Chanel, founded by designer Coco Chanel, has pushed by a number of the sharpest value will increase within the luxurious trade lately, main some clients to complain of a disconnect between value tags and product creativity and high quality.
For instance, the value of a basic Chanel flap bag has greater than doubled to high €10,000 (US$11,320; S$14,627) since 2019, in contrast with a 50 per cent rise within the common value of luxurious items, based on analysts at HSBC.
Chanel’s international chief monetary officer Philippe Blondiaux pushed again in opposition to the concept value will increase had dented gross sales, saying that he believed customers “completely perceive that the value of the Chanel gadgets they purchase is commensurate with the standard of the uncooked supplies”.
He added that Chanel raised costs by about 3 per cent in 2024 on its so-called style merchandise, and costs would most likely rise by the same quantity this yr.
Chanel’s weak outcomes underscore the challenges dealing with newly appointed artistic director Matthieu Blazy, previously of Bottega Veneta, who began in April. Blazy will current his first assortment in October.
Regardless of its struggles, Chanel invested at document ranges final yr. Capital expenditure, together with spending on retailer acquisitions, elevated 43 per cent to US$1.75 billion.
The corporate invested in silk producer Montero, a steel jewelry maker and tanneries as a part of a 10-year challenge to manage extra of its provide chain. The home additionally spent US$2.4 billion on so-called model actions, akin to style reveals and occasions for purchasers.
Blondiaux stated the investments had been being made in order that Blazy arrived with the “absolute best circumstances”.
The group is planning to make one other US$1.8 billion of capital expenditure this yr, in addition to a “document” US$600 million spending on additional integration of its provide chain, Blondiaux added.
“We’re financially strong, and now we have a long-term view and long-term strategy to every thing we do,” he stated.
Few luxurious teams have managed to come back by the trade downturn unscathed. Gross sales at trade chief LVMH declined 2 per cent final yr, whereas Kering’s gross sales slumped 14 per cent due to weak demand at Gucci.
Nevertheless, different top-end manufacturers in the same class to Chanel — together with Hermes and Brunello Cucinelli — each grew gross sales by double digit percentages final yr.
Adrienne Klasa © 2025 The Monetary Occasions.
This text initially appeared in The Financial Times.
