Chanel Publishes Annual Sales in Major Shift for Luxury Brand
Posted June 21, 2018 9:41 a.m. EDT
LONDON — Synonymous with French high fashion and blockbuster Parisian runway shows, Chanel is one of the biggest brands in the global luxury business. Its outrageous octogenarian creative director and the personal style of its chic female founder are the stuff of legend.
But how much the company makes from global sales of its No. 5 perfumes, ready-to-wear collections and array of accessories has always been a closely guarded secret, until now.
In a radical about-turn, Chanel released its annual results Thursday for the first time in its 108-year history, and announced a reorganization that will bring all its various companies under one roof.
The numbers show that Chanel is most likely the largest single luxury brand by sales in the world, outpacing rivals like Louis Vuitton and Gucci. Sales growth is strong, and the company is ramping up investment.
The announcements are, however, more important for their symbolism. At a time of heightened competition in high-end retail and of persistent rumors that it could be a takeover target, the storied French fashion house said it had opened up its books to show that it had the size and the desire to fend off any approaches.
“We realized it was time to put the facts on the table as to exactly who we are: a $10 billion company with very strong financials, plus all the means and ammunition at our disposal to remain independent,” Philippe Blondiaux, Chanel’s chief financial officer, said in a telephone interview.
“We recognize that we are often a subject of much speculation and that people don’t have facts to hand, leading to the circulation of false or misleading information,” he added. “It was time to let the strength of our balance sheet speak for itself.”
The figures released Thursday showed total sales for the 2017 calendar year was $9.62 billion, up 11 percent compared to the previous year on a constant currency basis. That growth was primarily driven by sales in the Asia Pacific and Europe, while operating profit came in at $2.69 billion. Net debt stood at $18 million, with free cash flow of $1.63 billion.