No online sales, no tourist flows. The result is a -18% loss in 2020 for Chanel. But, following the wave of luxury restart, it rebounds in this first part of 2021. In other words, it shows a “double-digit” increase in sales, compared to 2019, in the first 5 months of the year. “Since September 2020, we have seen fantastic momentum, which this year is further accelerated,” said Chief Financial Officer Philippe Blondiaux. Which, for the umpteenth time, has returned to the sender all the allegations relating to the possibility that the brand will lose its independence.
2020 down
Chanel lost 18% of revenues in 2020, closing the year at 10.1 billion dollars. Operating profit fell by -41%, to a value of 2 billion dollars. In other words: Chanel lost more than its competitors. Why? There are two main reasons. First: greater exposure in the “perfumes and cosmetics” sector, whose sales (which, according to estimates, are worth a third of the brand’s turnover) have collapsed due to the drastic reduction in travel retail. Second: the refusal to sell fashion products and accessories online. “Our boutiques and our fashion consultants are at the heart of our strategy. This is why we did not, and we will not, sell online” Blondiaux told Business of Fashion. Despite a negative trend, Chanel increased its investments in 2020. It did so, in particular, in the sustainable sector, and to vertically integrate its supply chain, for example by acquiring the Lombard tannery Gaiera.
Fantastic momentum
Everything has changed, however, since September 2020, when the rebound triggered led to the result recorded in the January-May 2021 period, with revenues growing by two figures compared to the same period of 2019. “We expect the this year’s sales are 35% higher than 2020, and of a lower value, but still double-digit on 2019. We are confident that we can rebuild margins by getting them very close to pre-Covid levels,” Blondiaux told The Financial Times. As for the possibility that Chanel will change ownership or go public, Blondiaux was drastic: “We will not participate in any possible consolidation of the luxury industry – reports BoF -, neither as a target nor as a buyer of other brands”.
Images from chanel.com
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