Jeweler to the 0.1%

The Cartiers: The Untold Story of the Family Behind the Jewelry Empire, by Francesca Cartier Brickell

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Few family names are as closely associated with luxury as Cartier.  Since the firm’s founding in Paris in 1847, Cartier established itself as one of a small handful of trusted jewelers to the wealthiest men and women in the world.  If you want your consumption to be truly conspicuous, few extravagances fit the bill better than expensive jewelry.  For decades, Cartier nurtured a global reputation for creating extraordinary jewels coveted by those with a taste for (and financial wherewithal to acquire) the finer things.

Cartier descendant Francesca Cartier Brickell has written an exhaustive account of the Cartier business as it passed through four generations of the family over approximately 125 years.  The business grew steadily as it passed from founder Louis-Francois to his son Alfred, eventually landing at its prime location at 13 Rue de la Paix in Paris.  Alfred had three sons, and it was with the ascendancy of eldest son Louis, and his brothers Pierre and Jacques, that the business became a global force in the luxury market.  Under the stewardship of the three brothers, Cartier’s reputation for leading-edge design and quality craftsmanship enabled them to establish two successful branches in London and New York.

Armed with a vast collection of correspondence among the third generation brothers, supplemented by conversations with her grandfather, Ms. Brickell’s book conveys the challenges of managing a global enterprise through political revolutions, two world wars, and a global economic depression.  The book, at its heart, is a family biography rather than a business one, yet amid the discussions of famous jewels, family weddings, and design breakthroughs, the ever-changing fortunes of the family business remain squarely in view.  Clocking in at over 650 pages, this is not a book for the easily distracted.

From the vantage point of readers more interested in family business than high-end jewelry, the Cartier story illustrates four basic lessons for family businesses.

Brand & reputation are worth protecting.

In our experience, family businesses tend to guard their brand and reputation more closely than non-family businesses.  While the Cartier brand became synonymous with luxury and unique design (one family mantra was “Never Copy, Only Create”), the Cartier reputation for discretion, dependability, and fair dealing were the most important building blocks for the company’s growth.  The maharajas, sultans, czars, and other assorted royalty of the world demanded personal attention and discretion.  Alfred Cartier and his sons cultivated those relationships and won the trust of the wealthiest jewelry customers.

The sibling-to-cousin transition takes a lot of work.

Despite living in three different countries, the personal and business bonds among Louis, Pierre, and Jacques proved unbreakable.  The brothers coordinated with one another closely to ensure that their global clientele perceived the Paris, London, and New York maisons as a unified business.  Their children, on the other hand, were essentially strangers to one another, having no meaningful shared experiences from childhood.  As a result, when the third generation brothers passed from the scene, the fourth generation cousins had virtually no social capital to bind them together.  What had been a unified global business quickly became three distinct businesses pursuing three different strategies.

Environmental changes require adaptations in the family’s business DNA.

The Cartier business ethos took shape during decades in which the Romanovs in Russia, the various maharajas of India, and the Windsors in England had, for all practical purposes, unlimited resources and a desire to own ever more expensive jewels.  Following the geopolitical convulsions of the first half of the twentieth century, the demand for Cartier jewels had shifted dramatically.  The values and philosophy that had served the family business so well for many years could not carry the firm forward in a post-World War 2 era of economic austerity and changing consumer preferences.  Curiously, the brand did survive, but family ownership did not.  In part, this was because the family was unable to adapt, or find a new “Cartier” way of doing business, in response to the new global landscape.

Buy-sell agreements really do matter.

The most frustrating aspect of the book for us was the relative silence around key legal and accounting matters.  Either the information was not available, or Ms. Brickell correctly surmised that such details wouldn’t really sell books.  In any event, we do learn that the Paris, London, and New York maisons were established as separate corporations.  Perhaps this was standard practice at the time, or there was simply no other way to conduct business on a global scale in those years.  Regardless, despite some measure of cross-holdings, Louis owned a controlling interest in the Paris business, Pierre in New York, and Jacques in London.

During their lifetimes, the arrangement worked well enough under the brothers’ verbal agreement that the business would operate under a unified strategy and that the business would remain in the family.  This worked until it didn’t anymore.  When the fourth-generation Claude Cartier sold the New York branch, his cousins first heard about it in the newspaper.  Amid a challenging market for luxury retailers, this sale virtually guaranteed the end of family ownership across all of the branches.  Within a decade, the Paris branch was sold, and with the 1974 sale of the London branch, Cartier was no longer owned by any Cartiers.  Again, the book is short on financial details, but it seems pretty obvious that the individual transactions were not negotiated from a position of strength for the sellers, and one suspects that a single transaction following a disciplined sale process could have yielded a better economic outcome for the family.

The Cartiers offer readers an intimately-drawn account of a remarkable family that created a durable luxury brand.  The family’s experiences provide both a roadmap and cautionary tale for other families that aspire to carry on – and pass on – the legacy of their own family business.