Chanel predicts challenging two years for luxury industry

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Luxury fashion house warns 2020 profit will be hit due to coronavirus pandemic and holds on to dividend

Chanel bags and creations on display in a window of a Chanel store in Paris, France, June 18 2020. Picture: REUTERS/CHARLES PLATIAU

It did not give details of the slide in sales so far in 2020 but the next 12 to 18 months would be particularly tough, CFO Philippe Blondiaux said. A strong recovery in countries where the group's shops have reopened could not make up for the lack of international travel. About 85% of the group's stores have now reopened and Blondiaux said Chanel had seen sales surge in China in some weeks. Shoppers were returning in Paris, Milan and Berlin, he said.

Chanel, which still expects a profit in 2020, is reducing advertising and promotions by more than a quarter, cutting production and has cancelled or transformed some events such as fashion shows this year, including by streaming them online.It has increased prices on some products as raw material costs shot up.

 

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