Chanel's CEO Thinks We Are Stupid
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Published 2024-05-23
The fashion label, known for its haute couture designs and fragrances, takes account of inflation and its high standards for materials and craftsmanship in setting prices, CEO Leena Nair told Bloomberg’s Francine Lacqua in a Leaders With Lacqua interview.
“We use exquisite raw materials and our production is very rigorous, laborious, handmade — so we raise our prices according to the inflation that we see,” Nair said.
Luxury brands like Chanel have made headlines in recent years for pushing up the prices of their often coveted goods. A classic medium-sized Chanel flap bag, for instance, rose above the €10,000 threshold for the first time in Paris last month.
Chanel tends to cater to the most affluent customers, on a par with those of Hermès International SCA or watchmaker Rolex, whose spending power typically remains resilient in the face of slowing economic growth or geopolitical turmoil.
Nair said the brand, founded more than a century ago by Coco Chanel, pursues “sensible and modest growth” as it focuses on preserving the quality of its products over the long term — an approach that’s made easier by its status as a privately-held company.
Nair, the former head of human resources at Unilever Plc, became Chanel CEO in January 2022.
She reiterated that the company has no plans to hold an initial public offering. Chanel is owned by the billionaire brothers Alain and Gerard Wertheimer, whose fortunes are estimated at $50 billion each, according to the Bloomberg Billionaires Index.
Founded in Paris but headquartered in London since 2018, Chanel reports its financial performance once a year, generally around late May. Revenue rose 17 percent to $17.2 billion in 2022.
The luxury goods maker behind the Chanel No. 5 fragrance seeks pricing harmonisation across the globe, and sometimes adjusts prices in different markets to ensure that, Nair said.
“Our clients shouldn’t experience excess price differentials. No matter where they buy, we want to stay fair to all our clients everywhere,” she said.
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All Comments (21)
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Modern Chanel bags are machine made and there is little to no hand detailing. In 2008, Chanel stopped using 24k gold plated hardware, and instead, started to use gold toned/coloured hardware (no real gold is now involved, within the hardware) subtly differentiating vintage and modern pieces.
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A friend of mine who actually works at Chanel told me that a classic flap cost £300 to make yet sells for £10k 🤫
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Apparently, we are stupid, because the brand topped €20bn in revenue in 2023. The only reason why I even tolerate the fuckeries at Chanel and Hermès is because they're the few major brands that isn't owned by Arnault or Pinault.
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To think that something that cost £300 to make is selling for £10000 is ridiculous. But for those who buy it at that price, good luck to them.
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They definitely are reintroducing the class system....
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With the Chanel gold hardware it was always plated. They plated it with 24 carat and did it really thick. The gold lasted decades before it needed to be redone. The current ones are still using gold but not 24 carat and certainly not the same thickness of gold lol you will have to replate it sooner.
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"Modest growth to preserve the quality" Do they believe what they say?
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The gold market has benefitted from this; I know many women who buy copies of designer jewellery in 20+ carat gold. And it costs much, much less.
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I call bullshit on this CEO's explanation of the price increases over the past 3 years.
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I cant wear custom jewellery i can only wear real silver and gold! or stainless steel. I wanted a necklace for my 10 years anniversary and low and behold! Non of these 'designer' brands had anything real. All brass!!! So disappointing. Better of getting something 2nd hand.
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Former head of HR at Unilever Plc, says everything as their Products are terrible quality. We can now compare Chanel No.5 to Unilevers Lynx Africa! lol. There's only so far companies can inflate prices for lower quality items. It will Plateau before they have to begin changing.
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Chanel’s CEO is taking a piss yet telling us it’s raining.
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I also think that along with the price increases the brand was heavily helped with the likes of the Karl Lagerfeld Met Gala theme in 2023 as well as the Barbie movie which heavily featured Chanel in costuming.
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Just like Tesla bros and crypto fanatics, loyal Chanel customers will defend the decisions they make. Once you have a following like that, it’ll be harder for Chanel to listen to those who are 1 off or occasional buyers because hey, their frequent shoppers are still buying.
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Influencers who are decent size also receive a lot of free product to promote so they aren’t necessarily paying for it & they have codes for brands so when someone buys sum and uses it they receive a small amount of money😭
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A good Chanel dupe is around 200-400$ without shipping and you're sending that on PayPal, after talking with some guy on Whatsapp. I would not afford to risk that much money tbh. I can take those money and get a custom handmade bag from some people around here. And they are good quality.
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I really hate to say this but I feel they were waiting for Karl to die to cut the quality and craftsmanship and jack up the prices. Karl was the quality control
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The thing is, anyone who would read this article knows its not true. Chanels customer, simply "just" buy the bag. They won't care to notice the ~1k increase.
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The LV items with leftover materials could actually be limited edition trinkets you get when you buy certain products. Making it sort of a surprise and giving the customer that extra special experience…however in the hands of moneybags Arnault “charge them for everything!!! 🤑🤑🤑” I’m surprised they haven’t started charging to visit and try on products at this point.
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Vicuña wool is the finest and most expensive kind of wool anywhere.
