Despite Chanel's record sales in 2021, the luxury sector is once again plunged into uncertainty

Despite Chanel’s record sales in 2021, the luxury sector is once again plunged into uncertainty

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Chanel fashion show for the women's ready-to-wear collection autumn-winter 2022-2023, in Paris, on March 8, 2022.

The number is staggering. Chanel announced, on Tuesday, May 24, having reached 15.6 billion dollars in turnover in 2021, or 14.5 billion euros. The luxury house took advantage of a 49.6% rebound in sales to erase the horrible year of 2020 during which its activity had fallen by 18%, to stand at 8,300 million euros. The group of the brothers Alain and Gérard Wertheimer exceeded the activity of the 2019 financial year, pre-pandemic, by 27%. Thanks in particular to very strong price increases, its profitability exceeded that of 2020 by 170%, with $5.46 billion in operating income. Its net income surpassed the $4 billion mark, up 68% during the last fiscal year compared to 2019.

“Despite the difficult context of 2021, our results highlighted strong demand from our clients”, argues Philippe Blondiaux, Chanel’s chief financial officer, per press release. In 2021, the house founded by Gabrielle Chanel, it is true, continued to invest to support the brand’s notoriety: the endowment dedicated to its promotion reached 1.8 billion dollars, or 32% more than in 2020.

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What will it be in 2022? The group’s financial director promises that the year will be “a new year of great investments”. They will exceed one billion dollars. And more than 3,500 people will be hired at Chanel this year. In Paris, the brand has just reopened its jewelry boutique on Place Vendôme, after a year of work. And the catwalks of the collections designed by Virginie Viard benefit once again from an extraordinary dramatization. After Dubai, the brand’s models flew to Monaco on May 5 to present the 67 silhouettes of the cruise collection.

closed doors

However, several markets may concern the luxury house that employs 28,500 staff and operates 523 stores around the world. The brand has cut ties with Russia. Just like its competitors. Since March 4, Russian Chanel stores are closed. In China, the brand is also unable to exploit its entire commercial network, given the confinement imposed by the Chinese administration to combat the spread of the coronavirus. The specific brand World that 35 of its Chanel perfume and beauty boutiques are currently closed. Like five of its sixteen fashion and jewelry stores. In April, the brand suffered a drop in activity there “double digit”.

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