Q&A: Karl-Heinz Handke, President (Western Hemisphere), Montblanc

'It's hard to find luxury retail space in India'

German luxury brand Montblanc has been known for generations as a maker of high-end writing instruments. In the past few years, it has expanded into accessories such as luxury leather goods, watches, jewellery, cufflinks and so on. It operates in over 70 countries and sells its products primarily through exclusive boutiques. Montblanc President (Western Hemisphere) Karl-Heinz Handke, who’s been responsible for the company’s expansion the world over, speaks to Amit Ranjan Rai about the brand’s values and its growth.

Montblanc is over 100 years old. What are some of the brand’s attributes and values that make it unique?
Montblanc was founded as a writing instrument brand 102 years ago and for a long time was only producing writing instruments. These have always been very special and different from the average day-to-day pens. The good old traditional craftsmanship of Montblanc has continued over the years. We don’t manufacture our pens with, say, robots in some exotic country. They are handcrafted in the same way, following the same process, as was done some 100 years ago. For instance, the nib of a Montblanc fountain pen is always polished by hand by a specialist who then tests it by writing with it, and hears the noise of the scratches and polishes it again to perfection. This is our philosophy: Produce all products ourselves and to perfection. Be it pens, watches or leather goods, we never buy products and put our label on them. When we manufacture a product we develop its knowhow, and that’s at the heart of our philosophy. So all the pens that we have produced over the years are from Germany and all handcrafted.

How has the brand evolved? It is no longer just a writing instruments brand.
Some 20 years ago, we came up with a philosophy we call “concentric circles” around writing instruments to carefully embark from the heart of business to new segments. As the first concentric circle we first made products that were very close to writing. For instance, leather goods were first, but only ones you can put a pen on, such as an agenda, small notebook or even a wallet which can hold a pen. The second concentric circle was leather in general but which goes well with the brand ingredient, that is, leather products that were masculine and black — the first Montblanc fountain pens were black.

The third circle was that of female leather goods which were a little more fashionable and colourful. The fourth was men’s accessories such as cufflinks and so on, after which we started watches and finally jewellery. We enlarged our product portfolio step by step and not like we woke up one morning and said we want to become a luxury brand. All this has been done in the past 15 years.

Has there been any change in the manufacturing of Montblanc pens?
The biggest change perhaps has been the introduction of the artisans’ studio where we make very personal pens. There have been many famous artists, actors, singers and so on who demand unique personal pens for themselves. An artist comes to our studio, tells us his life’s story and we design accordingly — a point in his life will be shown on the clip or ring of the pen, the nib will probably have his family signs and so on. A camera in the studio captures the entire pen-making process which the artist can watch live in his living room. This initiative of making personal one-of-its-kind pens has been very well received and there are a number of politicians, businessmen, artists, singers and musicians who are doing it with us.

We have been taking out limited edition pens — 20 to 50 for each edition. That’s already very limited. But there are people for whom this is not enough. They want personal, unique, one-only pieces for themselves. We have special craftsmen for such pens and everything is developed in-house.

How do you transfer brand values for writing instruments to other products, so that the Montblanc brand doesn’t dilute?
This was a challenge when we started with leather. We started producing leather goods at an exclusive factory in Germany but while we were producing exclusive pieces, we realised the highest creativity and know-how in leather comes from Italy and there was no match to it. So then we bought a small think tank — a know-how centre — in Italy. And today, we do all our leather goods in Italy. But again, we are Montblanc, we never buy leather products from others in Italy and put our label on it; instead, we manufacture everything ourselves. We always want to control the process and have our own craftsmanship.

The case is similar with watches. While a lot of watch brands buy their watch movements, we develop movements for Montblanc watches. Montblanc products have a soul of their own and craftsmanship is at the heart of it.

How do you plan to grow in the Indian market?
We will continue to open many more boutiques in India. Our world is a bit complex. There are different product families and our products need to be explained and displayed very well. We have limited edition products, expensive watches and female products which were not there a few years ago. We need a special environment for all these products, and only boutiques can best show the Montblanc range to the consumer. We are available with a couple of very well-known jewellers as well, but that’s it. We have a very selective distribution. While everyone cannot get to our products, we don’t want consumers to find it everywhere. It’s a high-quality luxury brand, and it needs high-quality luxury stores. That can be done best in our boutiques and a few very good jewellers.

What about multi-brand stores which sell luxury products in malls?
As long as it is a good jeweller, it could become a reseller, but we don’t want big distribution, we want to be special and under control. Also, it is a big investment for a jeweller to show our products as our range is not small. We have pens, watches, jewellery for both men and women; so it is a big investment and I don’t think there are too many jewellers who can invest in the brand in the way we want. Yes, there are new malls coming up and I’m happy to see that because today our biggest restriction is to find good distribution possibilities.

India doesn’t have a lot of luxury malls or luxury shopping streets. When you go to New York, you go to Madison Avenue, in Paris you go to Avenue Montaigne; in India there is no street you can go to. It is very difficult to find good space, or good retail shop; so this is why I’m happy.

So, is India a key market for you?
India is an emerging market with huge potential — it is going to be one of our core markets. We will continue to grow here much faster than the rest of the world for many years.

What are your retail plans for the country?
We currently have 16 boutiques and it’s not a secret to tell how many more we want, but we don’t know. I cannot say I want five more stores when I don’t find suitable space. We want to expand our retail network, open more boutiques, and have a priority list ready. For instance, we want a boutique in Kolkata, but we just could not find the right space. In Delhi again we want more boutiques; it is probably my number two priority. We need bigger spaces for the new boutiques so that we can create a better experience.

We have 16 boutiques located mostly in the metros. Today, we have a lot of boutiques in hotels and that’s because when we started a few years ago, there were no good malls. The malls are only coming up now. But at that time there were no upscale malls where you had other luxury brands. This is a precondition — we never want to be the best brand but we want to be amongst the best brands, which means there have to be other luxury brands. And that’s very difficult to find. Besides Emporio in Delhi I don’t think there is any other luxury mall in the country. There is UBS in Bangalore and we are there already. But we need good company. And that’s because if you have more luxury brands there, the right people will visit that mall. If you go to a mall where you have mainly cheap clothing and restaurants, the right people for our products may not come there.