French luxury goods giant Chanel announced that 2021 revenue jumped 50% year-on-year to $15.6 billion, up 23% from 2019 levels before the pandemic.
She explained that she is seriously considering opening stores dedicated to high-end customers or those with higher spending, starting next year.
Business of Fashion reported that operating profit nearly tripled, rising 170 percent to $5.5 billion.
Chief Financial Officer Philip Blondieu said fashion, watches and jewelry continued to thrive, while perfume and beauty performance was more muted due to the continued decline in travel retail.
The statement from the brand (which has the second highest revenue in the luxury industry after Louis Vuitton) confirmed a rapid recovery from the pandemic. Sales fell in 2020 by 18%, a heavy blow, but they rebounded quickly last year as consumers flock to premium luxury brands.
And Chanel’s sales grew much faster than the broader luxury market, and about a third slower than rival leather goods company Hermès.
Blundeau said growth was driven by a “balanced” mix of price increases and higher volumes.
Since the pandemic, Chanel has repeatedly raised prices, citing fluctuating exchange rates and the high cost of materials and labour. The Maxi 2.55 foldable handbag now costs $10,000, up from less than $7,000 in 2019.
In a related context, Chanel spent $1.8 billion on marketing in 2021, an increase of 32%, confirming that the brand’s unparalleled size and purchasing power underpin its strong performance.
The company has also invested $758 million in capital investments including the acquisition of a new building in San Francisco, a store in Miami’s Design District, and the addition of up to 50 stand-alone stores for its fragrance and beauty division.
Famous Chanel remains the fashion industry’s last e-commerce site, refusing to sell essential fashion and handbags online. But it has nonetheless invested in digital initiatives to “support the customer experience,” the company said, including offering tools for booking appointments, a virtual experience, and after-sales service.
Chanel also plans to open separate stores or boutiques dedicated to serving VIP customers with higher spending, starting with its locations in major Asian cities in early 2023.