LV'S Parent Company Hinted That It'S Difficult To Swallow CHANEL And The Latter'S Valuation Approximated 100 Billion Euros

CHANEL is ushering in a new starting point. Whether this 100 year luxury brand can continue to be independent has attracted much attention from the industry.

According to fashion business news, after the death of Karl Lagerfeld in February this year, rumors that CHANEL will be acquired by LVMH of Louis Vuitton parent company are again rampant. LVMH chief financial officer Jean-Jacques Guion responded at the closed door meeting of last week's analysts. With the current business scale of CHANEL, the valuation is approaching 100 billion euros, far beyond the 50 billion euros speculation by the media, which is a huge challenge for any buyer.

At the end of 2017, French media also reported that LVMH boss Bernard Arnault was meeting with the Wertheimer family of CHANEL holders, but Bernard Arnault subsequently responded that the group had never been in contact with CHANEL.

According to the fashion business express, as of Friday, the market value of LVMH was 180 billion 600 million euros, the market value of Gucci's parent group was 60 billion euros, and the market value of Hermes was 64 billion 400 million euros, which means that CHANEL has become the world's second largest luxury group after LVMH.

Another industry believes that CHANEL has become the world's most valuable single luxury brand. After all, LVMH has more than 70 brands. The main business of Kai Yun group is also composed of three core brands: Gucci, Saint Laurent and Bottega Veneta.

Up to now, CHANEL has not responded to the relevant statements, but the brand has already announced several times that it will never sell or search for IPO, which will not change.

What it means is that in June 2018, CHANEL released its first annual public revenue report, which was founded in 108 years. Its annual sales volume reached $9 billion 620 million in 2017, operating profit of $2 billion 690 million, net profit of $1 billion 800 million, and emphasized that the brand had no debts at present and had 1 billion 600 million dollars in cash.

Brand is still an unshakable position in the luxury industry.

Beauty has become a cash cow for CHANEL. From the beauty store to the first men's beauty show, the brand's moves in the beauty business are becoming more frequent.

The original brand founder Gabrielle Chanel relies on Pierre Wertheimer to invest in the establishment of the brand. The former only accounts for 10% of the shares. This share is also acquired by the Wertheimer family in the future. Today, the CHANEL group is held by the Alain Wertheimer and Gerard Gerard of the grandson of Pierre Wertheimer. According to Bloomberg, the dividend of the two brothers in 2016 is as high as 3 billion 400 million dollars. At present, their total fortune is about 46 billion dollars.

What is puzzling is that although the two brothers are old, they remain mysterious about successors. Whether they are taking over their management successors or being a successor to the creative director in Karl Lagerfeld's life, they are all silent about the outside world, which has even increased speculation about the Wertheimer family's intention to launch the CHANEL group.

On the other hand, Bernard Arnault's sons and daughters are holding important positions in the group. Their only daughter, Delphine Arnault, has joined the group board this year. The 43 year old is the youngest member of the board. She is regarded as a successor.

Despite the effort to keep a low profile, the Wertheimer family still keeps close control of the group.

In 2016, CHANEL's original CEO Maureen Chiquet was sacked for disagreements with the Wertheimer family in terms of strategy. Currently, CHANEL Alain Alain Wertheimer is the brand CEO and Bruno Pavlovsky serves as president of the fashion fashion department.

Philippe Blondiaux, the brand's chief financial officer, said in an interview that Alain Wertheimer, now nearly 70 years old, is still in good shape and will have a new idea every 5 minutes.

Philippe Blondiaux admits that there is a long internal debate over whether or not to disclose performance data within the group. However, in the face of increasingly fierce competition, conservatism should not be a stumbling block for the further development of CHANEL.

The group realized that it was time to put the data in front of the public to prove that it was a very strong financial position.

Last year, CHANEL announced a major restructuring plan to regulate all its businesses to the same department and move to London, England to enhance operational efficiency.

However, the death of Karl Lagerfeld has added more uncertainty to the future of CHANEL. At present, the power to take over the initiative is Virginie Viard, which has worked with Karl Lagerfeld for more than 30 years.

Bruno Pavlovsky said in a media interview before the CHANEL early spring holiday series, which was held last month, that Virginie Viard is trying to integrate its own understanding and perception of the brand into the design of CHANEL. At the same time, it continues the expectations of Karl Lagerfeld to the brand and combines the legend with contemporary aesthetics. "But she needs time to build up self-confidence, as the successor of Karl Lagerfeld needs great pressure."

At the same time, CHANEL is still looking for new growth points. Following the launch of the first men's beauty series in Korea last August, it was settled in September by the fashion rally YOHO, launched by the domestic trend group, YOHOOD.

In March this year, CHANEL first released the menswear capsule series launched with the long-term brand ambassador Pharrell Williams. Analysis shows that in the current situation of fast development of men's wear market, this may be a signal for CHANEL to enter the men's wear market.

According to L2 Inc, the growth rate of men's clothing sales has exceeded the growth rate of women's clothing sales since 2009. According to the data of European Union information consulting firm, men's wear sales are expected to exceed women's clothing sales in the next six years.

Perhaps it is worried that the brand image will weaken further in the hearts of young consumers due to the death of Karl Lagerfeld. In April, CHANEL issued an official statement that its brand name was written in the form of all capitalized CHANEL, which was used in the whole line of business including advanced customization, clothing, accessories, perfume and so on. At the same time, the name of the founder legend designer Coco Chanel also used capitalization to express her efforts to make the brand a proper noun.

From April to June this year, the brand also organized Mademoiselle Priv e into the Chanel exhibition in the West Coast Art Center of Shanghai. Through the highly similar device and layout with the headquarters in Paris, the brand has created an extremely immersive experience for visitors, aiming at cultivating more potential consumers.

It is reported that CHANEL will continue its public performance report this year, and Bruno Pavlovsky revealed that 2018 was another year when its performance exceeded expectations.

In regard to the fact that CHANEL stores in Paris have been forced to shut down for more than a month due to their "yellow vests", whether it will affect their performance, Bruno Pavlovsky believes that the focus is not on sales but on service, which will cause loyal consumers to be troubled because CHANEL can't meet their needs when they shop.

Keeping the mystery together and occasionally slighting the sword is a clever strategy for CHANEL. It also means that the luxury industry is a competition with great need for wisdom.

According to fashion business express, in 2017, Gucci, which surpassed Hermes, launched a new record last year. It entered the 8 billion euro club for the first time. Bernard Arnault also disclosed the core brand Louis Vuitton performance for the first time. Last year, its sales volume was 10 billion euros, and the difference between the two was only 2 billion euros.

In the first quarter of this year, LVMH sales surged 16% to 12 billion 500 million euros over the previous year, exceeding analysts' expectations of 12 billion 200 million euros, and organic growth of 11%. Sales of fashion leather goods department, including Louis Vuitton, DIOR and other luxury brands, rose 20% to 5 billion 110 million euros, a new high in 5 years, an organic increase of 16% last year.

In the three months ended March 31st, Kai Yun group's revenue continued to be driven by core brand Gucci performance, up 21.9% to 3 billion 785 million euros over the same period.

Among them, Gucci sales rose 24.6% to 2 billion 326 million euros, but the growth rate slowed sharply compared with 37.9% in the same period last year, but the retail sales in Asia Pacific, including China, increased by 35%, mainly due to the contribution of Chinese consumers.

Hermes's first quarter sales surged 16% to 1 billion 610 million euros, up 12% from the fixed exchange rate, more than 10% of the company's previous forecast, but mainly driven by an increase in handbag production.

During the period, sales of leather goods department of Hermes covering handbags increased by 16.9% to 808 million euros. Watch business became the fastest growing sector in the quarter, and rose 22% to 43 million 400 thousand euros at fixed exchange rates.

According to the annual ranking list of the 500 most valuable brands in the world released by Brand Finance, the brand value of luxury brands such as CHANEL, DIOR, Cartier and Louis Vuitton has been significantly improved from 2018 to 2019, with the strong promotion of Chinese consumers and the Chinese market. The fastest growth is CHANEL, which has jumped 95.1% in the past year, ranking from 299th in the previous year to 149.

The rankings of Gucci and Hermes did not change, ranking 182nd and 163rd respectively.

When the dramatic changes of innovation and consumer groups have become a consensus, it also means that the turning point has arrived. The sales data of Louis Vuitton, CHANEL and Gucci are constantly drawing closer, and this competition for the number one luxury brand will become increasingly fierce.