With LVMH and Kering being public companies, it has never been too difficult to see how many of the world's top luxury brands are performing — and who's beating out the others in today's hyper-competitive global market. We know Louis Vuitton is driving growth for LVMH and that Gucci is Kering's rapidly-growing cash cow. And while Chanel has always been presumed to be one of the world's biggest luxury brands, we never knew how, exactly, it stacked up because it's privately owned and not obligated to release earnings details — until now, that is.
For the first time in its 108-year history, the brand released an annual earnings report on Thursday. In 2017, according to the New York Times and Reuters, the company saw $9.62 billion in sales, up 11 percent from the prior year. Operating profit was $2.69 billion.
The brand known for its extravagant runway shows both in Paris and in exotic locations also revealed that it spent a whopping $1.46 billion on marketing last year, a 15-percent increase over the prior year. It also outlined some recent internal restructuring efforts: It established a holding company in London under which it's consolidating all of its businesses, including the swimwear brand Eres.
But what we really wanted to know is how Chanel stacks up against its luxury competitors. Right now, it's believed to be head-to-head with Louis Vuitton, whose annual sales are not broken out individually under LVMH, but are believed to be between €8 billion and €10 billion, or $9.28 billion and $11.6 billion. Gucci, Kering's biggest brand, brought in €6.2 billion, or about $7.1 billion in 2017, though it recently declared a goal of reaching €10 billion in sales in the long term.
The other big question is: Why did Chanel decide to release sales results now? With the company's quiet billionaire owners, brothers Alan and Gérard Wertheimer, and creative director, Karl Lagerfeld, all past retirement age, the easy thing to speculate is that the company is interested in selling. But Philippe Blondiaux, Chanel's chief financial officer, disputed this in interviews. "We are not for sale, and absolutely nothing will change that," he told the Times. In fact, the figures were intended to assert the opposite.
“We realized it was time to put the facts on the table as to exactly who we are: a $10 billion dollar company with very strong financials, plus all the means and ammunition at our disposal to remain independent,” Blondiaux also told the paper. "We recognize that we are often a subject of much speculation and that people don’t have facts to hand, leading to the circulation of false or misleading information," he added. "It was time to let the strength of our balance sheet speak for itself."
Chanel has always been perceived as the best of the best, and now it's shown us the receipts to prove it.