Chanel has given Virginie Viard its vote of confidence after the French luxury house again delivered record revenues in 2023.
Chanel global chief executive officer Leena Nair and chief financial officer Philippe Blondiaux said the luxury behemoth plans to maintain both its brand strategy and creative direction, despite a slowdown in global luxury spending and mixed online reactions to its latest price increases and ready-to-wear collections.
The French fashion house reported on Tuesday that revenues totaled $19.7 billion last year, up 16 percent at comparable rates, with double-digit growth across all categories. Sales increased in all markets as tourists returned to many locations, while demand from local customers remained sustained.
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“It’s a testament to the desirability of Chanel’s creations and the sustained investment we’ve made in our brand in creating the ultimate luxury experience for our clients and in supporting our people to grow and develop,” Nair said in an interview with WWD.
She underscored that Chanel has more than doubled its revenues and headcount in the last decade. In the last five years, it has doubled the size of its distribution network.
Viard, who took over as creative director following the death of her predecessor and mentor Karl Lagerfeld in 2019, has been instrumental to the brand’s success in recent years. Under her watch, Chanel’s ready-to-wear business has been multiplied by 2.5 and it grew 23 percent last year alone, Blondiaux said.
“From a consumer perspective and a brand perspective, Virginie has been a massive contributor,” he said.
Nair said the brand is tracking feedback on social media, but it is only one of several key metrics. “Performance has to be viewed holistically across all measures, across all important stakeholders,” she emphasized.
“Social media is one form of feedback and we look at it and we learn from it and we always have the humility and curiosity to continuously learn and improve. But if I look at some of the other numbers, client satisfaction across all geographies has gone up. Our brand equity scores have gone up across all demographics,” she added.
“Virginie is an inspiring woman very successfully creating for women everywhere, and the feedback of clients – the comfort, the silhouette, the fit – it’s really positive, it’s landing really well,” she continued.
She also noted strong employee satisfaction rates, despite a rash of high-profile executive departures last year, including that of John Galantic, president and chief operating officer of Chanel Inc. since 2006, as well as regional leaders for Japan, Asia-Pacific, and the U.K., Canada and Latin America.
The former Unilever executive said it was all part of a carefully prepared succession plan that began with her arrival in 2021.
“Leadership changes and retirements are a part of the natural cycle of business. At Chanel, we are very privileged and lucky to have accomplished leaders who forged long careers,” said Nair, noting that it’s not unusual for executives to serve for decades at the company.
“Each of them makes a significant contribution and nurtures a new generation of talent, and it’s a testament to their leadership that we have an incredible bench and these new leaders are stepping in and taking over. All these changes have been prepared, planned and done thoughtfully, as we do everything at Chanel,” she said.
“These retired leaders are loyal friends and advocates of our house,” said Nair, who was keen to counter reports of a mass exodus at the house. “I have a great team. Mood and morale at Chanel is very good. Our people pride and engagement levels are the highest [they’ve] ever been and our attrition levels are the lowest they’ve ever been.”
Operating profit was up 10.9 percent to $6.4 billion and the brand plans to increase capital expenditure by 50 percent in 2024 from a record $1.23 billion last year as it snaps up prime store locations and invests in craftsmanship, Blondiaux said.
Chanel increased its network to 612 boutiques, with 47 net openings, including 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.
Chanel’s investments in “brand-support activities” jumped 20 percent last year to $2.46 billion as the company splashed out on global advertising campaigns, high-profile events and client-centric activities in order to keep the brand top of mind.
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 change in strategy, it also targeted a new generation of luxury clients by unveiling 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 a new building in Berkeley Square, which is 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 headcount to 36,500.
