Record-breaking. In addition to sales prices, Chanel’s investments and revenues are growing, reaching $19.7 billion in 2023. That is: +16% on a comparable basis on 2022. Operating profits increased 11% to $6.4 billion. The last quarter of the year was also positive, as sales grew 14%. CEO Leena Nair (pictured) and CFO Philippe Blondiaux spoke about the brand’s upcoming strategies, highlighting the focus on China. Of course, the fate of creative director Virginie Viard was also a topic od conversation.
Chanel is on a record high
In 2023 Chanel’s revenues approached $20 billion, reaching $19.7 billion. A value that makes the French fashion house the 2nd largest luxury brand after Louis Vuitton. Price increases contributed to 9%. The French fashion house, owned by brothers Alain and Gerard Wertheimer, has already raised prices by an average of 6% this year around the world. It may very well be that they will be raised again in the second half of the year, to adjust for rising material costs or to even out exchange rate differences, Blondiaux said. The brand continues to “invest relentlessly” in improving production. “The numbers for 2023 confirm that our consumers totally support our quality level”, Blondiaux said.
Doubling in 10 years, actually more
“In the last 10 years we have more than doubled our revenue and our workforce”. Moreover, “In the last five years we have doubled the size of our distribution network“, highlighted Nair (source Business of Fashion). Chanel expects a very complex and challenging 2024 with “multiple crises around the world”. In 2023 alone, Chanel increased its workforce by 14%, bringing the total to more than 36,500 people. In this regard, Nair also used data to showcase the work of creative director Virginie Viard: “Since she took over from Karl, Chanel’s fashion business has multiplied by 2.2”. The point is: Viard stays.
Target for China
Chanel wants to grow in China and will invest to open more stores, despite the fact that Chinese consumers have resumed traveling abroad for luxury shopping. Blondiaux pointed out that Chanel has 18 boutiques in China, compared to 40-50 of competing brands. Too few, from an expansionist perspective (source: Reuters). Plans for an expansion in China are part of an increase in the capital expenditure budget from $1.2 billion to $1.8 billion.
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