Chanel’s Sales Bounce Back Following Heavy Pandemic Hit
Chanel’s revenue fell by 18 percent last year to $10.1 billion, the French luxury giant said Tuesday, citing a business climate that was “highly disrupted” by store closures and the suspension of international travel during the Covid-19 pandemic.
The downturn in Chanel’s business was steeper than the declines suffered by top luxury rivals including LVMH, whose fashion division was propped up by persistent consumer appetite for its biggest Louis Vuitton and Christian Dior labels, and accessories-focused Hermès, where demand continued to exceed production capacity for its flagship Birkin and Kelly handbags.
The tumultuous year came as Chanel seeks to write a new chapter following the loss of its creative chief of over 35 years, Karl Lagerfeld, in 2019. The company’s operating profit fell by 41 percent to $2 billion in 2020.
But the brand has been quick to bounce back: sales have returned to growth, with revenue rising by a double-digit percentage over 2019′s pre-pandemic levels during the first five months of 2021, chief financial officer Philippe Blondiaux told Business of Fashion in a phone interview.
“Since September 2020 we’ve seen a fantastic momentum, which further accelerated this year,” Blondiaux said.
The deeper slump than rivals is best explained by a heavy exposure to perfume and cosmetics, categories that are highly exposed to the travel retail channel, which has collapsed during the pandemic. Chanel’s perfumes like No.5 , Chance, and Gabrielle occupy some of the most prominent placements in airports.
