Shining stars

On October 25, Shanghai was illuminated by movie notables and celebrities, but possibly most dazzling of all, by diamonds.

Thirty-five media stars from both home and Hollywood attended a party by Montblanc in the nation's most international city. The majority were female celebrities.

Hollywood actress Hilary Swank wore Montblanc's latest in its collection, Lumiere, a briolette-cut necklace with 380 carats of diamonds. The largest single stone weighed 11.88 carats.

The traditional masculine brand termed the party "a tribute to women", announcing its determination to expand into women's business as it continues to grow beyond its traditional roots of making and marketing quality writing instruments.

Today sales of classic fountain pens account for half of its business worldwide, compared with 100 percent in 1990 and 70 percent in 2000.

"In the next three to five years, the writing business is expected to drop to a 30 percent share, while the categories of leather, jewelry and watches will take the rest," says Lutz Bethge, CEO of Montblanc International GmbH. "Jewelry and watches will overtake writing instruments to be the strongest category in Montblanc in a couple of years."

Bethge explains that the first 100 years of Montblanc's history was devoted to writing instruments, which helped the brand build its image of masculinity, but the timeless, clean designs and long-lasting characteristics now attract more and more ladies.

Over 40 percent the traffic in Montblanc boutiques is now women. While most of them shop for men - husband, boyfriend or business clients - women have started to look for something for themselves.

"About 20 percent of our turnover worldwide is now from purely ladies products," Bethge tells China Business Weekly.

The company will be dedicated to watches and jewelry, and in particular to ladies' products, he says, but rules out the possibility of entering the fashion business. Montblanc's image is timeless and long lasting, while the fashion trade needs new designs every two or three seasons - which does not fit with the brand's approach, he says.

Bethge notes the company has given large amounts of guidance to design studios for women's handbags, fine jewelry and watches.

The firm first launched silver jewelry two years ago targeting successful, self-confident women who want to treat themselves with something moderately priced.

Last year, the company stepped into the fine jewelry sector by producing its patented Montblanc Diamond after eight years of research. It has 43 facets cut in the shape of the Montblanc star with a second star deep at the bottom of the diamond itself, allowing the light to dance inside, creating exceptional fire and sparkle.

The diamond crowns all of the company's centenary pieces and is the centerpiece of its newly introduced jewelry collections.

Of the famous "4Cs" of a diamond - carat, cut, color and clarity - only the cut is man-made, and can determine the stone's brilliance. Most experts consider cut the most important characteristic, because even with perfect color and clarity, a diamond will suffer dulled brilliance from a poor cut.

Besides being bright and elegant, Bethge points out diamond jewelry is discreet. "Our designs do not shout loudly. They are only for those who know the brand and design," he says.

Montblanc's tribute-to-women strategy has also been implemented in China through opening bigger stores of an average size of 300 sq m to display the full assortment, especially ladies' products.

The company opened its largest boutique in the world in Shanghai late last month and is expanding its current store at Beijing's Oriental Plaza to more than 400 sq m. In Shenzhen, it is building an outlet with two floors.

The company currently has 50 wholly owned stores and 50 franchise outlets in China. Two years ago, when it established its own subsidiary in Shanghai, it decided to reclaim some franchise stores from local partners. At that time there were over 100 franchisees.

The company closed some and transformed some into wholly owned shops, which Bethge claims was a very good strategy.

"Sales here are growing phenomenally. In 2005, China was not among the top-10 markets for Montblanc. Last year, it joined the top five, and this year it became one of the top three, following the United States and Italy," Bethge says.

"In five years' time, China will be Montblanc's largest market."

Bethge also attributes the brand's success to being early in China. Since entering the market in 1990s, it did not just focus on big cities like Beijing, Shanghai and Guangzhou, but also expanded vigorously into almost all provinces, including Heilongjiang Province and Xinjiang Uygur Autonomous Region.

(China Daily 12/01/2007 page7)