Chanel’s efforts to curb grey-market boost sales in China

While leading luxury goods retailers such as LVMH and Hermes have attributed slowing sales of fashion and leather goods to weak global economic conditions, Chanel, the second largest luxury brand in the world is optimistic about its prospects ahead. The company, with its efforts to get rid of grey market sales of its goods, has managed to increase revenues in China despite lower demand.

As a part of strategy to stop smugglers from buying goods from one market to sell in another grey market, the company bridged the price gaps of Chanel products in countries like the United States, Europe and Asia last year. The effort, the company said, has led to almost a double-digit rise in sales in China.

However, the company foresees slow sales rise ahead due to decline in global tourist visits after the recent terrorist attacks, slowing economy is China, and low oil prices that have made an adverse impact on the buying decisions of shoppers from Russia and the Middle East. At the same time, Chanel anticipates positive momentum in the United States, Britain, Russia, China, Japan and Korea.

The company is all set to launch its latest Cruise collection in Havana, at Cuba's first big fashion show since the 1959 revolution, after the United States and Cuba decided to restore diplomatic ties in July, last year.

Picture:chanel.com