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Compared with pre-pandemic levels, Chanel’s revenue this year is expected to achieve “double-digit” growth and repair its profit margins. This is another sign of how the luxury goods giant can get rid of the crisis earlier than people feared.
With this performance, the privately held French luxury brand, known for its No. 5 perfume and quilted bag, will consolidate its position as one of the most powerful brands in the industry. Louis Vuitton And Hermes.they have Benefit As consumers in China and the United States have aggressively purchased high-end handbags and fashions in recent months, investors have pushed the valuation of luxury goods to record highs.
CFO Philippe Blondiaux said in an interview on Tuesday: “I’ve never been so happy that a forecast went wrong,” he said. Earlier prediction Covid-19 will cause the industry to have a difficult two years.
“Since September or October, customer momentum has been strong and will only accelerate in 2021. We expect this year’s sales to increase by 35% over 2020 and a double-digit increase over 2019. We are confident that we can rebuild profits very closely. Rate to the level of 2019.”
Although approximately 10% of its 206 global boutiques are still closed due to Covid-19 restrictions, it still achieved strong sales growth.
Unlike its competitors, Chanel has very little online sales, so it cannot rely on digital revenue during the pandemic blockade. Only its beauty products and perfumes are sold through e-commerce.
Chanel said that at a constant exchange rate, revenue in 2020 will fall by 18% to 10.1 billion U.S. dollars, which is roughly the same as the decline of LVMH and Kering, but worse than Hermès. Operating profit fell 41% to US$2 billion, a drop even greater than that of these competitors.
In addition to the challenge of the pandemic, Chanel has been in a transitional period since the death of star designer Karl Lagerfeld in 2019, and his successor has served as creative director Virgeni Viard Leave her mark on the series.
When asked about poor profit performance, Blondiaux stated that Chanel had invested throughout the crisis and did not cut costs significantly. It also did not make major layoffs or rely on government assistance, such as vacation plans.
Capital expenditures rose to the highest level of US$1.1 billion last year, of which about half was used to “seize opportunities”, such as the purchase of the Chanel flagship store on Bond Street in London. Blondiaux said that the rest is used to upgrade offices and studios and technology investments, adding that the company will maintain a similar level of capital expenditure this year and next.
Chinese consumers quickly returned to conspicuous consumption last year, confirming that they are still the most important growth engine of the industry. But Blondiaux said that Chanel hopes to expand in China cautiously.
“Luxury is about exclusivity and scarcity, and offering unique products,” he said. “In China, we have 15 fashion boutiques, and we will open more at a relatively modest rate of one or two every year.
“We want to protect the experience of existing customers by providing personalized and intimate relationships.”
Blondiaux said that Chanel is also considering whether to open its first store on China Island. HainanAs the government promotes its development into a duty-free shopping mall, it has become a hotspot for luxury goods and beauty.
“We are following the development of Hainan very closely and are already selling our perfumes and beauty products there, even though we do not have a fashion or watch business,” he said.
“This decision may be made this year, but it takes time to find a suitable location and build the store, so it is unlikely to open this year.”
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