With lockdowns in major North American and European markets, Chanel’s revenues slumped 18 per cent in 2020 to US$10.1 billion. Overall sales in Europe plunged 36.4 per cent to US$2.885 billion. While revenues in the Americas slid 15 per cent to US$1.966 billion and Asia/Pacific suffered the least with a 3.1 per cent drop to US$5.27 billion.
The prestige fashion house did not waver from its long-term strategy of not selling fashion, watches and jewellery online during the pandemic. But Chanel’s fragrances and beauty products are sold through e-commerce and global online sales rose 113 per cent in 2020 and 57 per cent in the first half of 2021. A strong performance which partially off-set the deep dive in travel retail revenues.
Skincare was a standout performer, thanks to the Le Lift and Sublimage franchises. Fragrance sales were bolstered by worldwide loyalty to Coco Mademoiselle for women and Bleu de Chanel for men. Hopes are also high that the 100th anniversary of Chanel No 5 this year will deliver a major uptick to the iconic fragrance’s already considerable bottom line.
Chanel is confident that the tide has turned and expects sales to increase by double digits by the end of the year compared to 2019. China and the US are driving the recovery and the company invested US$1.36 billion last year to support its fashion, jewellery, watch and skincare businesses.
Makeup revenues have suffered during the Covid-19 pandemic, as they have for many prestige brands. But Chanel is confident of a rebound in its global fragrance and beauty sales and remains committed to expanding its global network of standalone beauty boutiques.
Sustainability is also top-of-mind. Chanel launched a climate action program last year – Chanel Mission 1.5 – in a bid to reduce carbon emissions by 50 per cent by 2030 and switch to 100 per cent renewable electricity by 2025.
The fashion powerhouse is also sticking to its long-term policy of building strong local customer bases in key markets, rather than relying on tourist shopping. Chanel says it will continue to focus on achieving 80 per cent of its revenues in each market through its local customers.