Chanel claims itself to be not immune from the effects of the pandemic

As per the Chief Financial Officer of Chanel, Philippe Blondiaux, the external    environment impacted by the virus-imposed shutdown will severely impact Chanel for the next 18 to 24 months.

He said, “the world has become a very different place in 2020, and Chanel is not immune to impact of the ongoing global crisis.”

As per, the Luxury industry will feel the aftermath of the coronavirus emergency for the next two years if not longer. The CFO said that the revenues and profit of the French fashion labels would be significantly hit in 2020.

Chanel is particularly famous for its quilted handbags; tweed suits and No. 5 perfume and it is also one of the nicest luxury brands in the world along side Louis Vuitton.

Blondiaux feels that the sales for the next 12 to 18 months will be particularly less. He is concerned that even the strong recovery in sales, noticed in some countries where the lockdown has been eased, cannot makeup for the reduced international travel.

“We anticipate that the external environment will continue to impact the luxury sector negatively for at least the next 18 to 24 months,” he said in an interview.

Like many of their rivals, Chanel had to temporarily shut down their stores all across the globe due to the virus-imposed shutdown. Till date 85% of their shops have re-opened across the globe, in China 100% of the stores are currently open, even the shoppers in Milan, Berlin and France are returning to the stores.

The Chanel CFO, Blondiaux said, “This very strong performance with the local clientele will be insufficient to compensate for the absence of international business, for the absence of international visitors and for the fact that our duty free business... is still to a very large extent closed.”

Chanel has always preferred to be an outlier compared to other luxury brands who have moved to online sales. Blondiaux feels that Chanel clients prefer a more exclusive and personalized approach. Blondiaux said that the company will stick to its strategy of selling via brick and mortar stores in spite of the pandemic.

Chanel is still expecting to earn a profit this year by reducing advertising and promotional activities this quarter. They are also planning on cutting production and cancel some fashion shows that were scheduled to happen this year. They are not even preferring to stream online fashion shows. They will go ahead with only two cat-walk shows this year.