Chanel is all set to open private stores, exclusively for its ultra elite clientele. Through these boutiques, the Paris-based luxury brand can cater to the high-spending customers, who will no longer need to stand in long queues at its retail outlets.
The stores are most likely to open in the beginning of 2023 across key Asian markets.
Here’s what we know about Chanel’s latest move
Chanel’s business performance
In 2021, it reported a 50% increase in its revenue, up to USD 15 billion, as compared to pre-pandemic levels. Chanel’s profits have grown owing to the increase in fashion, watches and jewellery sales during that time.
Chanel’s chief financial officer, Philippe Blondiaux is confident about the sales and revenue growth despite witnessing lockdowns in China, rising inflation and the current geo-political tension in Ukraine.
The luxury brand is also looking to put restrictions on the number of bags a customer can buy per year, to ensure exclusivity and reduce bulk buying. However, this will be limited to certain models at a time — not globally.
He further added that the favourable combination of increase in price along with surge in sales volume can be attributed to the company’s annual growth.
The company has increased the prices of its handbags several times in the lockdown. For instance, the famous Maxi 2.55 flap handbag, which cost less than USD 7,000 in 2019, now costs around USD 10,000.
Investment in retail stores
Chanel does not believe in e-commerce. Except for beauty, it does not sell its collection online. Which is why, it has invested USD 758 million in physical retail spaces, as stated in a press release. It plans to build retail stores in over 50 locations for fragrances and beauty only. The purpose of this is to have an exclusive, direct-to-consumer approach.
Additionally, it also plans to expand its human resources by hiring over 3,500 employees, which would include many sales associates.
With only 250 stores worldwide, it looks like Chanel wants to get a competitive edge as compared to its rivals.
(Image Credit: Enric/ CC BY-SA 4.0 /Wikimedia Commons)