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

[rainbowneko]

Along with this, they have so many different segments, who even knows what's impacting the COGS more? Why is everyone so sure it's handbags?

COGS in the financials are made up of different lines in chanel from beauty to RTW, and the amount was being aggregated. if u note in my excel, you realised chanel has lesser COGS as compared to other luxury companies, which is already a red flag on how much they are profiting milking from consumers. nobody knows unless you're the management accountant that in charge of approving budgets, to know what's cogs for each item relative to their sales price

 

[fice16]

I loved Chanel (I owned 150 bags and countless amount of RTW, shoes, jewelry, etc at the peak of my collection) and it deeply saddens me to see what has happened to the brand I loved. I know many people still love this brand, but I just don't anymore. My love for Chanel has been killed by overly greedy and insensitive price increases while quality diminishes at a rapid pace. RTW with buttons commonly falling off, that you have to go out of your way to request to be reinforced while purchasing? Chanel bags known for crooked flaps, popped stitches, loose threads, straps that literally fall OFF the bag, and now likely bonded leather that peels within 30 minutes of use? It's not okay to pay $6000 - $9000 for ****. The net worth of the Wertheimers is $90 billion. We deserve better.

I remember the good ol' days of buying a $4900 medium classic flap in 2016...I never had to do my own quality control. To think the same bag retails today for $8800, nearly double in just six years, while the quality is now so horrible is repulsive to me.

Talking about the Chanel RTW with buttons commonly falling off...I bought the pink cardigan dress from 2021 Resort collection, wore it maybe 3-4 times, and had 2 buttons that fell off and they were nowhere to be found. A while ago, I mentioned in the Chanel RTW thread that Chanel seems to be using cheaper fabric (synthetic or cotton) to replace the more expensive fabric materials such as wool and cashmere in many of their RTWs as compared to 5-10+ years ago. Unfortunately, I also start to see Dior is doing the same thing since the COVID pandemic started (they are producing more cotton-fabric RTWs as compared to wool/cashemere/silk-fabric RTWs)...it is just sad that these luxury brands seem to be using less premium materials in their goods nowadays..

I still buy some of these designers items only because I truly love some of the designs..

 

[gail13]

Im curious about this:

Chanel is held by Litor Ltd., registered in the Cayman Islands. Mousse Partners was folded into Litor in December, according to a legal notice in the Cayman Islands Gazette.

 

[gail13]

Talking about the Chanel RTW with buttons commonly falling off...I bought the pink cardigan dress from 2021 Resort collection, wore it maybe 3-4 times, and had 2 buttons that fell off and they were nowhere to be found. A while ago, I mentioned in the Chanel RTW thread that Chanel seems to be using cheaper fabric (synthetic or cotton) to replace the more expensive fabric materials such as wool and cashmere in many of their RTWs as compared to 5-10+ years ago. Unfortunately, I also start to see Dior is doing the same thing since the COVID pandemic started (they are producing more cotton-fabric RTWs as compared to wool/cashemere/silk-fabric RTWs)...it is just sad that these luxury brands seem to be using less premium materials in their goods nowadays..

I still buy some of these designers items only because I truly love some of the designs..

I think we are going to start seeing new materials that aren't what we are used to, in the name of sustainability.

 

[PurseCloset]

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.

You're welcome! Hope my insights/ information do help people who read this thread understand why Chanel keeps having price increases 2-3 times a year and the quality is like down the drain!! Also, Chanel is not fully transparent to their consumers which is why I decided to read and research it. Maybe this thread would wake some of the chanel fanatics that there is a change in chanel quality and should be aware of chanel's business decisions that might potentially affect the consumers. Since they are lowering the COGS eg. using lower grade materials/ poor leather coating = faster wear and tear = goods returns or send for repair (to me its quite distressing because I just sent my c19 caramel due to the shoddy workmanship on the front main dangling chain, and the after-sale associate told me to wait up to 6 months?!????) = i lost confidence in the brand and would not buy bags anytime soon

I am from Asia so the launch of the new season collection would be around 2-3 weeks later after the launch in US and Europe. Talking about seasonal bags, popular ones would either sell out during the launch day or be put up as not for sale (display only). Since I am not a vip or big spender, generally it would be slightly harder to get seasonal bags through walk-in on launch day. As for classic flaps, I heard there is a waitlist for that so it seems like my country is not well stocked! RTW I can't comment on it because I don't buy RTW!

Thanks for all the insights rainbowneko on the ongoings with Chanel. No wonder despite the steep price increases the quality has not improved in anyway.

Wat happened to your c19 caramel the chain strap ? (noticed that there are some black stains in between each of the connnecting antique gold hardware chain) Which series was this? Beginning to see very huge differences in leather quality of c19 (especially the popular colours like caramel) over the seasons actually. I am also done with Chanel too. Recent ones quality issues has become so bad it's surfacing across all product lines .

 

[ntntgo]

I was thinking, since Artbag moved to South Florida, I’m considering buying a 22, Lord knows the boutiques here are full of them, and taking one of my 19s that isn’t currently at Chanel’s outsourced repair shops up north and having them take them apart while I film it.

Oh and for everyone that thinks their bags are going to Paris for repair, sorry to disappoint. They get checked in through their repair department in New Jersey then go to a place whom I don’t know if I can name as I’m not sure if they have an NDA or not. Bags that come in to the boutiques before they’re sold and are damaged go directly to their outsourced US repair company without having to be checked in through NJ.

I thought everyone knew this in the US but I’ve seen a lot of people saying that their bag was sent to Paris. Why would anyone think that? Maybe I misunderstood.

I know Chanel has a repair place in the UK and one in China. Not sure where bags in the ME & Africa go but I’m sure they’ve got places there as well. I’m assuming that all of APAC goes to the shop in China. Maybe someone in this thread that’s located in greater AP knows for sure.

@TraceySH, do you want to ship your 19 or 22 to Artbag and I’ll make the arrangements? I’m willing to use one of my 19s but out of the 11 I had, I sold the 3 newest ones. A 22 I’d have to go buy but I’m willing to do it.

Thoughts anyone? Do we want to see the most prestigious Hermes repair shop in the US take apart a Chanel?

 

[TraceySH]

I was thinking, since Artbag moved to South Florida, I’m considering buying a 22, Lord knows the boutiques here are full of them, and taking one of my 19s that isn’t currently at Chanel’s outsourced repair shops up north and having them take them apart while I film it.

Oh and for everyone that thinks their bags are going to Paris for repair, sorry to disappoint. They get checked in through their repair department in New Jersey then go to a place whom I don’t know if I can name as I’m not sure if they have an NDA or not. Bags that come in to the boutiques before they’re sold and are damaged go directly to their outsourced US repair company without having to be checked in through NJ.

I thought everyone knew this in the US but I’ve seen a lot of people saying that their bag was sent to Paris. Why would anyone think that? Maybe I misunderstood.

I know Chanel has a repair place in the UK and one in China. Not sure where bags in the ME & Africa go but I’m sure they’ve got places there as well. I’m assuming that all of APAC goes to the shop in China. Maybe someone in this thread that’s located in greater AP knows for sure.

@TraceySH, do you want to ship your 19 or 22 to Artbag and I’ll make the arrangements? I’m willing to use one of my 19s but out of the 11 I had, I sold the 3 newest ones. A 22 I’d have to go buy but I’m willing to do it.

Thoughts anyone? Do we want to see the most prestigious Hermes repair shop in the US take apart a Chanel?

I will send you my beige one that smells like chemicals. I can't use it. It's embarrassing, the smell. Shall we donate it to science?

 

[gail13]

I thought everyone knew this in the US but I’ve seen a lot of people saying that their bag was sent to Paris. Why would anyone think that? Maybe I misunderstood.

Because Chanel uses that as another story to make you feel that you are getting special attention, and to explain the inhumanely long wait time. It's the Savoir Faire.

 

[waterlily112]

Considering how Chanel boldly advise their clients to just deal with their defective bags, I'm not surprised the repair service is being outsourced to 3rd party companies that probably couldn't care less about quality control. Just like the SA once told me that my costume earrings with rhinestones falling off that they'll be sent to Paris for repair. I was skeptical and after waited for several months, I was told that they lost my earrings, they're probably still sitting in one of the factories in China.

 

[PurseCloset]

I was thinking, since Artbag moved to South Florida, I’m considering buying a 22, Lord knows the boutiques here are full of them, and taking one of my 19s that isn’t currently at Chanel’s outsourced repair shops up north and having them take them apart while I film it.

Oh and for everyone that thinks their bags are going to Paris for repair, sorry to disappoint. They get checked in through their repair department in New Jersey then go to a place whom I don’t know if I can name as I’m not sure if they have an NDA or not. Bags that come in to the boutiques before they’re sold and are damaged go directly to their outsourced US repair company without having to be checked in through NJ.

I thought everyone knew this in the US but I’ve seen a lot of people saying that their bag was sent to Paris. Why would anyone think that? Maybe I misunderstood.

I know Chanel has a repair place in the UK and one in China. Not sure where bags in the ME & Africa go but I’m sure they’ve got places there as well. I’m assuming that all of APAC goes to the shop in China. Maybe someone in this thread that’s located in greater AP knows for sure.

@TraceySH, do you want to ship your 19 or 22 to Artbag and I’ll make the arrangements? I’m willing to use one of my 19s but out of the 11 I had, I sold the 3 newest ones. A 22 I’d have to go buy but I’m willing to do it.

Thoughts anyone? Do we want to see the most prestigious Hermes repair shop in the US take apart a Chanel?

Over here in Sg , it's stated that defective hardware issues will be sent to Paris and the wait will be up until 6 months but that is only upon assessment if the bag should be sent to Paris otherwise the bags will be locally repaired if minor issues and the wait can be anything up to a month

 

[PurseCloset]

Nice job! I have access to Capital IQ but it is tiered based & customized based on geo & vertical.
Based on reading what you downloaded, that looks like it’s strictly the UK database, correct?

The point that stands out so prominently to me is the inventory turnover of 24. Seriously??? 24??? That certainly explains the quality deficiency now doesn’t it?

Do you have FactSet? Or preferably a Bloomberg account? It would be interesting to compare.

Regardless, now that Chanel via Mousse has been set up as a DBA of Litor which is hmmmm…set up in the Caymans, well that speaks volumes.

Thank you for delving deeper.

ETA: Your subsequent post that went up as I was writing makes all of us look like sheep now. Thank you for doing the due diligence.

This is all very interesting. Need some financial education here

Can explain what would be a desired and healthy turnover inventory is, if not 24?

Just googled this definition,"The turnover ratio is derived from a mathematical calculation, where the cost of goods sold is divided by the average inventory for the same period. A higher ratio is more desirable than a low one as a high ratio tends to point to strong sales."

 

[PurseCloset]

I will send you my beige one that smells like chemicals. I can't use it. It's embarrassing, the smell. Shall we donate it to science?

My black small classic flap purchased in June smelt that way too especially the interior and i thought it's the norm . Got it frm hongkong boutique. where abouts is the beige from?

 

[PurseCloset]

Thank you. They are stealthy aren’t they? I think I speak for everyone here in asking those of you in countries that don’t use the Euro in EU countries to chime in as well.
The price increase in the UK is quite telling as to where the Wertheimers are headed.

Singapore classic flap medium hasnt changed yet since Nov, still at SGD 13,190 (including local tax) which works out to be about USD 9,620 although i hear Japan and South Korea has increased theirs .

 

[ntntgo]

This is all very interesting. Need some financial education here

Can explain what would be a desired and healthy turnover inventory is, if not 24?

Just googled this definition,"The turnover ratio is derived from a mathematical calculation, where the cost of goods sold is divided by the average inventory for the same period. A higher ratio is more desirable than a low one as a high ratio tends to point to strong sales."

My point exactly. 24 is insane. That’s how fast they’re turning over inventory & replacing it. Yet people think it’s being hand made????

The average inventory turnover rate for Mercedes Benz is 8. So Chanel is cranking out products at a rate that is over 3 times what Mercedes Benz is. Hermes for 2021 was 1.97.

The only people that benefit from that high of a turnover rate is the investors.

What I’d like to see that I can’t find is Chanel’s inventory days on hand.

If anyone can find that, I’d love to know because if their IDOH is low and their turnover rate is high, plunge in quality across the brand makes sense. It also means they’re back in “We’re for sale” mode.

 

[880]

Understood that chanel is a private company but don't you get disappointed as a consumer that you found out there are so many shady business decisions made by chanel like rampant price increases? like you spent thousands of dollars on bags, RTW, to realise your money doesn't heavily reinvest back to the company for a better good eg. better quality products, increase production lines so everyone won't be over panicking if they are unable to secure their desired seasonal items.

I think that rampant price increases and lack of transparency are rampant throughout fashion, especially premier fashion houses that are big business (as opposed to luxury). At this point for example, Dior RTW is skyrocketing in price but of flimsy construction. In fact, some chanel items seem better made and better value Lol. The disgruntled chanel customer always has the option to walk away and not to purchase leather goods. Many of us primarily buy bags from Hermes or another brand nowadays. And, I say this having had good luck with the many chanel bags I’ve purchased from the boutique throughout the years.