2021 was a big year for Chanel, and Chanel VIPs, who will soon be getting their own private shopping boutique with an experience catered to them, have soaring profits to thank. The French luxury powerhouse recently released its annual revenues and profit, Business of Fashion reported earlier this week, citing a 50% jump in revenues, even beating out its pre-pandemic profits.
Chanel Trumps Its Competitors
While profits fell the year prior due to the global pandemic and store closures, in 2021, Chanel rebounded, with its sales growing far quicker than the luxury market as a whole. Chanel, which increased its prices a whopping 3 times last year, stated that it believes growth was driven by a balanced mix of both higher volume and price hikes. Additionally, it’s worth noting that the luxury brand largely focused on its marketing efforts in 2021, spending a massive 1.8 billion dollars on advertising campaigns and digital marketing.
Revamping the Customer Experience for VIPs
The most intriguing and likely controversial bit of info to come from the House of Chanel is its push towards expansion, but not how one might think. With its increase in sales came an increase in foot traffic and, in turn, customer wait times. The brand is committed to serving customers, especially its big spenders. By early 2023, Chanel aims to roll out private boutiques that will strictly serve its top-spending clients.
“Our biggest preoccupation is to protect our customers and in particular our pre-existing customers. We’re going to invest in very protected boutiques to service clients in a very exclusive way.” – Philippe Blondiaux, CFO
Currently, Chanel lags in terms of its number of boutiques worldwide, with its presence roughly half as noticeable as Gucci or Louis Vuitton. A notoriously tight store network is something the company will continue to maintain. It currently has only 250 fashion boutiques, which begs the question, will these private boutiques really make a difference in curbing wait times for customers?
What do you think about Chanel’s move towards calculated expansion?
