Jun 9, 2009
Van Cleef suffers less than market
Jun 9, 2009
By Astrid Wendlandt and Pascale Denis
PARIS (Reuters) - Van Cleef & Arpels has not seen an improvement in trading in recent weeks and does not expect sales to rise this year even though it will open eight boutiques, the French jeweller's chief executive said on Monday 8 June.
Van Cleef & Arpels
Sales have been impacted by the global downturn but to a lesser extent than the global branded jewelry market, he said, estimated by some analysts to have dropped by 15 percent since January.
The industry will eventually return to and even beat its historical growth levels reached in 2006 and 2007, Stanislas de Quercize told the Reuters Global Luxury Summit in Paris. But he could not predict the timing.
"I don't know when the rebound will be. The point is to be ready for it," he said.
Asked if sales would be lifted by its expansion plans this year, the chief executive said: "I am not planning on that. I am cautious."
The Paris-based jewelry house, part of Richemont group (CFR.VX), is known for its flowery pieces and, more recently, its dragonflies and butterflies.
In response to the difficult market, Quercize said the company was buying fewer gems and trying to avoid an inventory build-up by focusing on production on demand. It has also cut its advertising spend and introduced a hiring freeze.
Demand for high-end and entry-level pieces starting at 800 euros ($1,106) was stronger than for middle-range jewelry priced at between 10,000 and 50,000 euros, he said.
Van Cleef & Arpels plans to keep up its tradition of opening shops in times of crisis, just as it set up its first boutique in New York as World War Two started, Quercize said.
The company, which sits alongside bigger rival Cartier at Richemont, is planning to open shops in Kuwait, Jeddah, Bahrain and Milan after opening a boutique at the Neiman Marcus department store in San Francisco last week.
Van Cleef & Arpels was born out of the marriage of Estelle Arpels with Alfred Van Cleef in 1896 and set up a boutique on Paris' plush Place Vendome in 1906.
Quercize said revenue from watches, which made up a little more than 10 percent of turnover, had risen since the beginning of the year, countering a global trend that has seen a drop in sales of 20-30 percent since January.
Van Cleef & Arpels, which was the first jewelry house to create a perfume in 1973, called "First," plans to launch a new perfume in December in partnership with French company Interparfums (IPAR.PA).
Richemont shares closed down 3.3 percent on Monday 8 June.
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