The Indian prime minister Jawaharlal Nehru, actor Nicolas Cage and top model Naomi Campbell are among the rich and famous individuals who owned Montblanc, the pens by the maker that has transformed itself into an internationally known luxury goods brand.

As any aspiring entrepreneur will tell you, creating an upscale brand from scratch is a tough task. While it’s true that Montblanc pens have been an everyday accessory for the discerning consumer since they first appeared in Hamburg at the beginning of the last century, it is only in the last 15 years that the company has plunged into segments like leather goods, watches, and more recently, fine jewelry. Today Montblanc is the fastest growing brand of South African parent group Richemont, which also owns Cartier, Dunhill and Jaeger-LeCoultre, located in Switzerland.

Rita Clifton, head of the Interbrand consultancy in London, believes Mont Blanc conforms to all the prerequisites to become a leading player in a segment of the market that is already crowded with heavyweight competitors such as LVMH, Tiffany’s and Gucci, to name but a few.

Clifton says: “Mont Blanc designers are renowned for their craftsmanship – a “must” if you want to sell goods for premium prices. Secondly, the customer experience is tightly managed; products are sold in places which reflect Montblanc’s brand. It would be pointless, for instance, to make goods available in shabby premises that could damage the way the reputation is held.”

“Finally, the Mont Blanc management has brought celebrities on board, and that matters: when James Bond drives an Aston Martin or a BMW in one of his films, people remember it. When brands are flaunted by footballers, their wives or by film stars, it’s a stamp of approval. Brands are status symbols, after all.”

Life hasn’t always been easy for Montblanc pen company. When managing director Lutz Bethge joined in 1990, the company was facing harsh competition and shops that stocked Montblanc pens were being pushed out of plum positions in shopping centers as Bulgari, Louis Vuitton and Burberry occupied the most prominent positions.

“Things had to change,” remembers Bethge. The upshot was a strategy, developed in conjunction with former Montblanc chief executive Norbert Platz, to turn the firm into a diversified luxury goods company. The fountain pens became even more upscale, with limited editions selling for up to $125,000. Montblanc also tightened its grip over its distribution retail chain by expanding its network of shops around the world. They now own more than 330 in countries stretching as far as China, Japan, Italy and of course the Northern America. From being a predominantly German company – with its headquarters in Hamburg – today most Montblanc profit is generated abroad.

Bethge says the brand is committed to the highest standards of European craftsmanship. “I cannot envisage a time when we would shift production to low-cost markets in Asia or elsewhere,” he says. “I am not saying that Asians don’t make good craftsmen, but the heritage is in Europe. One of our trainee employees must practice for half a year making brass nibs for our pens before he can graduate to making gold nibs – we are that specialized.”

A similar approach is employed when it comes to making watches: Montblanc launched its first wrist watch range in ’97, and opened a factory in Switzerland the same year. “It had to be Switzerland,” says Bethge, “because that is the country most associated with the manufacture of branded, high-class watches. And the expertise is Swiss.”

There’s not a secret in that Mont Blanc hosted a VIP gala in Chamonix in the Swiss Alps to launch its gold and diamond jewelry range. Model Naomi Campbell presented the most precious offering: the Etoille necklace (“star” in French). Guests including Mick Jagger’s former wife Jerry Hall and Phil Collins’s daughter, Lily, were among those who attended the concert by Bryan Ferry at a posh meeting.

The Mont Blanc pen brand, it seems, is going places. In just over a decade, it has pushed its way into new markets – leather goods, i.e. belts, bags and penholders, sunglasses, watches (there are several lines) and now silver and fine jewelry. But how much of the Montblanc story is hype?

None of it, if you ask the investment houses that follow Richemont in Europe. Antoine Colonna, luxury goods analyst at Merrill Lynch, says: “One day, Montblanc is going to outsell Cartier. Few brands that I follow – possibly with the exception of Burberry – have done as phenomenally well in the last five years.”
Just to remind, Cartier is part of Richemont group as well. According to 2006 stats, Montblanc produced the most of the profit amongst other businesses inside the group.
Isn’t it fabulous to see the achievements of a small company that started its living with fountain pens?