Chanel is to open a new concept of boutiques to cater to its most important customers: the ultra elite. These private stores would ensure the Paris-based luxury house can service high-spending VICs (very importat customers) who will no longer need to queue for handbags and service at its ‘regular’ brick and mortar outlets.
Chanel currently operates 250 stores worldwide, not including its beauty retail. In major cities, where most of Chanel’s boutiques are located, shoppers include a mix of tourists and browsers, meaning unless returning customers have appointments, they may be joining long queues to be served.
Chanel CFO Philippe Blondiaux told the Business of Fashion that Chanel’s “biggest preoccupation is to protect our customers and in particular our pre-existing customers. We’re going to invest in very protected boutiques to service clients in a very exclusive way."
Chanel shuns e-commerce
Exclusivity lies at the heart of luxury fashion, and a move to private stores and high-end service is much in line with Chanel’s strategy, which has seen the house significantly raise prices on its handbags over the past few years. Chanel is one of the only luxury houses that does not sell its collections online, with the exception of beauty. The company said it will not embrace e-commerce for the foreseeable future, a strategy that is paying dividends after it posted a 50 percent increase in revenue in 2021 to 15 billion dollars.
To compare, Chanel's iconic 2.55 bag cost less than 7,000 dollars in 2019 and today retails for 10,000 dollars, much in line with Hermès’ Birkin and Kelly ranges.
Blondiaux commented in Chanel's trading statement that despite the challenging backdrop in 2021, the company's results highlighted remarkable customer demand particularly from its local client base. "2022 will be another year of significant investment to support the long-term health of the Chanel brand and to deliver our sustainability ambition, whether in our people, continued focus on quality, customer experience, our boutiques, or in our supply chain transformation.”