On the last day of Paris Fashion Week this season, French luxury brand Chanel held its Spring/Summer 2023 Haute Couture Show, the 17th ready-to-wear show led by female designer Virginie Viard as the brand's artistic director. If Virgine was still a little shy when she officially took over the mantle of "Galeries Lafayette" Karl Lagerfeld in February 2019, she is now calm at the end of the curtain.
In fiscal 2021, Chanel's sales increased 49.6% from 2020 to $15.6 billion, up 22.9% from 2019 before the pandemic; Operating profit reached US$5.461 billion, up 57.5% from pre-pandemic levels. Among them, the ready-to-wear and leather goods business performed particularly well. In fact, Chanel officially stated in its earnings report in May this year: this achievement is due to the successful design of Virginie Viard.
In addition to the fashion business, Chanel's leather goods business is also strengthening its market position. Since 2019, the brand has raised the price of its classic handbags four times, and in March this year, Chanel again raised the price of some products in Europe, South Korea and Japan, which means that some iconic handbags are now twice as expensive as they were before the pandemic in 2019. Paris-based industry data analytics firm Luxurynsight notes: "Chanel may be hoping to use this scarcity to make it a more desirable brand." ”
This article explores four aspects: Over the past year or so, how has Chanel worked hand in hand with business lines such as fashion, beauty and jewelry watches to become a "more coveted luxury brand"?
- Female designer Virginie Viard "monopolizes power" and highlights femininity even more
- Promote the construction of omni-channel beauty and strengthen the application of iconic elements
- Deeply cultivate "creativity" and "DNA", and focus on jewelry and watch business
- Enhance the store experience and maintain the top customer base
Female designer Virginie Viard "monopolizes power" and highlights femininity even more
In February 2019, Karl Lagerfeld, who had been with Chanel for 36 years, passed away with his long-standing collaboration: Creative Studio Director Virginie Viard and Image Director Eric Pfrunder as Chanel's Co-Artistic Director, responsible for fashion design (including haute couture, ready-to-wear and accessories collections) and brand identity (including advertising, visual and photography, etc.).
In May 2019, Virginie Viard released her first solo show, the Chanel Cruise 2020 series. After the release of this big show, it was once commented by foreign media as nothing more than "the continuation of the Galeries Lafayette catwalk tradition", but Bruno Pavlovsky, president of Chanel fashion, highly recognized Virginie.
Bruno Pavlovsky told The Guardian ahead of the show: "Virginie has done a fantastic job and she'll be here for a long time. When you've been Karl's second-in-command for 30 years or more, you're invisible to the outside world. But Virginie, like Karl, has the ability to see new trends, she understands the mood of the times, and she knows Chanel well enough. ”
Above, from left to right: Karl Lagerfeld and Virginie Viard
In May 2021, Chanel officially said that image director Eric Pfrunder officially retired. At the end of the brief two-horse era, Virginie Viard became Chanel's sole artistic director, leading the overall product design and brand image. She is also the first female art director in 50 years since the brand's founder's death. Can Virginie Viard, who has been behind the scenes for many years, successfully step forward and create a Chanel that is truly her own? Many in the industry are skeptical.
Chanel noted in its 2021 earnings report that the brand's ready-to-wear and leather goods businesses performed "particularly well" and explicitly mentioned that "this is due to the success of the Virginie Viard design collection." In her first year after taking power, Virginie delivered a report card that convinced everyone.
The most frequently used word in the industry when evaluating Virginie's designs is "feminine." Bruno Pavlovsky also pointed out in an interview with overseas media in May this year that Virginie has brought a more feminine and free style to Chanel's ready-to-wear collection, which is one of the main reasons why the brand can achieve recovery in 2021.
"Keep your garments light, feminine and designed for wear. I can't see myself doing otherwise. Virginie herself said. In the latest season of the Spring/Summer 2023 haute couture show, Virginie used Chanel's signature tweed fabrics with pearls, sequins, bows, feathers and other femininity, and in this season's runway, Virginie selected models of various body types to convey the beauty of diverse women.
Above: Chanel's Spring/Summer 2023 haute couture collection
"She is adept at revisiting the brand's classics and always giving them a new lease of life. These designs look like her own, not simple replicas. Sofia Coppola, the famous female director who created Chanel's fall/winter 2022 couture series promotional video, once said this about Virginie.
In addition to focusing on creating a Chanel with a personal style, Virginie is also blazing a new trail for the brand's visual identity.
For more than three decades, Chanel's visual identity blockbusters have been strictly controlled by Galeries Lafayette and the internal team, and after the departure of image director Eric Pfrunder, Virginie began to experiment with more possibilities from the outside. In addition to the above-mentioned Sofia Coppola, Dutch photographer duo Inez & Vinoodh, German photographer Juergen Teller, French fashion photographer Karim Sadli, French visual artist Xavier Veilhan and other independent fashion photographers, artists, directors and producers were selected to shoot Chanel's new series of promotional blockbusters.
Above: Chanel's Spring/Summer 2023 haute couture campaign was shot by Dutch photographer duo Inez & Vinoodh and featured by American actress and Chanel brand ambassador Kristen Stewart.
In an interview with The New York Times earlier this year, Virginie said of herself: "I don't feel like an artist at all. Coco Chanel was the real inventor, who got rid of the corset for women. But now everything is there, so I'm flexible, I try to adapt to many things... Whether you are rich or have nothing, it is essentially the same, a way of being. ”
Chanel's proven luxury supply chain also provides a solid foundation for design teams to unleash their creative talents. At the end of 2021, Le19M, a new 25,500-square-meter workshop house built in Paris over two years, was inaugurated, bringing together 11 of the Maison's workshops and employing around 600 artisans.
Since its founder, Ms. Coco Chanel, the Chanel brand has established long-term and in-depth cooperation with artisans and workshops in different aspects of haute couture. In recent years, Chanel has become more involved in acquiring a large number of embroidery, hats, buttons, shoes and accessories workshops with which it collaborates, ensuring the orderly transmission of these traditional craftsmanship and strengthening its position as a leader in the field of haute couture and haute couture.
Promote the construction of omni-channel beauty and strengthen the application of iconic elements
According to the financial report, Chanel's perfume and beauty business showed strong resilience in 2021, with market share increasing in several major countries and increasing online and offline demand from local customers. The brand highlighted that the success of men's fragrance Bleu de Chanel and women's fragrance Coco Mademoiselle drove perfume sales, while the performance of the skincare category helped the beauty business.
To celebrate the 100th anniversary of Chanel N°5 fragrance in 2021, Chanel launched the CHANEL Factory 5 collection with 16 limited-edition products and opened limited-time experience spaces in several key cities around the world (London, Seoul, Chengdu, Hong Kong, Singapore, Taipei and Paris). (See historical report for details:)
In addition, Chanel invested $758 million in channel building last year, adding 50 independent boutiques to its fragrance and beauty business, particularly in Asia, "to provide a more personalized consumer experience." "The direction of the beauty business is direct-to-consumer," Philippe Blondiaux, the brand's chief financial officer, said in an interview with Reuters.
Clearly, Chanel is accelerating its transformation to direct-to-consumer by opening independent fragrance and beauty boutiques, with the ultimate goal of "having an omnichannel business," Philippe Blondiaux told English-language media outlet BOF in May. "It's about making sure we know exactly what customers are looking for at every touchpoint of the consumer journey. We want each channel to have its own identity and purpose, and to be integrated into a global omnichannel strategy. ”
Over the past year, Chanel has also increased its sustainability investment in the beauty business, working with packaging manufacturers such as Knoll Packaging, Groupe Pochet, Sulapac, and Texen to develop eco-friendly perfume bottles and caps for beauty products.
In January of this year, Chanel launched its new beauty product line, N°1 De Chanel, which for the first time combines skincare, beauty and fragrance with sustainable elements. According to the brand, the collection is based on Chanel's research on camellia for at least a decade.
Ms. Coco Chanel once said, "The story of La Traviata is my life. (La Dame aux Camélias was my life.) "Since watching Alexandre Dumas' La Traviata in the theater as a girl, Coco has been attracted to the camellia, which symbolizes elegance, purity and solitude, and after the 1920s, she used camellia elements extensively in fashion, jewelry and watch design.
Today, the camellia has become one of the most iconic symbols of the Chanel brand, and the launch of the N°1 De Chanel series means that Chanel continues to strengthen its "discourse" over iconic elements and apply them to more products and visuals, extending beyond the core brand narrative to enhance the brand's uniqueness in different fields.
This past October 13, Chanel announced the formation of the COMETES COLLECTIVE team, which aims to build an emerging community of makeup artists, and appointed three makeup artists as global creative beauty partners to create makeup products. Chanel said that through this new creative form, he hopes to provide the public with a diverse aesthetic vision.
Deeply cultivate "creativity" and "DNA", and focus on jewelry and watch business
Chanel's jewelry and watch boutique opened in May this year at 18 Place Vendôme in Paris after renovation (below), which is estimated by industry insiders to cost about 30 million euros, which is arguably one of the most expensive luxury brand boutiques ever built on a cost per square meter.
Behind the investment in high-profile stores, Chanel's determination to continue its jewelry and watch business is underlined.
According to the financial report, Chanel's watch and fine jewelry business achieved double-digit growth in all markets in 2021. Previously, industry insiders based on the number and scale of Chanel jewelry and watch boutiques, the sales of jewelry watches in fashion boutiques, and the global wholesale business speculated that Chanel's current annual revenue of jewelry and watch business may be about 1.5 billion US dollars. (If we use annual sales of $15.6 billion in fiscal 2021 as a reference, the jewelry and watch business accounts for about 10% of total sales.)
Even for a luxury brand like Chanel, which is well-known in the fashion and leather goods sectors, it is not easy to cross over and occupy a place in the jewelry and watch sector.
When asked how Chanel "conquered" the jewelry and watch industry, Frédéric Grangié, president of Chanel's jewelry and watch business, said in an interview with English-language media Fashionnetwork in May: "Creativity, femininity and boldness have always been in the DNA of the Chanel brand. Whether it's jewelry or watches, we've followed two key elements from the start – creativity at its core, and having our headquarters in Paris. For the watch business, we have created a technological and industrial environment that allows us to express our creativity and make it almost perfect. We moved our watch business to Switzerland to achieve a balance [with the jewelry business]. ”
In addition to increasing expertise in the field, Chanel's know-how in the fashion sector provides an inexhaustible source of inspiration for the brand's jewelry creations. In 2020, Chanel launched the Tweed de Chanel High Jewelry collection, inspired by the brand's tweed fabrics. "Many companies want to express fabric texture with jewelry, but only our craft can successfully do that, and tweed is the key to our DNA." Frédéric Grangié said.
Above: Tweed de Chanel High Jewelry collection
In the watch business, the female customer base has always been the core target of Chanel, Frédéric Grangié pointed out: "Chanel is different from the business strategy of other watch brands, we do not particularly emphasize who we do not sell to, especially we mainly sell to female customers". In 1987, Chanel's first watch collection, Première, was inspired by the architectural layout of Place Vendôme and the No. 5 perfume stopper. In June this year, the brand released four classic watches included in the new limited edition watch series CHANEL WANTED: J12, PREMIÈRE, BOY· FRIEND AND CODE COCO ARE ALSO WOMEN'S WATCHES.
Above: CHANEL WANTED Limited Edition Watch
Frédéric Grangié also revealed that Chanel's jewelry watch stores currently have the following three types: 58 jewelry watch stores, which are expected to reach 60 by the end of this year; More than 200 Chanel fashion boutiques sell some of the best watches and jewelry (such as the flagship store at 19 rue Cambon); Wholesale sales cover around 350 high-end watch retailers.
Enhance the store experience and maintain the top customer base
"Our primary concern is to protect our customers, especially old ones." Chanel Chief Financial Officer Philippe Blondiaux said in a recent interview with English-language media BOX. In June, Chanel said it plans to strengthen its exclusive strategy and open exclusive independent boutiques dedicated to top customers, which will launch in early 2023, with Asia becoming the first pilot region.
Luxury brands have long invested heavily in maintaining their VIP base, improving the experience of these top customers by hosting private exhibitions, creating VIP spaces in stores, and upgrading VIP services. Elsie Zhang, director of customer development at Digital Luxury Group, a Swiss luxury research consultancy, pointed out: "VIP customers are more loyal, and their contribution to sales may not be a high proportion of brand performance, but their high repeat purchase rate represents a higher ROI."
Bruno Pavlovsky revealed in May that Chanel has plans to overhaul the flagship store, especially in Asia and China. The brand opens about 10 boutiques a year and renovates 20 stores at the same time, "which usually piques our interest because we can provide more space to protect the privacy of our customers, many of whom want to be isolated in private spaces to avoid showing up in the boutiques".
Just this past September, Chanel opened exclusive VIP salons at Hangzhou Tower, Shanghai Hang Lung Plaza and SKP Beijing.
In the renovated Place Vendôme jewelry and watch boutique, Chanel has set up a non-commercial and intimate space, the Grand Salon. According to Frédéric Grangié, the space houses an extraordinary painting by the Russian-French abstract painter Nicolas de Staël in the 50s of the 20th century, "We may be hosting exclusive private dinners here, so the boutique at Vendôme 18 is not a shop with many goods, it is more personal and maintains a personal relationship with customers." ”