Does Chanel’s Stance on E-Commerce Make Sense? | This Week in Fashion, BoF Professional

The pandemic hit fashion’s biggest luxury players hard. But it hit Chanel worst of all, according to figures released by the French luxury giant this week.

The company’s sales sagged 18 percent last year, slightly under-performing LVMH and Kering and significantly lagging accessories powerhouse Hermès. It’s the first time the privately held Chanel has failed to record double-digit growth since it started publishing financial results four years ago. Operating profit plummeted 41 percent.

Like its luxury rivals, the company suffered as stores closed in key markets and normally high-spending international tourists were grounded. Chanel was particularly vulnerable because a comparatively large proportion of its business is driven by sales of cosmetics and perfume that were hard hit by the decline in travel retail.

But the company faced another handicap: unlike brands such as Dior, Louis Vuitton and Gucci, Chanel doesn’t sell its core fashion and accessories products online, so when

Read More

In a year of lows for luxury, Chanel’s spending on itself reached new highs.

Chanel, the French fashion house known for its No. 5 perfumes and quilted leather handbags, spent record amounts maintaining its stores, supply chain, advertising and fashion shows in 2020, despite the strain of pandemic lockdowns and sales volatility in one of the most tumultuous years in retail history.

The company said Tuesday that revenue for 2020 was $10.1 billion, down 18 percent compared with the previous year. Operating profit fell 41.4 percent in the same period, to just over $2 billion. But unlike some industry rivals that were forced to slash costs last year, Chanel spent $1.36 billion on “brand support activities” like advertising and runway shows, and $1.12 billion on capital expenditure investments such as the acquisition and renovation of its boutiques network, new offices and the ecosystem of small artisanal workshops that produce its luxury wares.

“One of the luxuries of being a privately owned luxury company is

Read More