At the beginning of the month Chanel (@chanelofficial) inaugurated its Spring/Summer 2024 ready-to-wear collection, projecting us into the modernist villa Noailles in Hyères. The show was a picture of an easy-living French vacation, where all the main codes of the fashion house came back in the runway, with particular attention to marinières, present in every shape. Despite being criticized for not evolving Chanel’s legacy and just following Lagerfeld’s imaginary of the brand, Virginie’s Viard collections seem to be quite profitable.
Talking to @voguebusiness, Chanel global CEO Leena Nair, who joined the company in January 2022, underlines how Chanel’s revenues reached $17.2 billion in 2022, up 17 per cent versus 2021, with Europe being the region witnessing the highest growth. Nair claims that this performance is due to a strengthening of Chanel’s brand equity, with ready-to-wear continuing to be one of the leading product lines.
However, it is necessary to point out the profound spike in prices that Chanel had between 2021 and 2022, especially for handbags. According to the company’s CFO Philippe Blondiaux, this pricing strategy is mainly caused by inflation affecting the prices of raw materials and the brand’s ongoing price harmonization, which takes currency changes into account. Effectively, the September price increases varied widely depending on the country, with Taiwan and Australia on top, with 8% increase from last March. In other words, a combination of increased unit sales and higher prices is probably what helped the fashion house boost sales and face the most recent luxury slowdown.
As for the future, Nair wants to reinforce their core brand identity even more, since being true to themselves is the only and most effective way to remain relevant. That’s the main reason why expanding into e-commerce is not on Nair’s agenda, making Chanel one of the very few luxury megabrands still not selling fashion online. Even so, online shopping is a key part of their business strategy, particularly in relation to fragrance and beauty sales. In addition to this resolution, unlike many other brands owned by LVMH and Kering, Chanel is not thinking about expanding in the hospitality/food sectors, nor introduce a menswear category.
All these decisions strongly demonstrate Nair’s intention to remain true to the spirit of their founder.
Even if Chanel is still considered the epitome of French luxury, having its undisputed allure à la française, not many know that today the company is essentially British.
According to Glitz Paris, Chanel’s altered national identity was only finalized in the second quarter of 2022, when the group’s main shareholder Alain Wertheimer became president of the board of directors of Chanel Ltd, the former British subsidiary which is now the luxury group’s parent company. After six years of reorganization, Chanel Ltd now controls all of Chanel’s global subsidiaries and by 2025 is going to expand its global headquarters in London’s Mayfair. Through its spokeswoman, Chanel has denied that this move to the UK was to capitalize on Brexit, telling Glitz that it chose to set up in London because the city “was the right place for an international company”.
Bruno Pavlovsky, president of the French subsidiary Chanel S.A.S, is now the only director of Chanel Ltd residing in France: of the eleven other members of the board eight are British residents, and the others are split between Switzerland, Singapore and the United States, where Alain Wertheimer lives.
It is not too bold to say that despite all the initiatives and contributions to the preservation of its French intangible cultural heritage, such as the launch of a chair dedicated to artisanal craftsmanship at the French fashion institute, the Institut Français de la Mode, Chanel’s move across the Channel is at this point inevitable.
By Luca Prosdocimo
