In its first year (2022) under CEO Leena Nair, Chanel posted a 17% increase in revenue despite global economic uncertainty, and increased its headcount by 12% driven by growth in areas such as digital, IT, and sustainability. The company plans to hire 5,000 more people this year. The French luxury company registered a 12% decrease in capital expenditure at $668 million in 2022, against $758 million in 2021. A portion of capital spending last year went into reopening of its renovated watches and fine jewellery flagship boutique in Paris, a new boutique at Ginza Namiki, Tokyo, and on growing its standalone fragrance and beauty network. Nair says Chanel continues to invest in technology innovations such as virtual try-ons. Its lipscanner app, for example, matches any colour to the nearest Chanel lipstick shade.
The company has also set up a dedicated open innovation function. “It is focused on long-term, open innovation to help accelerate disruptive ideas across our teams and outside through investment in start-ups, experimentation and events,” says Nair. Meanwhile, last year, Chanel’s sales grew the highest in Europe, at 29.6%, compared with the Americas (9.5%) and Asia-Pacific (14.3%). However, Asia-Pacific was the largest revenue contributor with $8.6 billion, half of the company’s total sales of $17.2 billion in 2022. It is no surprise then that the company is reportedly opening private boutiques for top consumers in key Asian cities. Another priority for Nair is to drive Chanel’s sustainability agenda, with an aim to reduce its carbon footprint by 50% by 2030. The company has launched a sustainability academy, which includes a six-month immersive training programme for business leaders. — Arnika Thakur