French fashion group Chanel released full year earnings for the first time on Thursday, laying down a marker as one of the luxury world's biggest labels by sales after both revenue and profit grew strongly in 2017. The privately-owned company, famed for its tweed suits, cushioned handbags and No5 perfumes, has long intrigued the fashion industry by keeping a close lid on numbers. It also has a maverick streak, being one of the only brands to shun online sales of its clothes.
The move to publish was "absolutely not" a precursor to a stock market listing, Chief Financial Officer Philippe Blondiaux told Reuters. He also ruled out a sale. "It's exactly the opposite - this financial statement shows that we are amazingly solid financially and we can keep our status as a private, independent company for the next few centuries," Blondiaux said in an interview.
"Instead of having others report, we've decided to put the facts on the table about who we are," he added, saying the brand, which has long leaned on octogenarian designer Karl Lagerfeld for its womenswear styles, had previously preferred to let its creative officials speak instead. Chanel posted revenues of $9.62 billion for 2017, an 11 percent rise from a year earlier at constant currencies, helped like its peers by a strong performance in Asia Pacific especially, where sales grew 16.5 percent. Profit rose 18.5 percent from a year earlier to $1.79 billion.
The disclosure puts Chanel - thanks in part to a big make-up and fragrance business which some rivals lack - in close contention with luxury labels like Louis Vuitton, owned by LVMH and with estimated sales of over 8 billion euros ($9.2 billion) a year. Italian label Gucci, of French conglomerate Kering , this month outlined its aim to overtake Vuitton by eventually hitting 10 billion euros in sales, from 6.2 billion euros last year.
Luxury companies have broadly benefited from a rebound in Chinese consumer demand over the past two years, momentum that has carried into the first quarter for many. But not all brands have enjoyed a sales boost, with some struggling to capture younger shoppers for instance.
"We are optimistic on 2018," Blondiaux said. Chanel, founded in 1910 by Coco Chanel, also unveiled an internal reorganisation that consolidates almost of all its activities under a UK registered company and includes some of its other small businesses like swimwear label Eres. Its filings showed the firm's secretive owners, French businessmen and brothers Alain and Gerard Wertheimer, stepped down from the board of the UK-based Chanel Limited in December.
Blondiaux said it was "their decision" not to sit on the board, only adding that Alain Wertheimer remained chief executive of Chanel and that several other board changes took place as a result of the internal rejig. Chanel was investing in technology and in digital services linked to its stores, Blondiaux said, adding spending on this could double from 2017 levels of $429 million.
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