No to the online. Yes to exclusive stores for VICs or Very Important Clients. A decisive No to any variation to the company’s capital structure, which remains firmly in the hands of the Wertheimer family. And a decisive yet to another potential price increase. The latter is mainly to thank, when it comes to the results obtained by Chanel in 2021, compared to 2020 and 2019. Chanel beats all others with “results” that are diminished just by the use of the word. The French brand literally took off, maintaining a double-digit growth rate in the first 5 months of 2022 as well, thanks to the staggering performance on all marketplaces around the world that is also compensating the closed down stores in China and Russia.
Chanel beats them all in 2021
“We trust we can achieve another year of solid performance and healthy growth”, said Philippe Blondiaux, CFO of Chanel, also explaining how, during April, and even with a hit from China, the luxury brand managed to show an overall two-digit growth overall. Details from Chanel’s 2021: record revenue of 15.6 billion euro (+46.9% on 2020 and +23% on 2019). Operating profit nearly tripled (up 170%) to 5.5 billion euro.
More volume and higher prices
The growth commented by Blondiaux came thanks a “balanced” mix of price increase and higher volumes. After the pandemic, Chanel repeatedly upped its price tags, justifying the actions with currency volatility and higher costs for materials and labor. A trend that appears to be continuing: Blondiaux said it himself to WWD. Simply put, Chanel will continue modifying prices based on currency exchange fluctuations and inflation. “Usually, we increase our prices twice a year. It’s what we have always done and will continue to do”, he said, without mentioning a potential backlash from customers.
Private stores for VICs
With regards to prices and customers, based on what reported by Business of Fashion, Chanel plans on opening private stores for VICs only. The brand will start with Asia in the first few months of 2023. Chanel wants to hire 3,500 new employees, many of which in retail sales. Lastly, Blondiaux repeated once more two statements: first, that Chanel will continue to not use the online channel; and second that the brand isn’t thinking of neither selling nor having an IPO. “Our model is so strong, so why would we change our path?”