Among great names in fashion, few rival “Coco” Chanel. Chanel built a fashion powerhouse whose creations were legendary and iconic. The little black dress, No 5 perfume, the tweed suit, the pea jacket and bell bottom pants for women.
Chanel can do no wrong when it comes to fashion, until now perhaps…
Recently Mark Ritson wrote in Marketing Week that Chanel may be getting dusty. Is he far off the mark? According to Millward Brown’s Brandz valuation, Chanel lost 11 percent of its brand value over the past year while the top three luxury brands -Louis Vuitton, Hermès, and Gucci – all gained.
Why? Ritson thinks “much of Chanel’s lost brand value can perhaps be explained by the company’s reluctance to enter China. While brands like Omega and Armani focused heavily and early on the new empire rising in the east, Chanel held back.” Its chief executive Maureen Chiquet said five years ago that “we’re going to let our competitors make the first mistakes in China before we move in.” That’s looking increasingly like a mistake as China’s hunger for luxury and its booming economy continues to outperform expectations.
Ritson noted other signs of Chanel’s malade:
- Store windows uninspirational;
- People he sees shopping in the stores look older on each visit;
- The collections seem “a little too derivative”;
- Chanel just paid a record price for a new store location in London across from a fabulous new Louis Vuitton store – looks like they’re playing catch up.
Last November, Chanel opened its Shanghai store in The Peninsula Hotel with much fanfare and glitz. The extravaganza was attended by government officials, Shanghai billionaires, international fashion press, clients and the actress Vanessa Paradis (the new face of Chanel’s advertising campaign). As only Karl Lagerfeld can stage an event, kicking off with a short film, which The Telegraph described as “Paris Shanghai: a fantasy, in which he imagines Coco Chanel traveling to the city in her dreams, and swapping her couture jacket for a Chairman Mao jacket in the 1960s. The Chinese audience laughs, apparently amused by the idea; as they are by the scenes that depict Chanel in the gambling dens and nightclubs of Shanghai in the 1920s and 30s, accompanied by the Duchess of Windsor and Marlene Dietrich.”
The boutique with over 1,500-square feet is designed to evoke the classic interiors of Coco Chanel’s Paris apartment. Lagerfeld designed exclusive products filled with cultural references sold only in the Shanghai location. The collection included “little red dresses and little red bags (Chanel’s take on Mao’s Little Red Book); black transparent chiffon frocks glittering with red sequins (ready-to-wear for cocktails aboard the Shanghai Express); reinvented Chanel tweed jackets and suits in jade-green or Chinese red, accessorized with thigh-high boots, shiny as Oriental lacquer.” Business was booming. Less than 48 hours after opening, the store sold out of the 28,800 yuan (over $4,000) limited-edition red handbags with “Shanghai Karl Lagerfeld” signature inside. In a city where the “average monthly wage is 2,000 yuan, money seems to be of no object to the girls who flit around the boutique, trying on shoes and jewelery with the practiced alacrity of Carrie Bradshaw in Sex and the City,” reported The Telegraph.
photos courtesy of chanel