Chanel on Tuesday said its revenue fell 18 percent to 10.1 billion dollars in 2020. The Paris-based luxury house said its business was “highly disrupted” due to store closures and suspension of international travel.
Prior to global lockdowns, Chanel had a robust duty-free business, which instantly froze as tourism was halted. While the pandemic has proven to be a profitable time for luxury behemoths Louis Vuitton, Hermes and Dior, many others suffered falling sales. Compensating for supply chain disruption luxury owners raised prices, invested in digital and re-focused on local audiences.
Chanel said it invested 1.12 billion dollars in capital expenditures in 2020, an all-time high in its history, to secure a confident future. The Maison invested heavily in its retail distribution to provide the best customer experience to its clients, including its London Bond Street flagship, renovation of its boutique in Beverly Hills and expansion of its Fragrance & Beauty standalone store network.
Philippe Blondiaux, Global Chief Financial Officer, said in a statement: “The strength of the Chanel brand was clearly demonstrated in 2020 as the business delivered a resilient financial performance in what was a very challenging period for our employees, our partners and for the business itself.”
“Chanel’s focus on creativity and innovation, unique savoir-faire and the agility of our teams and our organisation, helped to limit the impact of the crisis. At the same time, Chanel has continued to prioritise investment to support the long-term health of the brand, with record levels of capital expenditure through the year.”
“In keeping with our long-term approach and commitment to sustainable business, we also launched our strategy to tackle climate change through CHANEL Mission 1.5°. The business has made early progress against the science-based targets we have set, as we look to accelerate the move to a lower carbon economy and help protect the world’s most vulnerable communities and ecosystems from the impacts of climate change.”
Chanel said its operating profit of 2,049 million dollars was down 41.4 percent compared to 2019 but the final quarter of the year saw an improvement in sales.