Chanel is getting ready for a tough year in 2024, when the global economic downturn will slow growth in the fancy fashion business as a whole. Let’s look at what’s going on in the fancy world of Chanel.
Chanel is Getting Ready: Global Blues for the Economy
Bruno Pavlovsky, who is Pres. of Fashion at Chanel, told us about the tough times. He says that the economy doesn’t look good everywhere, which is something that other big fashion brands, like LVMH and Burberry, have been saying. It looks like even the high life can have problems with money sometimes.
Chanel is Getting Ready: Not as fancy as before
Bruno Pavlovsky let slip the secret. He said that more people aren’t going to stores because of issues like record-high youth unemployment in China and high prices in the US and Europe. Even more so for first-time buyers and buyers who only buy once in a while.
Luxury sales are expected to slow down.
A study group called Bain says that the personal luxury goods market will slow down next year. Sales have grown by a huge 20% every year for the past three years. This year, they are expected to grow by only a few percent. Chanel made a huge $17.2 billion in 2022, but it looks like it will be hard to keep up that pace.
A normal drop
In order to keep our hopes up, Pavlovsky tells us that this slowdown is “normal.” He tells us that high-end can’t always be successful. He’s not too worried, though, because he thinks Chanel’s strong relationships with clients will keep their profits high.
The very rich take center stage
What did you know? The top 2% of spenders now make up 40% of all luxury sales! Chanel has created special areas in their stores called “salons privés” for high-spenders to make them happy. Cool, right?
Chanel is Getting Ready: Putting money into fun events
Chanel isn’t just about clothes; they’re also putting money into events that last more than one day. For example, they just put on a show called Métiers d’Art in Manchester. There was a football game, a runway that got wet, and an after-party with Primal Scream for the customers. What a party!
The stylish spirit of Manchester
Leena Nair, CEO of Chanel, was beaming at the show, where models strutted their thing in suits from the 1960s, acid-washed jeans, and punk-style sequin skirts. The brand is making a statement by honoring the punk scene and clubs in Manchester in the 1980s.
Changing the Fashion Scene
It’s interesting that Chanel’s Cruise and Métiers d’Art shows now sell more clothes than their normal collections. The brand is going to new places, like the show in Dakar, Senegal, last year, to show off local talent.
Getting used to “quiet luxury”
Because of how the economy is doing, Chanel is seeing a desire for clothes that are simpler and more sober. They call this “quiet luxury.” It looks like people are going for a more casual look these days because things aren’t safe.
Chanel is Getting Ready: Prices going up and “normal evolution”
Some people don’t like how Chanel has raised prices recently, but Pavlovsky says it’s a “normal evolution” caused by inflation. He tells them that they can stay connected with the company without spending a lot of money.
What Chanel Is Looking Forward to
Chanel is going to keep its focus on the basics, like making its supply chain more clear, making sure its goods are great, and building strong relationships with its customers. People should be good all the time, not just when things are going well. But it’s especially important when things are bad.
It looks like even the most expensive names have to deal with hard times in the world of Chanel. If Chanel focuses on relationships, cool events, and a bit of “quiet luxury,” they might be able to weather the storm in style.
