Skip to main content
BoF Logo

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.

Does Chanel's Barely There E-Commerce Strategy Make Sense in the Pandemic?

The luxury giant does not sell fashion, fine jewellery or watches online, leaving it without alternatives for many of its lucrative categories as stores are closed.
A closed Chanel store | Source: Stefano Guidi/Getty Images
  • Chantal Fernandez

PARIS, France — While brands like Gucci and Louis Vuitton set up extensive online shops over the last decade, Chanel is a lone holdout. Most of its products are only available in its stores, an anachronism that has helped underscore its status at the top of the exclusive luxury market.

But in a pandemic where stores are closed across much of the world, Chanel is in an unusual position.

The privately held French luxury giant has closed all its stores in Europe and the US. And though the brand’s sunglasses, fragrances and makeup are still available to buy online, the clothes, bags, shoes and jewellery that make up the bulk of its revenue are not.

Chanel can probably afford to wait out the crisis even if it doesn’t manage to sell a single 2.55 handbag until the lockdowns are lifted. The brand reported $11.1 billion in sales in 2018 with an operating profit of nearly $3 billion. Beauty represents about one third of revenue, analysts estimate.


What's more, its competitors' e-commerce operations aren't likely to provide much of a boost. Online sales only represent 10 percent of the luxury market, according to Bain. In a recent survey conducted by Bernstein and Boston Consulting Group, luxury executives said they expect revenue to decrease by 30 percent this year.

"I do not expect that online is solving the problem of having closed stores at the moment, as so far it was able to capture just a fraction of the missed sales in store," said Mario Ortelli, managing partner of luxury advisors Ortelli & Co. "It is clearly better to have online operations up and running in this period, but a brand like Chanel can weather this storm if it will not last too long, even without an e-commerce platform."

Chanel is finding ways to keep customers' attention, even if its stores are closed. (All its production sites and workshops are also closed.) The brand has tapped some of its workshops, factories and individuals on staff to produce face masks. It also donated €1.2 million to emergency services, hospitals and medical workers in France along with more than 50,000 masks.

After going silent on social media for the week of March 23, Chanel pivoted from posting product campaigns to pushing a #StayAtHome message. On Friday, the brand’s Instagram account hosted a live concert with Belgian singer Angèle, who appears in its latest eyewear campaign. Chanel also published a playlist of light electronic music on Apple Music to “accompany your days at home.”

Chanel's lack of an e-commerce presence may even work to its advantage. Bernstein's Luca Solca last week recommended luxury brands go "dormant" this year, halting manufacturing and cutting costs (while retaining staff and store leases where possible). That way, brands won't be saddled with extra inventory they would be forced to discount when stores reopen.

Chanel, which is privately owned and wildly profitable, is well-positioned to follow this strategy.

“I think Chanel will get out of Covid-19 better than most,” Solca said. “They remain one of the most desirable brands in the world, ready to rebound strongly.”

Still, the pandemic could nudge one of e-commerce’s last remaining holdouts to reconsider its stance. Luxury watchmaker Patek Philippe, another e-commerce holdout, is allowing its retail partners to sell select models online for the first time.


Ortelli said the pandemic’s lingering effects, such as a long-term drop in travel and a bigger share of commerce taking place online, will make e-commerce even more attractive for luxury brands.

“[E-commerce] is a service that is becoming more important after this crisis,” he said. “It is a pillar of customer service and customer satisfaction.”

Related Articles:

Chanel to Produce Surgical Masks for FranceOpens in new window ]

Coronavirus Casts a Shadow on Luxury’s Cruise Show PlansOpens in new window ]

The Future of ChanelOpens in new window ]

Created exclusively for BoF Professional members, case studies explore the important challenges facing the industry today. Discover more case studies and reports from The Business of Fashion here.

In This Article

© 2024 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions

More from Luxury
How rapid change is reshaping the tradition-soaked luxury sector in Europe and beyond.

The Existential Threat to Independent Brands

This week, The Vampire’s Wife announced its closure and Dion Lee called in administrators, only days after Mara Hoffman said it was shutting down and Roksanda narrowly escaped administration. Many more may follow.

How Chopard Seizes the Red Carpet Spotlight in Cannes

The Swiss brand out-sparkles rivals with a strategy aimed at driving sales as well as image. This year the company dressed Greta Gerwig, Demi Moore and Bella Hadid as well as hosting clients to view (and purchase) its high jewellery range.

view more

Subscribe to the BoF Daily Digest

The essential daily round-up of fashion news, analysis, and breaking news alerts.

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.
© 2024 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions, Privacy Policy, Cookie Policy and Accessibility Statement.