Chanel Sales Jumped 16% to About $20 Billion in 2023

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French luxury brand Chanel reported a 16% increase in sales to $19.7 billion in 2023 on a comparable basis, surging to a record high for the privately owned luxury house. The company also reported plans to increase capital expenditures by 50% in 2024.

According to Chanel, sales in 2023 rose 14.6% to $19.7 billion, with double-digit growth in fashion, fragrance, and jewelry products. On the other hand, net income rose 3% to $4.7 billion, slowing from the 14.3% profit growth recorded in 2022.

Chanel CEO Leena Nair said the company has invested heavily in research and development, expanded its retail distribution network, and increased its staff by 14% to enable further growth. Commenting on the 2023 financial results, Nair said, “underline sustained investment in building the desirability of our brand, creating the ultimate luxury experience for our clients and supporting our people to grow and develop.”

Today, many luxury brands are managed under the giant conglomerates of LVMH or Kering, but only Chanel is still owned by the Wertheimer family and continues to turn a profit.

Chanel, the world’s second-largest brand after Louis Vuitton, has continued implementing bold price increases over the past few years. For example, Chanel’s signature classic medium flap bag was priced at $10,200 in 2023, whereas as of 2024, it sells for $10,800. Similarly, the price of a Chanel boy bag would increase by 4-5% to double digits, with a current selling price of $6,400-$7,300.

The company has formally revised its prices twice yearly and plans to do so again in the second half of this fiscal year.

Meanwhile, Chanel CFO Philippe Blondiaux noted that the brand’s Asia Pacific sales grew 17.7% to over $10 billion, while there are only 18 Chanel boutiques in China. Citing the fact that Chanel has 18 boutiques while its competitors have about 40 to 50, he said, “China is still a place where we are, I would say, under distributed.”

The company plans to open a private salon and repair center in Shanghai in the coming months as part of an overall increase in capital spending this year to $1.8 billion from $1.2 billion in 2023.

In addition, sales in the European market grew 18.8% to $5.6 billion, while growth in North America was down only 2.6% to $3.9 billion.

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