Chanel to Open More Stores in China Even as Growth Shifts Abroad

Chanel plans to invest in opening more stores in mainland China. (AFP)
Chanel plans to invest in opening more stores in mainland China. (AFP)
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Chanel to Open More Stores in China Even as Growth Shifts Abroad

Chanel plans to invest in opening more stores in mainland China. (AFP)
Chanel plans to invest in opening more stores in mainland China. (AFP)

Chanel plans to invest in opening more stores in mainland China despite a shift of spending by Chinese shoppers to other markets as they resume travelling, the French label said on Tuesday.

"The ability to scale is really important," said Leena Nair, chief executive of the privately-owned label, known for its tweed suits, quilted handbags and No. 5 perfume.

On a recent trip to China, she said she noticed young shoppers were interested in luxury purchases as longer term financial investments.

First quarter sales updates from luxury brands showed contrasting results in mainland China, offering little reassurance that Chinese demand for high end fashion is bouncing back quickly.

This has cast a cloud over the outlook for the industry, which had high hopes that the key market would provide a boost as the post-pandemic splurge in the United States and Europe abated.

"China is still a place where we are, I would say, under distributed," said Chanel chief financial officer Philippe Blondiaux, citing the label's 18 fashion boutiques compared to competing brands that have around 40 to 50 stores.



Hermes 2Q Sales Rise 13% on Continued Appetite for High-End Luxury

People stand with Hermes shopping bags as they wait at a traffic light in Tsim Sha Tsui, a bustling shopping hotspot, in Hong Kong, China December 5, 2023. (Reuters)
People stand with Hermes shopping bags as they wait at a traffic light in Tsim Sha Tsui, a bustling shopping hotspot, in Hong Kong, China December 5, 2023. (Reuters)
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Hermes 2Q Sales Rise 13% on Continued Appetite for High-End Luxury

People stand with Hermes shopping bags as they wait at a traffic light in Tsim Sha Tsui, a bustling shopping hotspot, in Hong Kong, China December 5, 2023. (Reuters)
People stand with Hermes shopping bags as they wait at a traffic light in Tsim Sha Tsui, a bustling shopping hotspot, in Hong Kong, China December 5, 2023. (Reuters)

Birkin-bag maker Hermes reported a 13% rise in second-quarter sales on Thursday, demonstrating the continued appetite from wealthy shoppers for its luxury handbags, even as less affluent consumers pull back.

Sales at the French luxury group grew to 3.7 billion euros ($4.02 billion), a 13% organic sales rise that strips out currency fluctuations. The figure was in line with analyst expectations, according to a Visible Alpha consensus.

Operating profit for the first half was 3.1 billion euros, compared to a forecast from consensus provider Visible Alpha for 3.2 billion.

One of the most steady performers in the luxury goods sector -- even as economic conditions worsen -- the French group's results stand out after a string of disappointing earnings updates from peers which have raised investor concern about uncertain prospects for the sector in the coming months.

Hermes' famously classic designs and tight management of production and stock have helped reinforce the label's aura of exclusivity, and CEO Axel Dumas told reporters the company had seen "no big interruption in trends".

However, he said Hermes was seeing slightly less traffic with aspirational clients, which was impacting higher volume products like fashion accessories.