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Chanel, Armani and Ralph Lauren are reporting higher sales for the first quarter of 2023. However, they all point to a slowdown in the United States, due to reduced spending following the health crisis and an increase in the cost of living.
Chanel: slowdown in the United States, recovery in China
Chanel sales have slowed to single-digit growth over the past six months. This is due to a slowdown in purchases by American customers, even though Uncle Sam is one of the House’s main markets.
“It’s clear that the trend has softened since November,” admitted Chanel CFO Philippe Blondiaux of the US market, noting that it had seen double-digit growth in 2022.
However, the brand points out that the increase in sales in mainland China is “more than sufficient to offset the temporary softness in the United States“.
The French Maison, known for its tweed suits, handbags and famous N°5 perfume, generates 50% of its sales in Asia. However, it does not specify the proportion of those made in the United States. By comparison, LVMH and Kering generate 27% of their sales in the country.
This slowdown across the Atlantic can be explained by the fact that young American buyers, the biggest spenders, are not consuming as much as they used to, due to the rising cost of living and economic uncertainty.
“The persistent sluggishness of the US market looks set to be the main focus of attention in the second quarter,” said analysts at HSBC.
Despite this downturn, the double-C brand is not giving up and continues to invest in the United States, as demonstrated by the recent opening of a boutique in Los Angeles.
The company, which employs over 32,000 people, plans to step up recruitment this year, increasing its workforce by 16%, following on from a 12% increase in 2022.
Armani: Asia rebounds, but pace slows in the US
Armani reported yesterday that its sales jumped 18% in the first quarter, thanks to a rebound in Asia. Like Chanel, however, the group notes more modest growth in Uncle Sam’s country, where it expects a slowdown in the coming months.
Revenues for 2022 rose by 16.5% to 2.35 billion euros, boosted by sales in Europe and the United States, while Asia posted a decline, caused by current health restrictions.
The good momentum of 2022 continued into the first quarter of 2023, thanks in particular to a 14% increase in sales in Asia.
During the same quarter, “Europe continued its positive trend (+22%), as did – albeit more modestly – America (+10%), where the coming months should bring a slowdown, which we hope will be offset by the positive trend in Asia“, said the group.
Ralph Lauren: surprise rise in sales
Despite a slowdown in spending on the American continent, Ralph Lauren yesterday announced a surprise rise in fourth-quarter sales and a profit well in excess of expectations, thanks to its new seasonal collections and bags.
Like Armani and Chanel, the group also benefited from a strong upturn in demand in China following the easing of restrictions, noting a marked 30% increase in sales in the country. Across the Atlantic, on the other hand, sales fell by 3%. However, the decline was less marked than expected.
Ralph Lauren’s net sales volume rose to $1.54 billion in the fourth quarter, whereas analysts had forecast a decline to $1.47 billion. For fiscal 2024, the brand expects sales to increase between 1% and 5% at constant exchange rates.
Despite a slowdown in sales on the American continent, luxury goods are holding up well and companies are reporting higher profits, driven by other continents. In the much more accessible sportswear niche, Uncle Sam is also coughing. The VS Corp group, which owns Supreme, Vans and Dickies among others, claims that its profits are in line with expectations, but notes a 3% drop in revenues in the first quarter of 2023, due to a decline in the Americas region.
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Chanel, Armani and Ralph Lauren are reporting higher sales for the first quarter of 2023. However, they all point to a slowdown in the United States, due to reduced spending following the health crisis and an increase in the cost of living.
Chanel: slowdown in the United States, recovery in China
Chanel sales have slowed to single-digit growth over the past six months. This is due to a slowdown in purchases by American customers, even though Uncle Sam is one of the House’s main markets.
“It’s clear that the trend has softened since November,” admitted Chanel CFO Philippe Blondiaux of the US market, noting that it had seen double-digit growth in 2022.
However, the brand points out that the increase in sales in mainland China is “more than sufficient to offset the temporary softness in the United States“.
The French Maison, known for its tweed suits, handbags and famous N°5 perfume, generates 50% of its sales in Asia. However, it does not specify the proportion of those made in the United States. By comparison, LVMH and Kering generate 27% of their sales in the country.
This slowdown across the Atlantic can be explained by the fact that young American buyers, the biggest spenders, are not consuming as much as they used to, due to the rising cost of living and economic uncertainty.
“The persistent sluggishness of the US market looks set to be the main focus of attention in the second quarter,” said analysts at HSBC.
Despite this downturn, the double-C brand is not giving up and continues to invest in the United States, as demonstrated by the recent opening of a boutique in Los Angeles.
The company, which employs over 32,000 people, plans to step up recruitment this year, increasing its workforce by 16%, following on from a 12% increase in 2022.
Armani: Asia rebounds, but pace slows in the US
Armani reported yesterday that its sales jumped 18% in the first quarter, thanks to a rebound in Asia. Like Chanel, however, the group notes more modest growth in Uncle Sam’s country, where it expects a slowdown in the coming months.
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Chanel, Armani and Ralph Lauren are reporting higher sales for the first quarter of 2023. However, they all point to a slowdown in the United States, due to reduced spending following the health crisis and an increase in the cost of living.
Chanel: slowdown in the United States, recovery in China
Chanel sales have slowed to single-digit growth over the past six months. This is due to a slowdown in purchases by American customers, even though Uncle Sam is one of the House’s main markets.
“It’s clear that the trend has softened since November,” admitted Chanel CFO Philippe Blondiaux of the US market, noting that it had seen double-digit growth in 2022.
However, the brand points out that the increase in sales in mainland China is “more than sufficient to offset the temporary softness in the United States“.
The French Maison, known for its tweed suits, handbags and famous N°5 perfume, generates 50% of its sales in Asia. However, it does not specify the proportion of those made in the United States. By comparison, LVMH and Kering generate 27% of their sales in the country.
This slowdown across the Atlantic can be explained by the fact that young American buyers, the biggest spenders, are not consuming as much as they used to, due to the rising cost of living and economic uncertainty.
“The persistent sluggishness of the US market looks set to be the main focus of attention in the second quarter,” said analysts at HSBC.
Despite this downturn, the double-C brand is not giving up and continues to invest in the United States, as demonstrated by the recent opening of a boutique in Los Angeles.
The company, which employs over 32,000 people, plans to step up recruitment this year, increasing its workforce by 16%, following on from a 12% increase in 2022.
Armani: Asia rebounds, but pace slows in the US
Armani reported yesterday that its sales jumped 18% in the first quarter, thanks to a rebound in Asia. Like Chanel, however, the group notes more modest growth in Uncle Sam’s country, where it expects a slowdown in the coming months.
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