Luxury Headlines – 29/05/2023
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Audemars Piguet Appoints New CEO Ilaria Resta
Audemars Piguet has appointed veteran perfume and consumer goods executive Ilaria Resta as its new CEO to take over the reins from exiting CEO François-Henry Bennahmias, who managed to transform Audemars Piguet into one of the leading Swiss watch brands. She joins from Firmenich, where she served as President of Global Perfumery and Ingredients during the company's merger with Dutch group DSM. During Bennahmias' tenure, Audemars Piguet boomed and rose above Patek Philippe to become the world's second-largest independent watch brand. Sales have more than doubled over the last five years to reach $2.2 billion in 2022.
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Chanel and Cucinelli Invest in Italian Wool and Cashmere Manufacturer
Chanel and Brunello Cucinelli have signed a joint deal to acquire a small minority stake in Italian wool and cashmere manufacturer Cariaggi Lanificio. Cariaggi Lanificio is a recognized leader in producing cashmere and natural fibers. Each company will take 24.5% of Cariaggi Lanificio, while the family will maintain the majority share. Cariaggi is Cucinelli’s leading cashmere supplier. Chanel and Cucinelli are highly invested in preserving know-how, commitment to exceptional quality, and product sustainability. This is another critical supply chain acquisition example, as luxury brands seek to gain more control and improve efficiency and profit margins. Much of the acquisition activity is happening in Italy, with its many high-craftsmanship production facilities.
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Louis Vuitton Opens First Airport Lounge in Qatar
Louis Vuitton has opened a new lounge and restaurant at Hamad International Airport in Doha, Qatar. The lounge is decorated with designer furniture, while the restaurant features a menu developed by Yannick Alléno, a three-star Michelin chef, using local ingredients. Louis Vuitton has been expanding into hospitality to give its customers luxurious experiences outside store visits. This marks the ninth culinary project of Louis Vuitton since 2020.
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Chanel Reports 17% Growth in Sales
Chanel reported revenues of $17.2 billion in 2022 (up 17% year-over-year), representing its highest revenue since the company started reporting its numbers in 2018. By region, Europe, up 29.6%, was leading the growth, followed by Asia Pacific, up 14.3%, and the Americas, up 9.5%. According to its CEO, Chanel has strengthened its brand equity by building on the highest standards of craftsmanship and offering the ultimate luxury experience. All categories grew by double digits, with ready-to-wear, fine jewelry and travel retail being successful. Good momentum is already showing in 2023. For the last two years, Chanel’s prices have increased to account for inflation. As it tries to implement a global pricing strategy, Chanel’s prices will likely be impacted by pricing harmonization and continued inflation. However, the CEO stressed that pricing differentials between locations never amount to more than 15-20%. Chanel will continue to focus on telling the brand story, providing immersive experiences, building solid customer relationships, and building out e-commerce.
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Armani Group Announces Revenues Exceeding €2 Billion
Due to a travel rebound across Europe and the US, Armani Group reported a 16.5% revenue growth in 2022 to €2.35 billion. The first 2023 business quarter is also starting strong, as revenues increased by 18% year-over-year, with all sales channels growing. Direct retail was up 17%, wholesale was up 16%, and e-commerce was up 9%. In 2022, Europe increased the most (24% year-over-year), followed by the US (19.5% YoY). Asia was still impacted by Covid restrictions and lockdowns in China, which explains the 6.3% drop in revenues YoY. However, sales in Asia grew by 14% in the first 2023 business quarter, pointing to the start of an overall recovery in the region. In the first quarter of 2023, the company saw continued positive momentum in Europe, while the US showed signs of a pullback. Like many other brands, Armani hopes to offset the pullback in the US through increased sales in Asia.
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