For the first time in its history, financial results were published by French fashion group Chanel this week which showed the credentials of the brand as the largest fashion brand in t world in terms of rale revenues and profit – both of which showed strong growth in 2017.
The privately-owned company has always kept its financial figures a secret from the public for years now despite being the leading company in the fashion industry dealing with the its iconic tweed suits, cushioned handbags and No5 perfumes. It is amongst the very few fashion brands that still does not want to use the online channels for selling its clothes.
Chief financial offices of Chanel, Philippe Blondiaux told the media that the publication of the financial results should not be seen as a step before a stock market listing. The executive also nullified any chances of selling of Chanel which has bene viewed to be a very coveted brand for conglomerates such as LVMH and Kering which has a number of designer brands.
“It’s exactly the opposite – this financial statement shows that we are amazingly solid financially and we can keep our status as a private, independent company for the next few centuries,” Blondiaux said in an interview.
“Instead of having others report (about us), we’ve decided to put the facts on the table about who we are,” he added. The company has had the tradition of allowing its creative officials speak such as the octogenarian Karl Lagerfeld the designer for its womenswear.
The revenues of the company notched a 11 per cent increase year-on-year at $9.62 billion for 2017. The higher sale was driven by strong demand from the Asia Pacific region where the revenues grew by 16.5 per cent. There was also a 18.5 per cent increase in profits year-on-year at $1.79 billion.
This financial report disclosure by Chanel has made it a close contender for the top position in the industry along with LVMH’s Louis Vuitton which is estimated to have revenues of more than $9.2 billion a year.
Earlier this month, Kering’s Italian brand Gucci predicted that it would surpass Vuitton in terms revenues and expects revenues to be over 10 billion euros compared to 6.2 billion euros ($7.2 billion) achieved last year.
In the last two years there has been an increase in demand for luxury products in China which has helped most fashion luxury brands. That momentum has also been carried forward into the first quarter of the current year for many brands. But some are struggling more than others to boost sales by capturing younger shoppers for instance.
Previous views into Chanel’s financial performance was only available from the figures that were filed with the Amsterdam exchange which only showed some parts of its business and had suggested that the sale of the company was declining. That fueled speculations of an acquisition.
No earning details before 2016 were provided by Blondiaux but only said that the company’s business was making constant progress in the last few years.
“We are optimistic on 2018,” he added.
(Adapted from Business-Standard.com)