Chanel’s Rise & STALL: Defects, Difficulties & Deflection (formerly the 19 tote saga thread)

[Glitterbomb]

Knowing that Chanel owners’ wealth reaches $90 billion thanks to a $5-billion dividend last year while all of us who have contributed to that windfall are getting subpar, cost-cutting quality makes me sick to my stomach. It’s not even a love-hate relationship, it’s more like being in an abusive relationship knowingly but chose to stay on. However we are not helpless victims. Our choices and how we spent our money will speak volume from now on. If we can’t then we should be asking ‘has it gotten to be a form of addiction’? An addiction that is vulgar and self-destructive, considering the anguish, frustrations or anxiety our purchases have brought us.

I have chosen to move on. I have learnt to appreciate other finer things in life that do not have to come with a big price-tag. Thank you Chanel for making me realise that.

I have chosen to move on too. I actually sold half of my Chanel collection this year and I'm not interested in buying Chanel bags anymore. I don't think I have purchased anything from Chanel this year. I used to buy 5 - 30 Chanels a year. I owned 150 Chanel bags at one point. I would still be interested in RTW but after hearing the buttons are falling off....no thank you. I've moved onto YSL for quality RTW, which is a fraction of the price, more of a youthful style, and actually fits me so much better.

Believe it or not, I have started using a suede Rebecca Minkoff (yes, seriously) as my casual everyday bag, because it has front and back pockets, a top zip and an adjustable, comfortable shoulder strap. It is holding up far better than any of my Chanel bags would if I were to use them daily (except apparently the 19 which is indestructible).

 

[Liberté]

@rainbowneko

Thank you so much for posting and all the information and everyone else contributing!

 

[sheeby]

I've been wondering if the monthly limits were also inspired by the VC....while the corporate messaging focused on demand, product scarcity, resellers, boutique stock, channel control, buying across categories/loyalty, etc....the reality is that it's actually transforming a retail model to more of a subscription model with consistent revenue streams akin to SAAS businesses (VC influence perhaps). At a minimum, it gave Chanel the ability to shape when customers purchase leather goods and predictability in cash flow if shoppers conform. In my mind, TPF is a microcosm of Chanel's customer base and many of us active in this community are likely purchasing more leather goods than the average customer. It would be interesting to know what percentage of customers actually were and were not purchasing 12+ bags annually. I wouldn't be surprised if there is a segment that the limits are actually encouraging to spend more annually, perhaps a growth segment for the brand. Having said that, I do agree with @TraceySH that there seems to be more stock in the boutiques now than 2021, so if Chanel is being transparent about that motivator, the no shipping for a week is working to help with that.

Related to the OP's topic, I'm not sure if other's saw Maria Draganova's IG post last week when she shared damage on her Trendy from normal wear. Looks like the leather is cracking??? I think I may have stopped breathing for a second when I saw it as I'm a huge Trendy fan and a bit of a lambskin lover. She hasn't posted anything about Chanel's response, but it definitely took my breath away. I won't stop wearing any of my Trendys, it's one of my favorite Chanel styles and thought it had strong craftsmanship...but it certainly gave me pause as I haven't worn any of my lambskin bags much during the pandemic...and while lambskin is known to be delicate, I never considered "delicate" as not standing up to normal wear.

 

[katlina]

I am shocked to see the thread starter is STILL going on about This. why would u go out of ur way to speak bad about a brand? I find this all very fishy..

 

[katlina]

I've been wondering if the monthly limits were also inspired by the VC....while the corporate messaging focused on demand, product scarcity, resellers, boutique stock, channel control, buying across categories/loyalty, etc....the reality is that it's actually transforming a retail model to more of a subscription model with consistent revenue streams akin to SAAS businesses (VC influence perhaps). At a minimum, it gave Chanel the ability to shape when customers purchase leather goods and predictability in cash flow if shoppers conform. In my mind, TPF is a microcosm of Chanel's customer base and many of us active in this community are likely purchasing more leather goods than the average customer. It would be interesting to know what percentage of customers actually were and were not purchasing 12+ bags annually. I wouldn't be surprised if there is a segment that the limits are actually encouraging to spend more annually, perhaps a growth segment for the brand. Having said that, I do agree with @TraceySH that there seems to be more stock in the boutiques now than 2021, so if Chanel is being transparent about that motivator, the no shipping for a week is working to help with that.

Related to the OP's topic, I'm not sure if other's saw Maria Draganova's IG post last week when she shared damage on her Trendy from normal wear. Looks like the leather is cracking??? I think I may have stopped breathing for a second when I saw it as I'm a huge Trendy fan and a bit of a lambskin lover. She hasn't posted anything about Chanel's response, but it definitely took my breath away. I won't stop wearing any of my Trendys, it's one of my favorite Chanel styles and thought it had strong craftsmanship...but it certainly gave me pause as I haven't worn any of my lambskin bags much during the pandemic...and while lambskin is known to be delicate, I never considered "delicate" as not standing up to normal wear.

View attachment 5589891View attachment 5589892

This is absolute normal for any lambskin bag in a colour like this when worn with somth that rubs like a jeans jacket or whatnot. How IS chanel, or any other brand like hermes or Dior, supposed to make a lamb (!) skin (!) product durable? They can’t turn it into a fabric that withstands friction, and if they TRY and sell a coated version, ppl on here go out of their way to show and act shocked that the bag doesn’t absorb liquids etc. (Or ketchup or bleach).

Sorry but it’s just like they can’t get it right no matter what they do.

If they don’t coat the leather ppl scream how delicate it is.

If they DOntreat it to be more durable ppl scream that it behaves like fake leather (or is fake).

What do u want? ❤️❤️

 

[Swanky]

I can only speak with my personal experience, but my NM nor my boutique are heavily stocked. Of course there’s a little more now than a year ago jmo, as we were coming out of a global shut down.

I don’t look into the financials of companies as it doesn’t really influence my purchases. My biggest purchases are my home, cars, furniture and jewelry, I’ve never considered looking into financials before.

 

[TraceySH]

I am shocked to see the thread starter is STILL going on about This. why would u go out of ur way to speak bad about a brand? I find this all very fishy..

Lol. Consider it public service. If it irritates you, move on.

 

[TraceySH]

I can only speak with my personal experience, but my NM nor my boutique are heavily stocked. Of course there’s a little more now than a year ago jmo, as we were coming out of a global shut down.

I don’t look into the financials of companies as it doesn’t really influence my purchases. My biggest purchases are my home, cars, furniture and jewelry, I’ve never considered looking into financials before.

Right? This has been fascinating hasn’t it? I love hearing all these accomplished and intelligent people here dissecting financials.

 

[Glitterbomb]

This is absolute normal for any lambskin bag in a colour like this when worn with somth that rubs like a jeans jacket or whatnot. How IS chanel, or any other brand like hermes or Dior, supposed to make a lamb (!) skin (!) product durable? They can’t turn it into a fabric that withstands friction, and if they TRY and sell a coated version, ppl on here go out of their way to show and act shocked that the bag doesn’t absorb liquids etc. (Or ketchup or bleach).

Sorry but it’s just like they can’t get it right no matter what they do.

If they don’t coat the leather ppl scream how delicate it is.

If they DOntreat it to be more durable ppl scream that it behaves like fake leather (or is fake).

What do u want? ❤️❤️

You're twisting it. People can complain how quickly a $6000 - $9000 lambskin bag wears...that has nothing to do with the brand also selling $6000 bags made of bonded leather. It is not real leather that was treated and therefore is more durable. The leather is peeling. Real leather doesn't peel. It is bonded leather. Do some research on what that is, and then ask yourself if you want to pay $6000 for the same quality leather you can buy for $50 at target.

 

[EpiFanatic]

You're twisting it. People can complain how quickly a $6000 - $9000 lambskin bag wears...that has nothing to do with the brand also selling $6000 bags made of bonded leather. It is not real leather that was treated and therefore is more durable. The leather is peeling. Real leather doesn't peel. It is bonded leather. Do some research on what that is, and then ask yourself if you want to pay $6000 for the same quality leather you can buy for $50 at target.

I am not convinced that the 19 is bonded leather. If a leather expert that I trust slits it open and shows me it is, then I will agree. And if it is, I will continue to enjoy the bag because I think it’s an awesome, beautiful, functional bag that fits my purposes, bonded leather or not. Separate from that, this thread has been fascinating and informative, and I can appreciate the questions that have lead to more investigation of the financials to the extent they are available to try to understand and explain the change in the quality of Chanel’s products. I can understand why loyal long time clients of chanel (which I am not) would be curious and concerned about what chanel is doing with their revenues. As a CPA with an audit background, I am skeptical by nature so I hesitate to draw a conclusion without actual audited numbers of the subsidiaries to review. However I do have my suspicions and feel like I am more informed and can make better decisions than before reading this thread.

 

[EpiFanatic]

@rainbowneko thanks for the further clarification. I just clicked on some of your links and will examine in detail when I’m on my computer. Another thought occurred to me. Although obvious, the rampant price increases would have contributed to the huge increase in gross revenue without requiring COGS to have a proportional increase, explaining the COGS/gross revenue decrease from 2020 to 2021, this not necessarily indicating the use of lower quality raw materials or cost of construction per item. But again speculation given we don’t have the f/s by subsidiary. Would be awesome to see P/L by product line right? I wonder what 2022 gross revenue will look like given their worldwide purchase limitation? Off the top of your head you would think gross revenue would decrease but maybe the won’t be the case if it just allows the market to expand to buyers who had never purchased Chanel bags before, less bags per person but more “persons”, KWIM? But all my comments are an exercise in speculation without actual financials.

 

[Glitterbomb]

I am not convinced that the 19 is bonded leather. If a leather expert that I trust slits it open and shows me it is, then I will agree. And if it is, I will continue to enjoy the bag because I think it’s an awesome, beautiful, functional bag that fits my purposes, bonded leather or not. Separate from that, this thread has been fascinating and informative, and I can appreciate the questions that have lead to more investigation of the financials to the extent they are available to try to understand and explain the change in the quality of Chanel’s products. I can understand why loyal long time clients of chanel (which I am not) would be curious and concerned about what chanel is doing with their revenues. As a CPA with an audit background, I am skeptical by nature so I hesitate to draw a conclusion without actual audited numbers of the subsidiaries to review. However I do have my suspicions and feel like I am more informed and can make better decisions than before reading this thread.

I understand enjoying the bag still because you like it's functionality and appearance of it, but it wouldn't bother you that you paid $6000 for the worst leather quality you can get, from a brand that simply called it "lambskin leather" and misrepresented the product, knowing customers would assume it's full grain leather at that price? Leather that is closer to plastic than real leather, that has the smallest percentage of real leather in it only so it can still be called leather?

Personally, I don't like feeling lied to. It's one thing to buy a $6000 bag that you know is made of bonded leather...it's another entirely when they aren't disclosing it.

 

[jcantu]

I am shocked to see the thread starter is STILL going on about This. why would u go out of ur way to speak bad about a brand? I find this all very fishy..

Yet here you are. You clicked on, read through it, and then decided to comment.

You refuse to accept the empirical data of a decent amount of users based on what “Chanel says”. Does Chanel send you a paycheck to defend them? Chanel defenders are ALMOST as bad as Hermes defenders.

 

[Ghettoe]

In my opinion, as a new chanel consumer (because i only started my mini chanel bags collection a few years ago, didn't own any vintage pieces, not a vip client as well), after doing research and reading up on the financial statements uploaded by chanel limited, there are a few takeaways:

1. General consumers may think that the entire chanel brand is only by chanel limited (at least this is what i am thinking until today I did research on it). The fact that Litor Ltd is staying away from the limelight is already a big red flag as we do not have any idea whether the company is solely owned by Wertheimer family or mix of people. In addition, Litor Ltd does not have any official information eg. types of business activities surfaced on capitalIQ as well. As a consumer, i feel abit "cheated"/ doubtful because the money spent on chanel items might not be greatly reinvested to improve the quality of the products or even raise production line (pretty sure they have sufficient funds to do so). If chanel really reinvested to improve the quality of the products, there will be lesser people complaining on social media platforms!! from time to time i saw users posting their chanel issues on chinese social media app...

2. They are not transparent with the consumers with their financial statements because, on the chanel website, they only uploaded key highlights which are not really useful as compared to a full annual report. As a consumer, what kind of subsidiaries, joint ventures etc they are having as well because technically it helps to reduce production costs, and when Chanel said they increase prices for price harmonisation is really bs...........

3. They preach a lot on sustainability but they are churning out so many "fast-fashion paced" products... does it even make sense? I am not surprised if they are going to have 12 collections in a year in the near future!!

I work in finance and I might be the only one going eh, this is pretty standard. I saw a post here about inventory being 24 and the user being appalled, but without the notes to the financial statement, these are pretty useless numbers. If financial statements told us everything, I would not bother with the notes, MD&A or speaking to management. We don't even know how Chanel accounts for inventory for us to be appalled by that number.

Like your point number 2 is the most standard thing for a private company. I cover a porftfolio of private companies and a huge part of being private is you aren't required to disclose anything. Yes, you have the audited financials but those aren't public. What's the point of being a private company if you have to disclose your business?

I've not seen any mention of Capex here, or their working capital which would tell you significantly more than inventory.

Things like M&A are fairly common too. There could be so many reasons for M&A. It can be to penetrate certain geographies, or in the case of chanel, it would make sense for them to not only acquire smaller fashion houses, but leather tanneries, etc Without speaking to a company or having access to things like the notes or their MD&A, these guesses are pretty wild.

 

[EpiFanatic]

I understand enjoying the bag still because you like it's functionality and appearance of it, but it wouldn't bother you that you paid $6000 for the worst leather quality you can get, from a brand that simply called it "lambskin leather" and misrepresented the product, knowing customers would assume it's full grain leather at that price? Leather that is closer to plastic than real leather, that has the smallest percentage of real leather in it only so it can still be called leather?

Personally, I don't like feeling lied to. It's one thing to buy a $6000 bag that you know is made of bonded leather...it's another entirely when they aren't disclosing it.

First off, I am not convinced that it isn’t non-bonded leather. If it isn’t, I bought it without asking whether it was bonded leather. Maybe that’s a lesson for me, if it matters enough to me. I can’t be a hypocrite about saying, “well I spent this much money, the materials are not sufficiently high quality”. I have been buying LV canvas for years spending thousands of dollars (worth minimal leather) on canvas! Man made materials! I bought it knowingly because it served my purpose and the bag as a whole met my criteria, which I won’t go into. And I do not have a single regret for spending thousands on a canvas bag that I love. I am not buying Chanel only for the materials. I love the look and feel and functionality, which regardless of material the Chanel 19 delivers for me. So I’m not angry. Knowing more about what Chanel is spending their profits on may be a different story, for me.