Montblanc Confronted with“China Problem”.docVIP

Montblanc Confronted with“China Problem” The luxury goods industry which has been used to the massive spending now has to endure the impact from the Chinese market. The impact comes from the Chinese government’s orders of limiting the“public spending” and cracking down on the corruption. How to streamline and fortify themselves in the new mar- ket situation has become a problem for them. Montblanc， a German luxury brand that started with luxury pens， is a victim of the impact. It is known that its business dropped 70% compared with the year of 2007 when it started its business in China. In addition， the company is also haunted by the internal HR management defects， the infestation of smuggled products and other problems. Presently， Montblanc， which is a part of the Switzerland-based Richmont， contributes 7% of the total sales volume of the Group. Falling Business In 2007， Montblanc established its first flagship store in Shanghai. At that time， no one would expect that the number of employees of this store had reduced from 30 to 20 seven years later， and the business dropped 70% compared with 2007 or went down 20%-30% in 2012. An experienced employee with this flagship store said that the company even received the prompts from the property owners， urging them to pay the rents， electric power and overdue fines for three months that amounted to 1 million yuan. This flagship store might be the epitome of Montblanc’s business in China. Actually， this German brand has had three CEOs for its business in Greater China since 2007. The mid- and high-level management also went through frequent changes as well. The frequent personnel changes are rare to see in the luxury goods industry.“The headhunters would not come to Montblanc for talents，” the aforementioned long-term employee said. The working experiences with Montblanc would add no value to the employees’CVs， which is no longer a secret in the luxury goods industry. But staying with Montblanc seems to have no benefits ei