Credits to
@880 for bringing our attention to this FT article. Sharing here because in this thread
@ntntgo and
@TraceySH discussed the IPO possibility. Some bits below I found interesting (for information and discussion purposes only; all rights go to FT and its writer):
Chanel boss seeks to put IPO rumours ‘to rest’
Chief executive Leena Nair insists that French luxury group will remain ‘a private, independent company’
Chanel has ruled out an initial public offering, insisting that it can hold on to its privately owned status and remain the world’s second-biggest luxury brand.
The sector has remained resilient despite the pandemic, the war in Ukraine and a surge in inflation that has squeezed consumer confidence.
Chanel reported sales of $15.6bn in 2021, the latest annual results it has published, up 22.9 per cent from pre-pandemic levels and making it second only to Louis Vuitton among luxury brands by revenue.
“
I see the return of China. I see the pent-up demand, the pursuit of self-indulgence,” she said in her first interview since joining the 113-year-old brand in January last year.
Asia-Pacific, led by China, accounts for more than half of Chanel’s annual revenues.
But she warned that the US, where sales growth is plateauing for rival
LVMH, “is going through this phase where nobody is really sure whether to be optimistic or pessimistic”. Chanel this week revealed that the president of its US business was departing after 16 years.
She said the company had to “
encourage buying less but better quality” in order to “decouple” revenue growth from sales volumes, “and we have to invest in carbon capture technologies”.
The prices of core Chanel products have risen significantly since the start of the pandemic, with some handbags now selling for 74 per cent more than they did in 2019 in the UK, according to Jefferies analysts.
Top spenders — known in the industry as very important customers or VICs — are becoming ever more important to the sector, with the top 2 per cent of spenders now accounting for 40 per cent of luxury sales, up from 35 per cent in 2009, according to Bain.
To serve such customers better, Chanel has opened a number of “salons privés” within existing boutiques in Asia, Europe and the US.
“There is a focus on ultimate client experience in fashion,” Nair said. “More and more we have to segment different kinds of clients.
We’ve got to think about who are the clients who really get the Chanel experience and are expecting something more refined, more sophisticated.”
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Incidentally, during a work trip in Hong Kong I did notice the immense popularity of C products. They have huge staying power and influence there (and I assume Asia in general) and I reckon that people aren't going to stop buying because of quality tissues a couple of us discuss here on a forum.
