Chanel to continue investing despite the volatile luxury market

By Mimosa Spencer

She said on Tuesday that the luxury Franch Group will continue to invest extensively this year, and it depends on its deep pockets with the decline in the players of the other two sectors, with plans for new stores in China and the United States, despite fluctuations in both markets.

“We continue to move at very unconfirmed times,” said Group’s finance head, Felipe in Reuters.

He supervised the “positive stability marks” in China and Hong Kong, but he said he was still “premature saying” the region has turned into a corner, while the ongoing talks about the definitions caused “a lot of uncertainty.”

Despite the decrease in sales by 4.3 % last year, the French brand, known for its double logo, said the lined leather handbags and perfumes No. 5, it plans to adhere to the level of capital spending last year of $ 1.8 billion, which is 43 % for the previous year. It will also invest 600 million dollars in supply chains where it is produced, including buying shares in a silk resource in France and the jewelry maker in Italy.

Chanel sales for the year ended December 31, $ 18.7 billion, as a decline in China decreased, while operating profits decreased by 30 %.

Chanel plans to add 48 stores this year, nearly half of the United States and China, as well as in Mexico, India and Canada. Only six of the new ports will be fashion stores.

“The macroeconomic economy and geopolitical volatility are an undoubted challenge for business and we have witnessed that these conditions have an impact on sales in some markets,” said Lina Nair, global CEO Lina Nair.

Blondiaux said that Chanel, which increased prices by about 3 % last year to keep up with inflation, may raise it more this year, in line with inflation. He added that the rise in gold prices may lead to a rise in prices for the jewelry range.

Nair said that the new creative director Matteo Blaise, who was called in December to replace Virgin Verard, will not present men’s clothes – a topic of repeated speculation.

Blazy’s date comes amid a wide modification designed across industry, with new names in higher brands including Gucci, Dior, Balenciaga and Valentino, where executive officials seek to increase sales growth.

Chanel is owned by French billionaire brother Alan Vertimir and Gerard Vertimer.

Last year, sales in LVMH, the largest luxury group in the world, increased by 1 %, as the American and European markets helped us compensate for the recession in Asia, while Hermes, who outperformed its competitors, recorded a growth of approximately 15 %, with growth in all regions, including Asia.

The luxury groups hoped that the American market would help remove the sector from the recession this year, but the uncertainty about the customs tariff has led to hopes for a rapid bounce, as the consultant Bain reduced its sales expectations in its sector to a possible decrease between 2 % and 5 % this year.

(I participated in the reports of Mimosa Spencer and Tassilo Hummel. Editorial by Mark Potter)