Luxury fashion and beauty brand Chanel plans to cut 70 positions in the US, as the company warns it faces a more difficult economic environment.
The decision to cut jobs follows previous moves to limit spending and will help Chanel “better adapt to the current economic challenges,” it said in a statement Wednesday. The 70 jobs represent approximately 2.5% of the US workforce.
Online publication Pac News first reported the cuts this week.
Chanel is generally considered one of the most exclusive and resilient brands, as it targets the wealthiest customers who can spend more than 10,000 euros ($10,420) on a handbag. But the job cuts come as demand for luxury goods has weakened broadly since the post-pandemic boom.
“You expect demand to ebb and flow in any market,” Chanel said, adding that the U.S. remains an important part of the company’s long-term strategy.
The Americas accounted for approximately 20% of Chanel’s total sales in 2023, compared to 28% for Europe and 52% for Asia Pacific.
According to its annual results released in May last year, the company had approximately 36,500 employees in 2023. Chanel reports its earnings once a year.
Last week, Richemont reported better-than-expected sales for the last quarter on the back of strong performance from its Cartier jewelry brand. This has raised hopes that the worst of the slumping demand for luxury products may be over.
LVMH Moët Hennessy Louis Vuitton SE is scheduled to announce its financial results on January 28th.
Consulting firm Bain predicted in November that the personal luxury goods industry was expected to be flat last year, but could rise as much as 4% this year.
Chanel is owned by Alain and Gerard Wertheimer, who are each estimated to be worth about $46 billion, according to the Bloomberg Billionaires Index.
Written by Angelina Lasque
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