Operations Director Thomas Lindemann | Group Human Resources Director Cédric Bossert Group | General Counsel Cyrille Vigneron | CEO, Cartier Nicolas Bos | CEO, Van Cleef & Arpels Jérôme Lambert | CEO, Montblanc Georges Kern | CEO, IWC Schaffhausen Philippe-Léopold Metzger | CEO, Piaget Daniel Riedo | CEO, Jaeger-LeCoultre 19-member Board of Directors Johann Rupert | Chairman of the Board
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C O R P O R AT E H I S T O R Y
Cartier’s parent company, Compagnie
business began to decline, Rupert moved
Financière Richemont, began as a tobacco
to diversify his companies, and in 1983,
company founded by South African tycoon Dr.
Rothmans International moved to buy out
Anton Rupert in 1941. Originally known as
Kanuoi and the other investors, giving Rupert
Voorbrand Tobacco Company, Rupert renamed
control of Cartier Monde. In 1988, Rupert
his operation Rembrandt in 1948. The success
sought to restructure Rothmans International
of Rembrandt’s cigarette manufacturing
to avoid sanctions placed on South Africa
business in South Africa allowed Rupert
by western nations upset by apartheid. He
to expand his business internationally. In
separated the South African-based business
1954, Rembrandt acquired a controlling
from the international assets, spinning off
interest in the British tobacco company,
the latter into a new, Swiss-based holding
Rothmans, the maker of Pall Malls, as part
company, Richemont. Rupert placed his son,
of a deal to distribute Rothmans cigarettes in
Johann Rupert, a veteran of Chase Manhattan
South Africa. Rupert continued to build his
and Lazard Frères who had joined the family
business internationally with the acquisition
company in 1985, at the helm of the new
of Carreras, another British tobacco
business. Johann Rupert sought to consolidate
manufacturer, in 1958. The two British
control of the Richemont assets to insulate
companies were merged to form Carreras
the luxury brands from the performance
Rothmans, controlled by Rupert’s Rembrandt
pressures of the market. In 1989, he directed
Group. In 1967, Carreras Rothmans
Richemont’s purchase of Phillip Morris’s 24
purchased a majority stake in Alfred Dunhill
percent stake in Rothmans International,
Limited, another British cigarette brand that
securing the Rupert family’s control over
would eventually expand into luxury menswear
Rothmans.
and accessories. In 1972, Carreras Rothmans was rechristened Rothmans International. Independent of his tobacco dealings, Anton Rupert joined the group of investors led by Joseph Kanuoi who purchased Cartier’s Paris operations in 1972, followed by the
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acquisitions of Cartier London in 1974 and Cartier New York in 1976. As the tobacco
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C O R P O R AT E H I S T O R Y
In 1993, Johann Rupert again sought to
This practice made Richemont an attractive
restructure Richemont by dividing the luxury
partner to companies looking to sell equity. In
and tobacco assets to better respond to
1999, Fingen SpA partnered with Richemont
industry shifts in the global marketplace.
to purchase an 80 percent interest in jeweler
The luxury businesses, Cartier and Dunhill,
Van Cleef and Arpels, with Fingen controlling
were merged into the Vendôme Group, and
20 percent, and Richemont 60 percent, with
combined with majority stakes in Piaget
the remaining 20 percent controlled by the
and Baume and Mercier through Cartier
Arpels family. Richemont later purchased
and Chloé and Montblanc through Dunhill.
Fingen’s 20 percent share in 2001 and
Joseph Kanuoi was brought on as chairman
the Arpels’ share in 2003. The Van Cleef
and chief executive of Vendôme. The merger
and Arpels purchase and the $1.86 billion
left Richemont with control of 70 percent
acquisitions in 2002 of watchmakers the Stern
of Vendôme, with existing public Rothman’s
Group and Les Manufactures Hologeres, which
shareholders controlling another 18 percent,
included majority stakes in Jaeger-LeCoultre,
existing Dunhill shareholders with 8 percent,
IWC, and A. Lange Sohne, were financed
and the remaining 4 percent of shares
by the $21 billion merger of Rothmans
controlled by Luxco, Vendôme’s holding
International and British American Tobacco in
company.
1999, which left Richemont with a 35 percent stake in the resulting company, also called
To further insulate the luxury portfolio from
British American Tobacco.
outside pressure and assure the brands long-term support, Rupert sought to bring Vendôme’s assets under Richemont’s control by purchasing the remaining 30 percent of shares not already owned by Richemont. Vendôme’s board approved the buyback in 1997 and the deal was completed in 1999. Following the buyback, Rupert kept to his cautious, longterm outlook, taking a conservative approach to acquisitions and resisting consolidation CARTIER
of production in order to maintain product integrity for his brands.
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C O R P O R AT E H I S T O R Y
The BAT merger allowed Rupert and Richemont
Richemont currently allows each of its groups,
to direct focus to the stable of luxury brands,
called Maisons, to operate independently
of which Cartier remained the centerpiece,
in the areas of product development,
accounting for upwards of 50 percent of
manufacturing, distribution, communication,
Richemont’s revenue. Acquisitions continued
marketing, and customer services; but offers
with the purchase of the remaining shares
regional support platforms to handle finance,
of A. Lange Sohne in 2003, and majority
logistics, information technology, human
interests in Azzedine Alaïa and Manufacture
resources, and after sales services; in each
Roger Dubuis SA in 2007. Also in 2007,
geographic area in which Maisons operate.
Richemont entered into a 50/50 joint venture
Maisons are grouped into operating divisions
with Polo Ralph Lauren to create the Ralph
for reporting purposes: three Jewelry Maisons,
Lauren Watch and Jewelry Company, whose
nine Specialist Watchmakers, and eight Other
first collection launches in 2009.
Businesses.
In 2008, all of Richemont’s remaining nonluxury assets were spun off into a separately traded public company, Reinet Investments S.C.A., leaving Richemont as a pure luxury group. 2010 saw the acquisition of a majority stake in NET-A-PORTER.COM, which was merged with the YOOX group in 2015, with Richemont owning 50 percent of the resulting shares. Rupert has served as chairman of Richemont since 2002. Rupert and his family, through their holding company, Compagnie Financière Rupert, still own 9.1 percent of the company
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publicly traded on the Swiss exchange.
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C U R R E N T S TAT U S
Publicly traded on SIX Swiss Exchange under CFR Current stock price | 6 6 .1 0 C H F ( 6 5 . 5 6 U S D ) Total shares held | 522 000 000 ‘A’ registered shares, listed on SIX Significant Investor | Compagnie Financière Rupert
holds 522 000 000 unlisted ‘B’ registered shares
Net sales for year ending March 31, 2016 | € 11, 0 76 m i l l i o n ( $ 117 5 8 m i l l i o n U S D ) Net profit for year ending March 31, 2016 | € 2 , 2 2 7 m i l l i o n ( $ 2 3 6 4 .13 m i l l i o n U S D ) Number of employees | 28,810 Headquarters | Geneva, Switzerland Listed as #2 of the top ten luxur y goods companies worldwide by Deloitte.
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BRAND PORTFOLIO
OTHER BUSINESSES
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JEWELRY MAISONS
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SPECIALIST WATCHMAKERS
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TO P 1 0 LU X U RY G O O D S C O M PA N I E S
FY 2014 LUXURY FY 2014 LUXURY FY 2014 LUXURY GOODS SALES GOODS SALES GOODS SALES RANKING (USD M) GROWTH % L V M H M o ë t H e n n e s s y - L o u i s V u i t t o n S A
$ 2 3 , 2 9 7
7.0%
02
C o m p a g n i e F i n a n c i é r e R i c h e m o n t S A
$ 1 3 , 2 1 7
3.9%
03
E s t é e L a u d e r C o m p a n i e s I n c .
$ 1 0 , 7 8 0
-1.7%
04
L u x o t t i c a G r o u p S p A
$ 1 0 , 1 7 2
4.6%
05
T h e S w a t c h G r o u p L t d .
$ 9 , 2 2 3
3.1%
06
K e r i n g S A
$ 8 , 9 8 4
4.5%
07
C h o w T a i F o o k J e w e l r y G r o u p L t d .
$ 8 , 2 8 5
-17.0%
08
L ’ O r é a l L u x e
$ 8 , 2 3 9
5.7%
09
R a l p h L a u r e n C o r p .
$ 7 , 6 2 0
2.3%
10
P V H C o r p .
$ 6 , 4 4 1
3.9%
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III.
M A R K E T A N A LY S I S
ECONOMIC CLIMATE COMPETITORS
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SWOT ANALYSIS
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E C O N O M I C C L I M AT E
In September 2016, Richemont issued a
trends as well as Richemont’s strong balance
profit warning with the announcement of its
sheet of luxury brands.
sales falling by 14% for the period of April through August, from the same period in
2015 SALES DECLINE
2015. An accompanying statement added, “We are of the view that the current negative environment as a whole is unlikely to reverse
Richemont’s sales performance, though weaker
in the short term.” This sales slump, driven by
than expected, was stronger than in 2015,
a slowdown in global growth, especially in
indicating that the luxury goods market is
China, depressed tourism in Europe due to the
recovering. Compared to 2016’s numbers,
threat of terrorist attacks, and volatile shifts in
2015 represents a trough in Richemont
currencies, especially the Swiss franc, whose
profits, with a sell off in November 2015
relative strength has spiked manufacturing
triggered by an announcement from Richemont
costs, triggered a 4% drop in Richemont
that net profit for the six months ending on
shares on the Swiss Market Index.
September 30, 2015 rose to only $1.2 billion from $962 million the year before, missing
Sales in Europe decreased by the greatest
analysts’ expectations by $138 million.
margin, 20%, with sales in Japan dropping
Reported sales for the period of $6.16 billion
15%, and sales in the Asia Pacific region and
missed projections by $140 million. The
the Middle East and Africa both sliding 12%.
announcement was accompanied by downbeat
The smallest decrease was in the Americas,
comments by CFO Gary Saage, who stated
where sales dropped only 8%.
that Richemont expected the remainder of the year to be “challenging,” and that Hong
While watch sales decreased by 19%, jewelry
Kong and Macau, two of the world’s largest
sales only dropped by 16%, with sales in
luxury markets, remained “extremely difficult.”
other goods actually rising by 2%.
The earnings report triggered a 9.1% drop in Richemont’s shares on the Swiss Market Index as investors reacted to the gloomy news, with
confident about long-term growth, stating
luxury competitors LVMH and Swatch Group
at Richemont’s annual meeting, “We remain
taking similar hits, down 4.8% and 6.3%,
convinced of the long-term prospects for luxury
respectively.
goods globally,” and pointing to historical
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However, Chairman Johann Rupert was more
BRIGHTER OUTLOOK FOR 2017
Despite this, consultants at Bain & Co., a longtime leader in analysis of the luxury sector, back up Rupert’s optimism, predicting in April that the luxury goods market should pick up again in 2017 after slumping in 2015. In October, Bain consultants updated their initial report with the “Bain & Company Luxury Study,” released in collaboration with Fondazione Altagamma, the Italian luxury goods manufacturers’ industry foundation. The study emphasized the rise in spending on luxury experiences over personal luxury goods, but predicted a compound annual growth rate for personal luxury goods of 3-4% by 2020. However, the study warned that with the breakdown of traditional barriers to the luxury market spurred by the “democratizing force” of digital, competition in the market would be fierce. “Naturally, an influx of new market entrants is concerning to incumbents, who are worried about losing market share,” said Federica Levato, a Bain partner based in Milan and co-author of the study. “But, we anticipate big opportunities for the brands that are willing to think and act more like their up-and-coming counterparts.” Bain stressed the importance of adaptability to omni-channel, customer-centric business models as a differentiating advantage for luxury goods companies, especially in regards to e-commerce, which reached 7% penetration in 2016, making it the third largest luxury
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‘market’ globally after the U.S. and Japan.
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REGIONAL OPPORTUNITIES
Saturation in the Chinese market and
While the U.S. market is typically considered
slowdown in the Chinese economy; a supply
saturated, many luxury brands have only a
glut in the oil industry causing political
light footprint outside of New York and Los
instability in OPEC countries, Russia, and
Angeles, leaving considerable room for growth
Brazil; and currency fluctuations and the
in other areas, including secondary cities,
looming threat of terrorism in Europe has
which are quickly becoming luxury centers.
depressed consumer spending on luxury goods in these markets, while despite an uncertain
SPENDING TRENDS
political climate, the U.S. continues to be a strong prospect for luxury brands. The world’s largest economy, while having long
Additionally, while the “Affluent Perspective
ago matured from the exciting “developing
Global Study” conducted by YouGov’s Wealth
economy” stage, still boasts stable GDP
Practice, forecasts a 0.9% reduction in luxury
growth of about 2%, and an unemployment
spending among affluent groups in 2017,
rate of 4.9%. Private consumption in the U.S.
two groups, millennials and the wealthiest
is increasing by 2-3% per year, and long-
400,000 households, are expected to
stagnant incomes are finally beginning to rise.
increase their spending on luxury goods by 8% and 10%, respectively. Millennial spending on
In terms of scale, America’s luxury market
luxury goods is predicted to reach $49 billion
is the largest in the world, with the luxury
in 2017, compared to $96 billion for Gen
market in New York alone accounting for
X and $117 billion for baby boomers. These
$25.5 billion, more than the entire luxury
increases will be driven primarily by two
market of Japan, second to the U.S. in overall
categories, travel and fine dining, up 10%
size. The U.S. has over 14 million “affluent
and 5%, respectively, from 2015.
households,” considered to be those with an annual income of over $150,000. The top 400,000 households in this group have a mean income of around $1 million annually.
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COMPETITORS
TIFFANY & CO.
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DAVID YURMAN
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HERMÈS
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S W O T A N A LY S I S S STRENGTHS Rich heritage of iconic, artful design. Instantly recognizable branding and covetable packaging. Large network of existing retail stores. Wealth of eye-catching media content. Parent company supportive of CARTIER
long-term capital investment.
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W
O
T
WEAKNESSES
OPPORTUNITIES
THREATS
Media presence is
Utilize existing following
Decreasing consumer
inconsistent across platforms.
among millennial influencers.
confidence makes it difficult for customers to justify luxury
Well-designed campaigns
Tout transparency efforts
are easily crowded out by
and heritage appeal to
lesser ones.
build loyalty with millennial
Global trends like currency
customer.
fluctuations and decrease in
Website is clunky to navigate
purchases.
travel can cut into earnings.
and difficult to shop, and
Incorporate experiential
many items cannot be
technology in stores to make
purchased online.
boutiques into destinations.
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I V.
C U S T O M E R A N A LY S I S
DEMOGRAPHICS & PSYCHOGRAPHICS CUSTOMER PROFILES
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D E M O G R A P H I C S & PSYC H O G R A P H I C S
Millennials, the subset of the population born
The scars of the Recession also left millennials
between 1980 and 2000, are an increasingly
to place more emphasis on an experience
important slice of the consumer market for
rather than an material things. Spending on
luxury retailers to capture, having now
travel, activities, and adventures has exploded
surpassed the baby boomers as the largest
in recent years as the generation searches
generation in the United States, with 75.4
for more meaning in their spending. More
million members. The term “millennial” was
meaningful earning has become increasingly
coined by William Strauss and Neil Howe,
inportant, as well, and many millennials
whose theory of generational cycles predicts
choose to stay away from high-paying jobs
that millennials will become more “civic-
in favor of a career about which they are
minded” like the earler G.I. Generation, as a
passionate.
reaction to current events. Another distinct trend among millennials that Millennials’ economic worldview is very much
demands attention from the jewelry industry is
shaped by the Great Recession of 2007-08,
the later dates of marriage. The drifting away
when many saw their job prospects dwindling
from traditional rites of passage in favor of a
and witnessed firsthand the downfalls of easy
personalized time table is slowing marriage
credit and overspending. In 2015, millennials
rates among the generation. Decreasing
in New York City reported earning 20% less
economic stability has also contributed to
than the generation before them, despite
this trend, as many millennials choose or are
having higher percentages of college and
forced to live with their parents to save money
post-college degrees. Thus, millennials are
long after previous generations would have,
more cautious with their money, and seek to
making it more difficult to find a partner.
purchase items that are more in line with their own personal style than the conformity of a
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highly-advertised label.
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C USTO M E R P RO F I L ES
N A M E | C a t e
Tyler
A G E | 2 8
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OCCUPATION | Junior Buyer at Saks
Principal at Apollo Global
L I V E S | E a s t V i l l a g e , N e w Y o r k
TriBeCa, New York
Y E A R L Y I N C O M E | $ 1 6 0 , 0 0 0
$400,000
H O B B I E S | S o u l C y c l e
Golf
V i n t a g e s h o p p i n g
Playing basketball with friends
Visiting the Whitney Museum
Cooking
PURCHASING | Amulette necklace
Love bracelet
F O R | h e r s e l f
his girlfriend
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V. S T R A T E G I C P L A N
ANALYSIS IMPLEMENTATION STRATEGIES
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A N A LY S I S I. Stability and reliable growth of U.S. market is an opportunity for growth in a volatile gloabl market. II. A cohesive omnichannel shopping experience that melds seamlessly with media content is vital to reaching millennial customers, which also represent a growth opportunity. III. Creating a customized shopping experience available in-store and online will draw customers looking for experiential luxury. IV. Central Park store location offers an opportunity to test these practices, and create an experiential shopping
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and travel destination for tech-minded younger consumers.
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I M P L E M E N TAT I O N S T R AT E G I E S
Make digital content uniform across all platforms for cohesiveness and to emphasize impact of ad campaign. Use existing CRM systems and social media to strengthen bond with younger consumers, ensuring that they will turn to Cartier for larger purchases later in life.
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I M P L E M E N TAT I O N S T R AT E G I E S
Re-tool e-commerce site and technology capacity of 59th Street boutique to allow for “cutomizable” products.
U s i n g f o u r o f C a r t i e r ’ s m o s t p o p u l a r l i n e s w i t h t h e m o s t v a r i e t y , a l l o w c u s t o m e r s t o b e
involved in the process of choosing their item. Instead of giving the customer a list of 20
pre-defined choices, allow customer to make each decision along the way.
Include the option of personalized engraving.
Customer receives a unique product tailored specifically to them.
Even online customers feel they have recieved the top-of-the-industry customer service for
which Cartier is known.
Market the Central Park store as a new shopping destination, utilizing proximity to the Apple store and Barney’s to attract a customer not necessarily enticed by the 52nd Street location. Ensure that Cartier hallmarks of iconic design and white glove customer service permeate the
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experience, even in a new setting.
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TRINITY DE CARTIER tricolor
thin
4 diamonds
white gold
medium
10 diamonds
pink gold
thick
diamond pavé
yellow gold
JUSTE EN CLOU
white gold
thin
4 diamonds
pink gold
medium
10 diamonds
yellow gold
thick
diamond pavé
LOVE white gold
cuff
4 diamonds
pink gold
bracelet
10 diamonds
yellow gold
diamond pavé
AMULETTE DE CARTIER
small
onyx
medium
malachite
large
coral tigerseye lapis
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amethyst
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V I . CO N C LUS I O N
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CO N C LUS I O N If this strategy is successful, move to implement it across a wider stretch of product, expanding the customization to other stores and countries and expanding product lines to include watches and men’s jewelry.
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