https://www.revolution.watch/the-tale-of-the-1980s-omani-crested-iwc-ingenieur/

https://www.bloomberg.com/news/articles/2017-01-26/swiss-watch-exports-have-worst-year-since-financial-crisis

https://www.ft.com/content/b3e49344-d1cb-11e6-b06b-680c49b4b4c0

https://www.bloomberg.com/view/articles/2016-12-12/middle-class-angst-is-depressing-swiss-watch-sales

https://www.ft.com/content/8473f664-8954-11e6-8cb7-e7ada1d123b1

https://www.theguardian.com/lifeandstyle/2016/oct/19/luxury-watch-industry-survive-digital-age

By Corinne Gretler and Thomas Mulier
(Bloomberg) -- For over a century, Cartier has sold
elegant, if simple, timepieces such as the Tank, which starts
around $2,500 -- affordable by Swiss watch standards, and never
confused with the level of technical finesse from brands like
Patek Philippe.
 
Then a decade ago, Cartier sought to prove its own prowess,
investing millions to build one of Switzerland’s largest watch
factories and bringing in an industry veteran to head a fine
watchmaking unit. The jeweler delved into the segment for
connoisseurs known as “complicated pieces,” which sport analog
mechanisms such as calendars that adjust for leap years and
require painstaking hand craftsmanship. The effort culminated
last year in the Rotonde de Cartier Grande Complication
Skeleton, a glass-backed confection priced at more than
$600,000.
But then the Chinese demand that had supported the market
collapsed. Wednesday, Cartier’s parent, Richemont, said that
first-half profit will fall about 45 percent, a level Chairman
Johann Rupert called “unacceptable.” In response, Cartier has
cut jobs, bought back unsold inventory from retailers, and is
refocusing on more affordable pieces. The retrenchment is a
cautionary tale for the industry and for businesses in general -
- a reminder that luxury demand is ephemeral and that stretching
a brand beyond its comfort zone carries considerable risk.
“Cartier has a very classic style, and that alone is
already perceived as a status symbol,” said Manfred Abraham, a
partner at consultancy BrandCap in London. “Consumers still get
the same impact with a 2,000 pound watch as they do with a 8,000
pound watch, because people will still say, ‘Oh my God, it’s a
Cartier!’”
Cartier began its push into fine watchmaking in 2008,
creating a division led by Carole Forestier-Kasapi, a watch-
industry veteran who had worked at Audemars Piguet. While
Richemont doesn’t say how much it spent, the Geneva-based
company probably invested about 150 million euros ($168 million)
in Cartier’s watch business, with about a third of that focused
on higher-end complicated timepieces, estimates Jon Cox, an
analyst at Kepler Cheuvreux.
In the following years, Cartier developed dozens of new
movements -- the engine of a watch -- to improve its reputation
and show that it belongs in the same league as the likes of
Patek Philippe, Vacheron Constantin and Breguet, which have
focused on complicated timepieces for more than a century.
For Cartier, a brand traditionally associated with jewelry
for women, joining that men’s club was a stretch. Unlike the
brands it was chasing, which are focused almost exclusively on
watches, Cartier has a broad luxury portfolio of leather
handbags, fragrances and sunglasses.
But the company saw rich rewards in going upmarket: brands
that have hyper-expensive handcrafted watches at the top of the
lineup can typically charge more even for their less expensive
offerings.
“In the man’s connoisseur world, Cartier wasn’t taken
seriously enough,” said Patrik Schwendimann, an analyst at
Zuercher Kantonalbank. “But to change an image can take
decades.”

‘Blinded By China’

The Ballon Bleu line, introduced in 2007 and favored by the
likes of the Duchess of Cambridge -- the former Kate Middleton,
the wife of Prince William -- was a hit. But while it might
account for as much as half the brand’s sales in China, later
collections never gained the same traction, according to Zuzanna
Pusz, an analyst at Berenberg.
“Cartier was blinded by the boom in China,” Pusz said.
A campaign against extravagant spending and corruption in
China has crimped demand for watches there. And in Europe
terrorist attacks have cut the numbers of free-spending tourists
who make up a big chunk of sales. Cartier has had three chief
executives in the past half-decade as earnings growth at
Richemont’s jewelry business flattened from rates exceeding 40
percent.
Cartier joins the likes of TAG Heuer, Tiffany and Bulgari,
brands that have tried to extend their range of Swiss watches
and later backtracked as the market didn’t support them. Other
jewelry houses such as Piaget and Chopard have also broadened
their presence in the watch industry, but no other company went
quite as far as Cartier.
The watchmaker this year introduced a lower-priced new
collection for men, called Drive, which starts at about $6,000.
At a watch salon in Geneva in January, the company plans to
present a selection of more feminine watches with fewer
complications that cost less, going back to the brand’s roots.
“We have to slim down into the real demand of the market,”
said Rupert, the Richemont chairman. “The world currently has an
excess of every manufactured good.”

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