Chanel surpassed 11.1 million dollars in sales for the 2018
financial year. The privately-owned luxury company announced in a
statement that it feels these results demonstrate its financial
strength and its commitment to sustainable, long-term value
creation.
The company had an operating profit of 2,998 million dollars in
2018, which is up 8 percent from the year before. There was a free
cash flow of 1,214 million dollars in after significantly increased
capital expenditures, which increased to more than 1 billion
dollars.
“Chanel has had another strong year,” said chief global financial
officer Philippe Blondiaux in a statement. “Our successful collections
and new product launches contributed to the growth of our business
across all product lines.
“2018 was also a year of significant investment by the group as
part of a strategic multi-year program to secure our supply chains,
accelerate our digital transformation, and strengthen our social and
environmental commitments. These investments and the commitment of our
talented teams will secure the brand’s iconic status and its long-term
development.”
Chanel reported investment of 1,653 million dollars in brand
support activities to deliver the strategy focused on creation and
innovation. It has been making supply chain investments such as the
acquisition of 100 percent of European leather supplier Colomer
Leather Group. It also took an equity stake in Swiss company Kenissi
to strengthen its position within the fine watch industry.
Chanel speaks out against rumors of sale and IPO
Since the death of Chanel’s long-time creative director Karl
Lagerfeld in February, analysts have speculated whether the brand was
looking to change ownership. Chanel remains one of the only
privately-owned luxury fashion brands in an industry where most of its
competitors are owned by conglomerates LVMH or Kering.
While Bloomberg estimated that Chanel is worth close to 113 billion
dollars and could be out of reach for most luxury conglomerates,
analysts have concurred that IPO would be a feasible strategy for the
brand.
However, along with the announcement of its 2018 financial results,
Chanel has again addressed rumors and assures that it intends to
operate as a private company.
“Chanel is not for sale, Chanel is not preparing for an IPO, I just
want to reconfirm that for the hundredth time this year,” Blondiaux
told Business of Fashion. “The numbers we’ve shared show that our
strategy is exactly the opposite of a company preparing for a sale or
an IPO. We’ve increased our level of investments… to prepare for the
long term. We’ve increased our headcount ahead of the curve at the
risk of slightly eroding our short-term margins, which we don’t care
so much about, to prepare for the long term. That remains our
strategy.”
Photo: Chanel AW19, courtesy of Chanel
