Watches & Jewellery
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FT SPECIAL REPORT Watches & Jewellery Monday January 19 2015 www.ft.com/reports | @ftreports Inside Strong Swiss Cartier’s grandmaster of complications Stanislas de Quercize on his mission to maintain creative excellence franc brings Interview, Page 2 Best watches on show The pick of fine time pieces to be unveiled greater risks at SIHH this week Page 3 Red carpet jewels The brands competing for exports for the glittering rewards of awards season Page 7 Currency decision and geopolitical tensions are adding to watchmakers’ woes, writes James Shotter ‘This is not a pretty business’ ast year was difficult for Swit- Ontopofthis,Swisswatchmakerswill Wound up: as the SIHH International de la Haute Horlogerie — Some analysts reckon that, barring Jeweller Pippa Small zerland’s watchmakers. The now have to cope with a stronger cur- fair opens in Geneva, the first big watch fair of the year — further unexpected shocks, growth sees a more ethical lingering impact of China’s rency in 2015, after the Swiss National luxury brands are startsinGenevatoday. could return to its long-run average. future for goldmines clampdown on corporate gift- Bank stunned markets by scrapping its taking stock after a “The brands are comfortable, but “I am probably in the optimistic camp,” L giving, civil unrest in Hong policy of preventing the Swiss franc difficult year they are also being careful because the says Jon Cox, head of Swiss equities at Page 8 Kong — the world’s biggest market for appreciatingbeyondSFr1.20totheeuro Reuters global political and economic situation Kepler Cheuvreux, “but I think the Swisswatches—andthegyrationsofthe lastweek. is not very calm,” says Fabienne Lupo, industry will grow around 7 per cent as rouble combined to slow growth in “A strong Swiss franc has historically chairwoman and managing director of measured by exports. The high end A cabinet of curiosities exports to 2.3 per cent in the first 11 beenbadforRichemont’sprofitandloss Fondation de la Haute Horlogerie, the mightgrowfaster,around8percent.” Modern designers monthsoftheyear. account and even more so for Swatch foundation behind SIHH. “However,we He is sanguine, he says, because with refashion prehistoric Protests in Hong Kong are over for Group,” says Thomas Chauvet, an ana- still [had] growth in Swiss watch the initial impact of Beijing’s anti-graft artefacts and now, and the main impact of Beijing’s lystatCitigroup. exports of between 2 and 3 per cent in drive fading from Chinese data, the anti-graft drive has faded. But market Watchmakers are in cautious mood 2014. That is less than in previous years dynamicsofthecountry’swatchmarket antiquarian finds conditionsinRussiaremainvolatile. as, against this volatility, the Salon butitisstillpositive.” continuedonpage5 Page 9 2 ★ FINANCIALTIMES Monday 19 January 2015 Watches & Jewellery News Stanislas de Quercize plans to be daring putatcloseto35percent,thebrandwas “Since1847wehaveseenthatthere Interview alsothoughttobethemaincontributor arecyclesthatgoupanddown,but in a difficult market, writes James Shotter tothe$2.8bnoperatingprofitpostedby thereisapositiveendtoeverycycle,”he Richemontforthesameperiod. says.“Theintentofpeopletoacquire However,duringthepast18months, thebestisstillthere.” luxurywatchmakerssuchasCartier Indeed,despitetheheadwinds, havehadtocontendwithdifficult Cartier’schiefexecutivesees marketconditions.Thegovernmentin opportunitiesforthebrandtoexploit, China—amarketwhereCartierisvery insistingthatinterestinhigh-end Cartier on a strong—hasclampeddownonthe watchesandjewelleryremains practiceofgivingwatchesascorporate undimmedamongculturedconsumers gifts.ProtestsinHongKonghaveslowed withaninterestinart.“Ihavenever theworld’slargestSwisswatchmarket. seensomanymuseumsbeingbuiltas Andthereareearlysignsthatblowsto now.Ihaveneverseensomanypeople creative mission therouble,promptedbythefalling queuingupforexhibitions,”hesays. priceofoil,maybehavinganimpacton Onesourceofopportunity,Mrde theappetiteofRussianbuyers—whom Quercizereckons,isthegrowing tanislasdeQuercizeis asthe“mission”ofthe168-year-old analystsestimateareresponsiblefor numberofpeoplewhoownnotjustone planningabusystartto2015. maison,foundedinParisin1847bythe 5-10percentofhigh-endwatch butacollectionofwatches.Anotheris “Wearegoingtoputon110 masterjewellerLouis-FrançoisCartier. purchases. thejewellerymarket,whereCartierhas newcreationsatSIHH,”says “Mypriorityhasalwaysbeentobe “IthinkCartierisdoingwellin traditionallybeenstrong. S thechiefexecutiveofCartier, daringinhowwecreate,”saysMrde jewellery.Inwatchestheyaredoingwell Atthemoment,hesays,about90per thejewellerandwatchmakerownedby Quercize. atthelowend,”saysLucaSolca,an centofjewelleryproducedgloballyis Richemont,theSwiss luxurygroup. DuringMrdeQuercize’stenure,the analystatExaneBNPParibas.“Butlike unbranded.FromMrdeQuercize’s ExhibitorsattheSalonInternational Frenchbrandhasmadesubstantial Stanislas de Quercize: oversees what oneofanumberofinvestmentsthe everyonetheyarestrugglingwithgold perspective,thismakeslittlesense,and delaHauteHorlogerie(SIHH)include investmentsinitscreativecapabilities, analysts believe to be Richemont’s brandhasmadeinrecentyears. watchesandwatcheswithprecious hebelievesthatpersuadingmore Richemont’s11watchbrandsandfive followingthecoursesetbyhis most profitable brand “Wehavealsomademajor stonesbecausedemandforthesein peopletobuybrandedjewellerycould independentwatchmakers. predecessor,BernardFornas,whomMr investmentsinhautehorlogerie—we Chinahascometoastandstill.Thehigh paydividendsforCartier. Ondisplay,MrdeQuercizesays,will deQuercizesucceededin2013. nowhave29movementswhichare endcouldbecome[still]moreofa “Peoplewouldn’tacquirepaintingsor bethemostcomplexwatchCartierhas Previouslyhehadservedforeightyears entirelymadein-house,”hesays. challengeifRussianconsumersarehit apicturethatisnotsigned.Iftheybuy evermade—agrandcomplication aschiefexecutiveofVanCleef&Arpels, ThesuccessofCartieriscrucialfor bythefallinthevalueoftherouble.” unsignedjewellery,andthenwanttosell composedof578piecesthattookmore anotherhigh-endRichemontmarque. Richemont’sfortunes.LikealltheSwiss MrdeQuercizerefusestobedrawn itatauction,itwillnotbeworthmore thanfiveyearstodevelop(seepage3). Cartier’smostrecentinvestmentwas luxurygroup’sbrands,Cartierdoesnot aboutCartier’sprogressinspecific thanthevalueofthestonesandthe Cartierwillalsounveilasettingcalled amétiersd’artworkshop,whichopened ‘Since 1847, we have seen provideinformationaboutitsprofitsor markets,butdoesacknowledgethatthe gold,”hesays. VibrantforitsBallonBleurange,and inSeptemberneartheSwisswatch- cycles go up and down. The revenues.However,analystsreckonits uncertaintyaroundtheglobe“makes “IftheybuysomethingfromCartier, launchanewmontredeforme,calledClé. makingbastionofLaChaux-de-Fonds annualsalesarecloseto$5.9bn— peoplethinktwice”beforetheybuy. theyarebuyingsomething[froma TheblazeofactivityispartofMrde (seestorybelow).MrdeQuercize intent of people to acquire almosthalfthe$12.5bnturnover However,despitesuchpressures,he company]withahistorygoingback Quercize’spushtobolsterCartier’s declinestosayhowmuchCartierspent the best is still there’ Richemontachievedlastyear. remainsconfidentaboutCartier’s morethan160years.Theyarebuying reputationforcreativity,whichhesees ontheproject,butaddsthatitwasonly Withoperatingmarginsthatanalysts prospects. somethingwithprovenance.” High-tech workshop, 18th-century setting arrangement of work stations. Decorative techniques “Theycanseefromtheirbenchwhatthe others are doing. They are constantly In a converted farmhouse, meetingeachother,”hesays. craftspeople share expertise, Cartier’s introduction last year of its writes Nicholas Foulkes Ballon Bleu floral-marquetry parrot watch, with a dial made of tiny pieces of flower petals, is one example of the In the 1980s, Cartier watches were so brand’sdesignexpertise. popular that they were a favourite tar- “This year you will see filigree,” says get for counterfeiters. Alain Dominique Mr de Quercize. The technique of intri- Perrin, then chief executive, was photo- cateanddecorativemetalworkhasbeen graphed for the cover of Le Nouvel usedbyjewellersforthousandsofyears. Economistetakingahammertofakes. “It will be updated and innovated, The brand’s watches made at that clearly showing that there is no limit to timetendedtouseinexpensiveandreli- theaudacitytocreate.” ablestandardmovements. The watch is the Ronde Louis Cartier But about 10 years ago, Cartier XL with a design of filigree panthers, decided to become a vertically inte- perhaps not the catchiest of nomencla- grated manufacturer of timepieces. In ture, but a name intended to convey the past six years, it has launched 29 decorativeinnovation. movements and its manufacturing Cartier is not alone in facility in the Swiss watchmaking developingamétiers town of La Chaux-de-Fonds houses d’art. Vacheron stateoftheartequipment. Constantin, its Rich- This year will bring a compli- emont stablemate, cation launch that will add to haslongchampioned Cartier’s technical reputa- the use of decorative tion. But for now, the techniques old and brand is turning its new. attention to decora- Patek Philippe, tivetechniques. too, employs what At the end of it calls “rare last year, Cartier handcrafts”. In opened its maison the 1970s and des métiers d’art — 1980s when afacilitythataims many tradi- to be a centre tional skilled of both decorative jobs faced extinc- excellence and tion, the best practi- innovation. tioners of techniques The company has such as enamelling, renovated an 18th- engraving and bracelet- century farm build-