Chanel shutters US HQ
Chanel is taking further steps to streamline its operations, shuttering its U.S. headquarters and consolidating its top offices in London, Business of Fashion reports. "The majority of our global corporate functions are based in London," the company said in June in a rare annual report.
The privately held luxury company took the unusual step of publishing that report, detailing its finances and branding position and outlining its goals. Sales last year rose 11% to $9.6 billion on a constant currency basis, with growth in all regions, according to that report.
Chanel's moves come as other major players in the luxury sector have streamlined operations. Coach last year rebranded as Tapestry, in an effort to return to its upscale branding and price points; Burberry announced a brand "sharpening"; LVMH has shaken its leadership suite and is amplifying Dior to fortify its own luxury position; and in January Kering shed sneaker label Puma to focus on luxury sales.
Until quite recently, upscale brands reserved digital mostly for marketing, leaving sales for their tony retail stores and fashion events.
But that's changed, along with many other aspects of high fashion. As department stores have moved to capitalize on the popularity of off-price retail, upscale brands have increasingly abandoned that sector, leery of its brand-bruising discounts. Meanwhile, Farfetch, Net-A-Porter and Lyst (which in May got an investment infusion from LVMH) have demonstrated that e-commerce and luxury can co-exist quite nicely.
But e-commerce, fast fashion and globalization have also forced the high-fashion houses to speed up their seasons and their supply chains, among other moves. Chanel three years ago, for example, shifted its handbag pricing so that customers wouldn't encounter differing price tags across various regions, the company noted in its June report.
And the report itself is a sign of the times, an acknowledgement that after 100 years operating its business under cover of private ownership, the company stands to benefit from some accounting of its goals, sustainability efforts and sales.
"Chanel ... has traditionally been very discreet about its business. We have principally devoted our communications to showcasing our products and their creators, a discretion which has contributed to a sense of mystique around the brand," Chanel said in the report. "Today, however, all stakeholders expect greater transparency and accountability from companies. We want to share in more detail how Chanel operates, the commitments we have made as a company, and how we collaborate with civil society, with external stakeholders and with other brands on sustainability issues. This report is a first insight into who we are and how we operate."
Notably absent from it, however, is any sign that Chanel is working on succession plans for chief creative director Karl Lagerfeld, who at 85-years-old is now almost as foremost an architect of the company's aesthetic and brand as Coco Chanel herself.
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