Fashion house Chanel parades its independence as profits rise
By Pascale Denis PARIS (Reuters) - Luxury fashion group Chanel, whose star designer Karl Lagerfeld passed away in February, on Monday reaffirmed commitment to its independence after reporting higher annual sales and profits. The French company's move last year to publish financial results for the first time since it was founded in 1910 by Coco Chanel has fuelled speculation about a sale. But Chanel's Chief Financial Officer Philippe Blondiaux told Reuters on Monday: 'In the most solemn and firm way that no IPO or sale is planned.' 'We've got to live with the fact that we are one of the most desirable brands in the market
By Pascale Denis
PARIS (Reuters) - Luxury fashion group Chanel, whose star designer Karl Lagerfeld passed away in February, on Monday reaffirmed commitment to its independence after reporting higher annual sales and profits.
The French company's move last year to publish financial results for the first time since it was founded in 1910 by Coco Chanel has fuelled speculation about a sale.
But Chanel's Chief Financial Officer Philippe Blondiaux told Reuters on Monday: "In the most solemn and firm way that no IPO or sale is planned."
"We've got to live with the fact that we are one of the most desirable brands in the market. These rumours will unfortunately keep coming back on a regular basis," Blondiaux said.
"Chanel needs to remain independent, in order to have the freedom to make choices that go against the grain, such as no longer using exotic animal skins, or by harmonising prices."
He said independence also helped Chanel to keep its fast pace of investment mainly on its store network, its tech projects and acquisitions such as Spanish company Colomer.
The company has more than doubled such investments to $1 billion in 2018 from a year earlier and will invest at least the same amount in 2019, Blondiaux said.
Chanel, known for its tweed suits, quilted handbags and No.5 perfume, said its 2018 revenues rose 13% to $11.12 billion, while net profits climbed 16% to $2.17 billion.
Strong demand from wealthy Chinese consumers at home and overseas has continued to drive higher sales and profits for big luxury companies in spite of a trade dispute between the United States and China.
In May, Chanel's new creative chief Virginie Viard delivered her first solo collection for the brand in the wake of Lagerfeld's death. Blondiaux said Chanel saw Viard as being with the group for the long term.
Analysts have touted rival LVMH as a possible suitor for Chanel, but LVMH CFO Jean-Jacques Guiony said earlier this month its size would be a challenge for any buyer.
Chanel's sales growth in 2018 was slower than the 19% increase reported by Louis Vuitton and the 33% jump reported by Gucci.
Last year, Chanel enjoyed growth across all of its markets, led by Asia-Pacific where sales rose 19.9%, compared to a 7.8% rise in Europe and 7.4% in the Americas region.
Unlike rivals, who have moved into online sales, Chanel prefers to sell mainly via its network of shops.
"Our position remains the same and will not change. We keep on thinking physical contact in our shops is essential," Blondiaux said.
The fashion house does however invest in digital services for customers and does sell cosmetics and perfumes on-line. Online revenues rose more than 50% in 2018.
There is speculation about who will take over at the top from Chanel's owners, French billionaire brothers Alain and Gerard Wertheimer. Alain Wertheimer, 70, is currently the group's global CEO.
"Like any company, Chanel is preparing a succession plan in the long term. But there is no rush and no need at this time. Alain Wertheimer is in excellent shape," the CFO said.
The company said it paid the Wertheimer family $842 million in dividends in 2018.
($1 = 0.8899 euros)
(Reporting by Pascale Denis; Editing by Inti Landauro/Sudip Kar-Gupta/Susan Fenton/Jane Merriman)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.