At Chanel, if a job’s worth doing, it’s worth doing well. That the brand has succeeded in asserting itself so magnificently in watchmaking since the turn of the century is a perfect illustration. While its first timepiece, the aptly named Première whose case borrows the characteristic octagon of the N°5 perfume stopper, goes back to 1987, Chanel’s rise to horological glory truly began in 2000 with the launch of the J12 in ceramic, a design now seen as the twenty-first century’s first iconic watch. This unisex style has since lent itself to a raft of complications, many developed in collaboration with Audemars Piguet Renaud & Papi, including the disconcerting J12 Rétrograde Mystérieuse in 2010. Convinced you can never have too much of a good thing, two years later Chanel took the wraps off Mademoiselle Privé, a showcase for the métiers d’art that has continued to grow. Each new piece confirms Chanel’s artistry and a rare command of expertise; qualities that show in the Décor Coromandel collection that looks to the lacquered screens owned by Mademoiselle Chanel for its inspiration.
Come 2015, it was the Boy.Friend’s turn, a “radically elegant watch that dares to challenge established codes”, dixit Chanel. Another smash hit, it gave new impetus to Chanel’s form watches. Last year’s Code Coco tore up what was left of the rulebook with its “is it a watch? is it a jewel?” aesthetic. Of course, the picture wouldn’t be complete without a mention of G&F Châtelain, Chanel’s manufacturing facility, and its stake in Romain Gauthier, calculated to secure supplies of quality components. Thus armed, the brand took it into its head to produce its own movements – a mission brilliantly accomplished in 2016 when Calibre 1 made its debut not, as one might have expected, in a women’s watch but in the Monsieur de Chanel with jumping hours and retrograde minutes. Since then, Chanel has developed and produced Calibre 2, a skeleton movement in the shape of a camelia, and Calibre 3 which it introduced this year inside the Boy.Friend.
Better than Louis Vuitton?
As it turns out, this vocation for excellence shines through not just in Chanel’s products but in the hard numbers too. The brand took everyone by surprise when it published its annual results in June. As a privately-held company, fully owned by Alain and Gérard Wertheimer, it was under no obligation to do so. What these results actually revealed was less unexpected. Not only is Chanel in extremely good health, having net debt of €18 million against total assets of €9.1 billion, total sales for 2017, up 11% on the previous year to €8.3 billion, also put the firm at the tip of the luxury pyramid.
Chanel is Louis Vuitton's most serious challenger... assuming it hasn't already claimed the title of number-one luxury brand.
Chanel’s numbers come just weeks after Gucci, Kering’s new star brand with 2017 sales worth €6.2 billion (+45%), announced its intention to climb to the top of the luxury tree by lifting revenue to €10 billion. The Parisian firm’s riposte puts some order back into a hierarchy that has so far given top billing to Louis Vuitton. However, because the French trunk-maker’s accounts are buried in those of the LVMH group, analysts have to make do with an estimated sales figure of around €8 billion. This makes Chanel the most serious challenger – assuming it hasn’t already claimed the title -, well ahead of Gucci but also Hermès which clocked up €5.5 billion in sales in 2017 (+9%). From a pure watchmaking perspective, Rolex is just behind with an estimated revenue of €4.5 billion.
Chanel didn’t break out results per business but it did give details of sales per region. They show that Europe, which accounts for 40%, stands slightly ahead of Asia (38%), followed by the Americas (22%). That said, the strongest growth last year came from Asia, where sales climbed 16.5% compared with +10.2% in Europe and +5.3% in the Americas. With overall profit at €1.8 billion against an operating margin of 28%, Chanel has yet to match record levels reported by Gucci (34.2%) and Hermès (34.6%) but is still flying high. Mademoiselle would surely approve.