Luxury fashion house Chanel reported an 18% revenue fall for the year 2020, hurt by the pandemic and consequent lockdowns, affecting its physical retail sales across the globe.
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Chanel’s total sales for the year fell 18% currency-neutral to US$10.1 billion, according to an update from Chanel’s CFO Philippe Blondiaux. The French company’s operating profit declined to US$2.049 billion, down 41.4% compared to 2019 with EBTIDA dropping 34%.
By region, Chanel’s largest market, the Asia-Pacific region, witnessed the smallest decline, dipping 3.1% to US$5.257 billion, to US$5.426 billion. Europe recorded the largest drop in revenues, down 36%, to US$2.885 billion, followed by the Americas, which fell 15%, to US$1.966 billion for the twelve-month period.
Despite the pandemic-hit results, Chanel saw a record level of capital expenditure at US$1.12 billion, representing 11.1% of sales, “demonstrating Chanel’s commitment to long-term value creation and confidence in the company’s financial strength”, the company said in a press release.
Chanel also invested US$1.36 billion in “brand support activities” in 2020, it added.
“The strength of the Chanel brand was clearly demonstrated in 2020 as the business delivered a resilient financial performance in what was a very challenging period for our employees, our partners and for the business itself,” said Blondiaux.
“Chanel’s focus on creativity and innovation, unique savoir-faire and the agility of our teams and our organisation, helped to limit the impact of the crisis…In keeping with our long-term approach and commitment to sustainable business, we also launched our strategy to tackle climate change through Chanel Mission 1.5°,” continued Blondiaux.
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Looking ahead, Blondiaux told Reuters that the Parisian company currently growing in double-digits and expects this to continue, with China and the U.S. particularly strong.