Aswat Asharq Al-Awsat :

Aswat Asharq Al-Awsat : Chanel to Open More Stores in China Even as Growth Shifts Abroad

Chanel plans to invest in opening more stores in mainland China. (AFP)
Chanel plans to invest in opening more stores in mainland China. (AFP)
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Chanel to Open More Stores in China Even as Growth Shifts Abroad

Chanel plans to invest in opening more stores in mainland China. (AFP)
Chanel plans to invest in opening more stores in mainland China. (AFP)

Chanel plans to invest in opening more stores in mainland China despite a shift of spending by Chinese shoppers to other markets as they resume travelling, the French label said on Tuesday.

"The ability to scale is really important," said Leena Nair, chief executive of the privately-owned label, known for its tweed suits, quilted handbags and No. 5 perfume.

On a recent trip to China, she said she noticed young shoppers were interested in luxury purchases as longer term financial investments.

First quarter sales updates from luxury brands showed contrasting results in mainland China, offering little reassurance that Chinese demand for high end fashion is bouncing back quickly.

This has cast a cloud over the outlook for the industry, which had high hopes that the key market would provide a boost as the post-pandemic splurge in the United States and Europe abated.

"China is still a place where we are, I would say, under distributed," said Chanel chief financial officer Philippe Blondiaux, citing the label's 18 fashion boutiques compared to competing brands that have around 40 to 50 stores.



Aswat Asharq Al-Awsat : Burberry Axes CEO and Dividend, Warns on Profit

A person walks past a Burberry store undergoing refurbishment on New Bond Street in London, Britain, March 11, 2023. REUTERS/Henry Nicholls
A person walks past a Burberry store undergoing refurbishment on New Bond Street in London, Britain, March 11, 2023. REUTERS/Henry Nicholls
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Burberry Axes CEO and Dividend, Warns on Profit

A person walks past a Burberry store undergoing refurbishment on New Bond Street in London, Britain, March 11, 2023. REUTERS/Henry Nicholls
A person walks past a Burberry store undergoing refurbishment on New Bond Street in London, Britain, March 11, 2023. REUTERS/Henry Nicholls

British luxury group Burberry named former Michael Kors boss Joshua Schulman as its new chief executive on Monday, axing Jonathan Akeroyd after two years as it warned on profit and scrapped its dividend.
A slow down in the luxury sector has hit Burberry harder than rival brands, derailing the 168 year-old British name at a time when it had been trying to move upmarket, and triggering the latest change at the top of the company, Reuters said.
For the 13 weeks to June 29, underlying sales slumped 21% as the company said weakness in its market deepened. It warned that on current trends it would miss forecasts for annual profit and it would scrap this year's dividend to invest in growth.
Burberry has been in turnaround mode for sometime, and under a number of different bosses. Designer Riccardo Tisci exited in 2022 after less than five years. Akeroyd's predecessor left after four years.
"This is a kitchen sink exercise par excellence, and underscores the enormity of the challenge facing Burberry in a world where Chinese sales can no longer be taken for granted," Chris Beauchamp, chief market analyst at online trading platform IG said.
Schulman was CEO of US brand Michael Kors from 2021-2022 and before that brand president at Coach.
While some higher end luxury brands like Hermes and Prada have proved to be more resilient, Burberry has struggled.
Shoppers in the United States and Europe have grown more cautious as the cost of living has risen, while appetite in China has been deflated by a property crisis and record youth unemployment.
Burberry said on Monday it would switch its offer back to be "more familiar" to its "core customers", with a marketing campaign for outerwear to launch in October. Its last collection departed from its classic camel, red and black check print in favor of bold colors.
It said it expected to see an improvement in its second half, and would also find cost savings.
Shares in Burberry have lost 57% of their value over the last 12 months, underpeforming Britain's bluechip index which is up 13%.