Chanel Praises Virginie Viard After Revenues Rise
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twice-yearly price increases to reflect inflation in raw materials and harmonize its prices between different regions, he added. Chanel last raised prices by up to 6 percent in March, driving the price of its signature Medium Classic bag above $10,000.
Operating profit was up 10.9 percent to $6.4 billion in 2023 and the brand plans to ramp up capital expenditure by at least 50 percent this year from a record $1.23 billion last year, Blondiaux said.
“We will be really on the offensive in terms of possible real estate acquisitions, but we will do them at the right time at the right price,” he said.
He declined to comment on rumors that Chanel is in talks to buy 745 Fifth Avenue, home to the Bergdorf Goodman men's store, or 660 Madison Avenue, the site of the old Barneys flagship.
“We are looking at many different options for New York. Again, no rush. I think we will take opportunities when they come,” Blondiaux said. “More important than the key cities that we all know for luxury, it's probably the future cities of luxury, the future cities of influence, and that's where we'll set out eyes for these future real estate acquisitions.”
Chanel increased its network to 612 locations, with 47 net openings last year, of which 31 were standalone fragrance and beauty boutiques, and 16 were fashion and watches and jewelry stores, the executive said.
They included twin fashion and watches and jewelry boutiques on Milan's Via Montenapoleone; the reopening of its flagship in Beverly Hills, and dedicated spaces for its “Chanel & moi” program, which offers after-sales services including restoring and repair.
Nair said Chanel also plans to continue investing in China. “China is a very important market for us,” she said. “We are opening more doors this year.”
Chanel's investments in “brandsupport activities” jumped 20 percent last year to $2.46 billion as the company splashed out on ads, including a new Coco Mademoiselle campaign starring U.S. actress Whitney Peak, high-profile events and client-centric activities in order to keep the brand top of mind.
It plans to increase this amount in absolute terms this year, but not in the same proportion as capital expenditure, Blondiaux said.
In addition to its ready-to-wear and haute couture shows in Paris, Chanel unveiled its cruise 2024 collection last year in Los Angeles and repeated that display in China's tech capital of Shenzhen later in the year. In a surprising move, it showed its Métiers d'Art collection in Manchester, England, a rainy manufacturing city famous for its mills that once supplied cotton to the world.
Chanel moved its global headquarters to London from New York in 2018, and the brand is building new headquarters in Berkeley Square, set to open in 2025, housing IT, commercial, business, culture and non-fashion offices. The company hired 4,500 people last year, primarily in digital and retail, raising its global headcount to 36,500.
While Chanel made limited progress in its sustainability agenda, with a 3 percent decrease in scope 1 and 2 emissions last year, Nair said she was “proud” that the company recently became “one of the very first in the industry” to set a target to become carbon neutral by 2040.
“We are conscious we have a long way to go, but this progress gives us confidence for the future,” she said.