Luxury brand Chanel has reported impressive financial results for 2021, with revenues surging 49.6% year-on-year to reach $15.6 billion. This figure is also 27% higher than in 2019, indicating a strong recovery from the impacts of the pandemic. While not all regions have fully returned to pre-pandemic levels, Europe saw revenues of $4.042 billion, an increase of 40.1% from 2020 but a decrease of nearly 11% compared to 2019. In contrast, the Asia Pacific region performed exceptionally well, with revenues reaching $8.68 billion, up over 53% from 2020 and almost 49% from 2019. The Americas also experienced significant growth, with revenues of $3.529 billion, a surge of just under 80% compared to the previous year, and an increase of over 52% compared to two years earlier.
The strong financial results translated into an operating profit of $5.461 billion, a remarkable increase of 170.6% from 2020 and 57.5% from 2019. Profit after tax also rose significantly, reaching $4.026 billion, an increase of almost 195% and nearly 69% higher than in 2019. Chanel attributes its success to strong demand across all product lines from its local customer base.
Despite the challenges posed by the pandemic, Chanel invested $1.795 billion in brand support activities. This represents a 32% increase, as the company recognized the importance of investing in its brand and maintaining a strong presence throughout the year. Chief Financial Officer Philippe Blondiaux expressed optimism for the future, announcing that 2022 would see further significant investment to support the long-term health of the brand and achieve sustainability goals.
Although Chanel faced difficulties in its retail and travel businesses due to lockdowns and travel restrictions in 2021, the fashion sector showed robust results. Double-digit growth was witnessed across all product lines, driven by the success of Virginie Viard’s creations and collections in leather goods and ready-to-wear. Notably, the Cruise collection was presented in a digital format and showcased in Dubai, marking the first overseas physical show since the outbreak of the pandemic.
The fragrance and beauty segment demonstrated resilience, with market share gains in key countries and strong demand from local clientele. The celebration of Chanel N°5’s 100th anniversary and the success of fragrances like Bleu and Coco Mademoiselle contributed to overall sales growth. The watches and fine jewelry sector also experienced double-digit growth, particularly in the precious jewelry category.
Capital expenditure played a crucial role for Chanel in 2021, with $758 million invested in expanding its retail distribution network and making strategic acquisitions. Despite facing recent sales declines in China due to lockdowns, the company remains optimistic about future growth. Although some stores in China are currently closed, Chanel experienced a double-digit increase in global sales in April. To prevent bulk buying and resale in certain markets, the company may implement purchase limits on specific products in multiple countries.
Chanel’s strategic approach involves ensuring uniform prices across markets and addressing inflation. Due to the weak euro, the company may consider raising prices this summer. Overall, Chanel’s strong performance in 2021 and positive outlook for 2022 solidify its position as one of the leading players in the global fashion industry.
Useful Links:
1. Chanel Official Website
2. Business of Fashion
