French luxury fashion house Chanel is set to double capital expenditures this year to $1.3 Billion. The brand plans to invest in communications and events and recruit more than 5,000 employees in an effort to further fan desirability. Chanel wants to pursue the ultimate luxury experience worldwide.
Leena Nair, global chief executive officer at Chanel, said the company’s philosophy is to stay focused on building brand equity in each of the markets it operates in. “We genuinely keep a long-term perspective in the investments we make.”
Chanel wants to ensure that its 100-year-old iconic house continues to thrive and stay a beacon of inspiration for the next 100 years. “And we want to do that by staying focused on the transformative power of creation and innovation,” Nair said. “We’re continually reinventing our heritage, and reinterpreting our codes to stay future-proofed and to stay ahead of the curve.”
Philippe Blondiaux, Chanel’s group chief financial officer, pointed out that the return on investment that Chanel has done over the last many years has been very positive. The luxury fashion house saw double-digit growth across all product lines and in all regions despite pandemic restrictions and lockdowns in China. Revenues in Asia-Pacific gained 14.3 percent to $8.65 Billion on a comparable basis. In Europe, revenues improved nearly 30 percent to $4.72 Million, and 9.5 percent in the Americas to $3.86 Billion.
Blondiaux said 2022’s momentum has carried over into 2023 and it’s currently tracking double-digit gains in mainland China. “We are increasing very significantly our business with Chinese consumers outside of China. In France last year, the brand’s business with Chinese consumers was down 90 percent versus the pre-pandemic year 2019. By contrast, spending by Chinese consumers in France last month, April, was down only 14 percent. This shows the speed at which the return of international travel of Chinese consumers is happening.”
The executive added that business has softened in the U.S. since November 2022, and it continues to do so. He said Chanel continues to believe strongly in the U.S. and highlighted the fashion house’s new Beverly Hills boutique and sponsorship of the Karl Lagerfeld retrospective at the Costume Institute at the Metropolitan Museum of Art in New York.
Blondiaux said expanding Chanel’s network of stand-alone fragrance and beauty boutiques was another priority. Nair added that Chanel believes in an environment where the client has a chance to discover across all of Chanel’s fragrance, beauty, and skin care categories. These showcases allow for storytelling and let the consumer understand what the brand is doing with its products.
Also Read: Kristen Stewart is the Muse for Chanel Spring/Summer Ready-to-Wear Campaign
