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.
Featured photo : © Press