HONG KONG: Luxury brands group Richemont is looking to consolidate its
US$20 million regional media account with one agency as it seeks
to establish a more cost-efficient buying platform.
Richemont is the world's second-largest luxury brands group after LVMH
and its proposed consolidation follows the completion of its rival's
consolidation with CIA at the beginning of the year following the
clinching of the Moet-Hennessy account.
Richemont owns 10 luxury brands, including Cartier, Baume & Mercier,
Alfred Dunhill, Van Cleef & Arpels, Jaeger-LeCoultre, Piaget and
Shanghai Tang.
It currently employs a roster of agencies. Motivator is believed to have
the largest chunk of the business from its handling of Cartier, which is
Richemont's biggest-spending brand.
Five agencies, including incumbents, were asked to pitch: Initiative
Media (Mont Blanc), Carat (Dunhill), Motivator, Starcom and OMD, but
after the first round only four were left standing.
The first round, in which agencies presented systems and procedures
which would enable Richemont to buy media more efficiently, took place
last month.
A second round of presentations is scheduled next month.
Sources said Richemont's move to consolidate the media account was not
sparked by LVMH's consolidation earlier in the year.
"It's more a question of getting more value for every dollar spent on
advertising to beat the current economic slowdown in Asia.
"But because they are using a number of different agencies to plan and
buy media, they have zero co-ordination and absolutely no synergy," one
source said
Another added: "It's a logical thing to do because all the brands
Richemont has are luxury ones.
"They might be in different product categories but their demographic
targets are largely the same and added to that is the fact that
Richemont handles a large number of watch brands."
Hong Kong is Richemont's biggest market in Asia, underlined by the fact
that its adspend in the city is just under half the regional total.
