According to Cartier, selling jewelry and watches in the middle of a crisis, not only economic but also social, is what its Chief Executive said “a positive sign for the future”. “In a context of crisis, or whether you buy the best or you buy nothing at all”, Stanislas de Quercize said after the opening ceremony of the latest and solo Cartier Store in Lisbon September 2013.
In 2009 Cartier closed its only store in Lisbon. The store had only lived for 10 years but with the financial crisis knocking at the door, the back then Chief Executive opted to close doors. Cartier claimed they had a new strategic realignment.
Four years after and with a new face as Chief Executive, Stanislas opts to invest in a country where unemployment is set (2012) to 15,7% (INE), -3,3% Real GDP Growth (INE), -0,9% Real Household Disposable Income (INE) and so on. With such constraints are we, Lisbon, his target? Are we willing to pay 500€ for basic cufflinks, the cheapest product inside the store? Will we opt not to buy in an apparel store and instead buy a ring?
Cartier Lisbon is situated in one of the most important streets, Avenida da Liberdade. It could be a strategic decision considering the high flow of tourists with high purchasing power in the area and to who the prices do not seem to ruffle. In the first six months of 2013, 41% of the tourists who asked for tax refund in eligible products for tax free were Angolan. It could be an indicator that maybe we, Lisbon, are not exactly the type of consumers that Cartier is trying to gain, but Lisbon as city of high cultural value and visitors with high purchasing power looking for luxury products. For Cartier, Lisbon is being a “platform” for Angolan buyers for example, without the risks of the Angolan market.
On the other hand a rich consumer, Portuguese or foreign, can opt to buy these luxury products and see them as savings. In the long run a gold ring can be more valuable than today. I may opt to consume today and sell in the future in case I need.
This luxury goods market it’s been growing in and outside Portugal. People want to buy luxury goods as if a social status, as savings, or just because they want and can. During crisis the rich are not spending as willingly as they were before but they are approaching the height of that cash flow. We can look at the numbers in order to recognize the trend. The Suisse Group Richemont, which detains Cartier and many more, has reached an increase of 30% in profits (end 2012), and Cartier along with Net-à-Porter was responsible for 35% of that increasing. Also worldwide brands are targeting Portugal as an intermediary to enter new markets, new clients.
Cities such Lisbon may be their hope to gain market in such wanted emerging countries. We sure can take advantage of worldwide brands investing in our country during crisis, it can boost confidence and attract visitors and investors. Let the success of this opening be a good indicator that Lisbon/Portugal is also a market for powerful brands and therefore wallets.