Both, unbelievably, are up from 2019 numbers; In other words, Chanel is selling more products and making more money than before COVID-19. Revenue was up 22.6 percent compared to fiscal 2019, profit was up 57.5 percent.
The bags in particular are in such high demand that the brand has raised prices several times in the last three years. Depending on where you are in the world, a Chanel flap bag costs up to double what it did before the pandemic.
It’s a success story with a sharp edge: selling more means more Chanel. And more Chanel isn’t necessarily a good thing when your brand is all about the exciting appearance of exclusivity. “We don’t need to sell thousands and thousands more [bags]”, says Pavlovsky. “Chanel is not about being big, it’s about the ultimate luxury positioning.”
To thwart the spread of its own success, Chanel has been placing limits on customer purchases. Not everyone is happy. “The client sometimes finds it difficult, I understand. But it is not easy to make more. That is a challenge. So, there are time delays, there are limits.”
Reports of these limits began to spread last year, first in Seoul, where a fee of one bag per customer per month was introduced to stem the proliferation of resale (as Chanel raises its prices, so do prices in the market). Secondary market). Other regions followed: in London, it’s one per person every two months, similar in North America.
In Australia, it was reported that the most popular styles are failing to make it onto boutique shelves as sales assistants have already assigned them to VIP customers. Although limits are sometimes waived for VIPs or customers who also buy fashion, AFR Magazine He has heard that a quota of two bags a year has been unofficially established.
These measures are a difficult but necessary step, Pavlovsky says, that even VIP clients would have to get used to. So, have they been understanding? “Some yes, some no. But it’s part of what makes Chanel so special. Who could have imagined the situation we had in the last three years? COVID, then Russia. The world is changing. At Chanel, we must be very clear about our next steps. It’s not about getting bigger and bigger, it’s about getting stronger and stronger.”
‘We don’t need more e-commerce’
To understand a brand like Chanel, it’s important to know that it operates as if it were the only luxury fashion house on Earth. Chanel is consistent not only in producing high-quality and highly coveted products, but also in ignoring the prevailing wisdom of the day and sticking to its tweed-adorned weapons.
Creating mystery is what he does best. Clothes sold online? Nope. Celebrity connections? No way. NFT? Absolutely not. He’s barely on TikTok, with less than 1,000 followers and a total of zero videos.
But this, but yes, is what makes Chanel, Chanel. “We want the best quality, the best sophistication,” says Pavlovsky. “We don’t need more e-commerce. We have to go step by step.” That Chanel has survived more than a century says a lot; that it has survived essentially thanks to the strength of its physical stores, its commitment to its heritage and symbols, its loyalty to quality over mass consumption, says much more. What other boss of a multi-million dollar company would declare that his company doesn’t need more e-commerce?
So while other brands have been exploring the metaverse, creating digital clothing, launching collections on TikTok, and partnering with celebrities. of the day, Chanel quietly reinvested in its workshops, building a new 25,000-square-meter headquarters purpose-built for its Metiers d’Art businesses. Le 19M, in the northeast of Paris, brings together the 11 operators hired by Chanel, but not exclusively, who carry out the maison’s embroideries, feathers, lace and more.
When Pavlovsky speaks of growth, this is what he means. “Growth, for us, is about the best quality,” he says. “And it’s not easy to do. We need the best of the workshops. That is getting more and more difficult, more and more expensive. We have more competition.” training new handyman – “manitas” – who make the lace, leather details and headgear of the brand, has been at least three years. Chanel is painfully aware that many of these crafts are at the latter end of the spectrum.
“We need to protect our workshops and their crafts,” says Pavlovsky. “We are developing, every year, more and more artisans in all categories, and we are looking for younger people, people under 30, to join.” Chanel’s future, Pavlovsky stresses, is about protecting and nurturing the fading skills associated with luxury. Doing so means allowing the handyman the freedom to work for other houses, another necessity he is happy to allow.
“If you want the best people, they need to feel like they’re not stagnant,” he says angrily. “The workshops need to feel freedom and fresh air to create and design for other houses. Karl didn’t just work for Chanel, he was completely free to work with whoever he wanted. Virginie is a little bit different, but if she wanted to work for someone else, she would be fine”.
It’s a remarkable admission, especially considering Virginie Viard remains largely unknown, even in the fashion world. In her three and a half years in the role, she has done few interviews, unlike Lagerfeld, who edited magazines, designed for other houses, shot his own campaigns and was famously sublimely nonchalant when it came to the press. (He once told an interviewer that he had asked for a personal valet for her fourth birthday. “I wanted to have my clothes ready so I could wear whatever I wanted at any time of day.”)
Pavlovsky recently assumed the leadership of the Haute Couture Federation, the governing body of France’s fashion industry. Elected for a four-year term, he takes over from Ralph Toledano, Puig’s former fashion boss, who is now president of Victoria Beckham’s business.
It means that Pavlovsky is now the most powerful man in French fashion, but he is diplomatic when we speak in April, when the appointment is only a whisper, saying only that he wished “the right person could carry on Ralph’s good work.”
Losing Lagerfeld, Pavlovsky says, was “so, so hard. It was Karl, you can’t replace him. We had worked together for 30 years.” Viard’s appointment came just eight days later, in what Pavlovsky calls “a smooth transition. Virginie was ready, I was ready. We knew what we had to do. It was difficult, emotionally, for the organization; not everyone was ready. But Virginie was fantastic in that capacity. She really became a leader, and I think that each new collection is better than the last.”
Some argue that Viard’s collections — it produces 10 a year, including cruise, ready-to-wear and haute couture — aren’t as important as the company’s bread and butter: those bags. Pavlovsky heads this in step. “Virginie is sassy, she understands the brand,” he says. “Following people like Gabrielle and Karl…they are very impressive. Not many people could take that. She is more than capable.” In fact, he adds, she “she really is the only one.”
Storytelling is critical to the success of the business, he says, starting with spectacular shows that are now back in full force after the lifting of COVID-19 restrictions. “The shows, the collections… allow us to share not only Monte Carlo, but Virginie’s Monte Carlo.”
This year’s cruise ship show (in Monte Carlo), which takes place a few days after AFR Magazine meets with Pavlovksy, he is “unique”, he says. “It is not fashion week, with 20 minutes to convince. People are coming just for this, from all over the world. They don’t go to 10 shows later. So, we make it as special as possible.”
This year’s beachside parade felt garishly optimistic about the future, conveying a sense that freedom was here again and would stay (surely this is the intended message of a Chanel motorcycle helmet?).
There were tweed jumpsuits, micro mini shorts over racerback swimsuits, and 90s-style hem scarf dresses paired with straw boaters. It was midsummer, come to life; clothing made for the deliciously heady humidity of warm nights, which to some might not feel very “Chanel” at all, given its associations with luncheon ladies.
But here, says Pavlovsky, is the real challenge facing the business: dividing the difference, always, between heritage and dynamism. Trading on nostalgia can carry the brand only so far. We live, after all, in the here and now.
“We live day to day with Gabrielle’s heritage, Karl’s heritage,” says Pavlovsky. “And that gives us an opportunity to prepare for the future, actually, because we have a very strong past. Everything we do is about the following.”
The fashion issue of AFR magazine comes out on Friday August 26 inside The Australian Financial Review.