It’s approaching 6pm after a busy day and Nicolas Baretzki still has a big evening ahead of him. He’s finishing up the last of several media interviews and then it’s the official opening of Montblanc’s remodelled boutique in The Dubai Mall.
It’s a special occasion as the branch, located next to Bloomingdale’s in the mall’s Fashion Avenue, has been transformed into what Montblanc calls a ‘High Artistry’ boutique. “We have only 12 in the world and Dubai Mall, specifically, is one of these,” Baretzki, appointed CEO of Montblanc International in April, says.
“Why High Artistry boutique? In the key international cities of the world, we want to have one boutique that celebrates not just all the categories of Montblanc that we have, but also showcases the exceptional pieces of the Maison. And that’s why we call it ‘High Artistry’ because it relates to all the high-end pieces that we manufacture. We will have a permanent collection in The Dubai Mall boutique of these exceptional pieces.”
To demonstrate, he leans over and picks up such a piece from the table in front of him. The object, which Baretzki is careful to handle with a soft cloth, is a diamond-covered pen, named after Hannibal, the 3rd Century Carthaginian general who challenged the might of the Roman Empire. “This is the kind of amazing, exceptional and unique piece you will be able to find here,” he says, cradling the pen as if it were a rare find, which of course it is.
The Dubai Mall branch, he continues, has earned High Artistry status because it is always in the company’s top five performing boutiques worldwide. The people who shop there come not only from Dubai, but from the wider Middle East, India, Europe and China, reflecting Dubai’s status as a travel hub.
Montblanc uses quality calfskin, deerskin, lambskin or southern German cowhide in its products
“It really is a place where you gather most of the nationalities and cultures,” Baretzki says. “Montblanc is not a luxury brand for one market; we are in more than 130 countries today and I think Dubai is a place to capture those clients.”
Analogue in a digital world
Baretzki joined Montblanc in 2013 as executive vice president of sales and became CEO earlier this year. He previously worked in other divisions of the Richemont Group, including Jaeger-LeCoultre and Cartier. As a new CEO, what is his brief from the owners of Richemont?
“We are a complex Maison because we deal with many different categories of product, many different price positions, different channels, a large boutique network, we’re very active in e-commerce and digital. I think the main message is, ‘You’ve got to take care of that complexity, but you also have to be a little daring’ because the success of Montblanc has always been to innovate and to bring in new ideas, categories and products.”
In line with the theme of innovation, Montblanc has recently introduced its first ever smartwatch, the Summit. The watch carries the design hallmarks of a Montblanc watch, yet is equipped with an Android operating system and a complement of useful apps, including Runtastic, Google Play, Google Assistant, Uber and Foursquare.
The product reflects another of Montblanc’s current key strategic objectives, which is to develop products that marry the analogue and digital worlds. So too with the company’s Augmented Paper product. “It is keeping the tradition of writing – so you have the beautiful stationery, the nice leather envelop and the fine writing instrument – but when we write, by the push of a button you transfer all the content into a digital format,” Baretzki explains.
“We’re still keeping what Montblanc is about, the tradition, the luxury and the quality, but bridging it with the digital world. It’s about understanding what is out there today in the world, and rather than trying to say, ‘I’m traditional, I don’t want to touch this’, it’s having the right answer from a Montblanc perspective.”
Another recent move was the relaunch of the TimeWalker collection, one of the company’s bestselling watch lines, with a complete redesign. This was supported by a launch event at Goodwood, a Hugh Jackman sponsorship, an advertising campaign, new point of sale materials and training.
Montblanc’s $1.8m diamond-encrusted pen pays homage to Carthaginian general, Hannibal Barca
Baretzki has been at Montblanc for four years and stands wholeheartedly by the strategy pursued during that period, which is to, “create and innovate and drive and dare”. He is firm in his belief that Montblanc, above anything else, stands for value for money. This, he believes, makes Montblanc relevant for collectors and VIPs looking for very high-end pieces, as well as a consumer buying a special gift as a graduation present. “We don’t compromise when it comes to design, quality and manufacturing,” Baretzki explains. “We always want to be accessible, but at a level where a customer feels they get real value for what they spent. It’s not a question of price, it’s a question of value for money in the segment where we are.”
The CEO sees the high-end segment of Montblanc, characterised by products like the Hannibal writing instrument, as a great opportunity for the company. Products will be developed that carry clear themes and have a story behind them. The remodelling of The Dubai Mall branch as a High Artistry boutique offers a platform in the region for directly showcasing and explaining the high-end collections to high net worth individuals.
At the same time, with a customer base of several million people around the world, Baretzki feels Montblanc can do even more in its core area of leather goods.
“In the past, we’ve been known more for the smaller goods, with a lot of gifting,” he says. “We are seeing more and more that customers are coming to the Maison to buy for themselves and the larger goods represent a big opportunity.”
The company has recently shaken up the leather category by introducing its 1926 Heritage collection. This range of around 16 pieces goes back to the future by using vegetable tanning. Baretzki jokingly calls the process “slow tanning” because it is long and challenging. The end result, however, is a range with a distinctive look that drums up renewed interest in a well-established category.
Controlling supply
Montblanc has embraced online sales as a way to build market share and reach new customers. Baretzki supports this approach, saying online is very important for both Montblanc and its customers.
Almost everything is sold online, except for a small number of high value pieces that need to be viewed in person by buyers. Montblanc also supports third party web sites that sell its products.
Fragrances are among the most popular offerings at Montblanc
While third parties will control their own pricing, Montblanc does not discount online or in its own boutiques. The company is particularly keen, the CEO says, to ensure that anything it sells through its own channels costs the same worldwide before local taxes.
“I think what is important is to be able to assure the client that whether they buy in Dubai, or in Japan, or in Europe, or in America, they’re not going to pay extremely more or extremely less for no reason,” Baretzki says. “We are very careful to have very fair pricing, so that wherever you are in the world, depending, of course on the tax, you have more or less the same pricing.”
That would mean customers coming from Europe, where 20 percent sales tax is common, should even find prices in the GCC, which hasn’t yet imposed sales tax, to be lower. That will be very welcome news for consumers in Dubai, who often feel that they pay too much for imported products, particularly those with high sticker prices and lower volumes.
“If I live in Europe, it will be cheaper for me to buy in Dubai than in France,” Baretzki pledges.
While third parties that sell Montblanc products set their own pricing, Baretzki says Montblanc asks them to, “respect the value of the products and I see a lot of respect for presenting the product before presenting the price.”
Generational change
While his outlook is positive (and Baretzki describes himself as, “a very positive guy”) he acknowledges potential challenges ahead. He says he is often asked about the long-term outlook for the writing instrument category, a key market segment for Montblanc. Specifically, will the generation known as millennials even continue to buy writing instruments in the future?
Montblanc’s job, he explains, is to remind people that you don’t buy a nice pen simply to write, just as you don’t just buy a nice watch to only tell the time. “There are other reasons for it and I want to make sure people feel that the writing instrument is a clear expression of who you are, is a clear expression of your substance, the fact that you are a cultivated person, that you know the story behind the product… and that, I think, will be a challenge.”
Each leather piece is created by hand by Montblanc’s master craftsmen in Florence, Italy
Montblanc does not share sales figures, but Baretzki is quick to point out that there has been no decline in sales of pens yet. Rather, the company is thinking ahead and trying to pre-empt something that could be a challenge later.
“It’s just a concern for now, but it’s a very important category, a volume category,” the CEO explains. “Every year, you need to recruit a lot of new customers and every ten to15 years a new generation comes through. We have what it takes to adapt and be succesful, but we also have to face the reality that this could be a challenge, so better to address it beforehand than realising when it’s too late and it’s already happened.”
Could such a fate could also befall the watch in the age of smartphones that can do everything? “Smartphones have been going ten years and the watches ten years later are so much more successful than they were ten years before,” Baretzki says. “The watch is an item that, as a man, is almost the only object I have. I think that’s something that will remain and it’s also about sophistication, it can be about functionality and so on, so I’m not worried about the disappearance of watches.”
The company has, however, released the Summit range of smartwatches. Similarly, the Augmented Paper product keeps the traditional pen and paper, but turns a person’s scribblings into text on a paired smart device.
Baretzki says the company’s current innovation strategy will continue despite the outlook (whether positive or negative) for the economy. He looks at success in terms of market share and performance relative to competitors. Montblanc has been successful over the last three to four years and has plenty of room to grow.
“We have so much opportunity at Montblanc to accelerate in entry level, high-end and limited edition,” he says. “We are more resilient than other Maisons.
Despite seeing rather good signs of a performing market in the coming months, Baretzki, like many people of a certain age, is well aware of what happened in 2008 when economies tanked literally overnight.
“If we had that discussion [about the economy] in August 2008, one month later the answer could have been so different,” he says. “I don’t look too much into these things.”
Playing for the team
Baretzki appears to be one of those CEOs who is doing something he really loves. He was born into a family of watch and jewellery retailers in Paris and has always been passionate about the luxury world. He holds a Masters’ Degree in Finance & Auditing from Ecole des Hautes Etudes, Paris and started his career as an auditor at Deloitte.
Montblanc has delved into the smartwatch segment with its Summit model
At Montblanc, he loves being able to work on a vision and thinking about where the company can go over the long term. “I’m really a team player and we have a really close team; many that I’ve been working with for many years and you were asking ‘why Dubai?’ Besides being here for the opening of the boutique, I brought the whole executive committee so that we could all start thinking of the future together… and be in the market with clients, interacting. I think that’s a great source of inspiration. I like to interact, I love to work with people that know more than me or that are better than me in certain areas so that I can learn and grow.”
Asked to describe a typical day, Baretzki jokes that he wakes up very early and gets home very late. He used to do a daily to do list, but stopped when he realised there were too many things still outstanding on it at the end of the day.
Now, he focusses on trying to learn something each day. “I look at the day and ask what was a good idea today. When I wake up in the morning, I always think, ‘What will be the new opportunity today, what can I learn, what can I create?’”
“The biggest challenge of the position of a CEO, if I may say as a new CEO, and I say it with humility because it’s not like I can reflect on the last ten years of my job as a CEO, is finding the time to extract yourself from operational things and force yourself to spend time thinking of the future,” he continues. “Anticipating and not being overwhelmed by the daily operations.”
Baretzki loves to travel, something he says actually helps him relax. “Because I’m curious, you see new things, my head is occupied. For me, that’s the best way to relax.”
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