Luxury French fashion houses Hermes and Chanel enjoying a sales boom in Australia
Australians are pulling back on takeaway coffees, but well-heeled shoppers are still spending on luxury items, helping French fashion houses Hermes and Chanel post record sales.
Business
Don't miss out on the headlines from Business. Followed categories will be added to My News.
The worst cost-of-living crisis in decades is forcing many Australians to pull back on takeaway coffees, dining out and holidays, but for the well-heeled it’s always the right time to pick up a $60,000 Hermes Birkin handbag or a generously sized Chanel No. 5 perfume.
Last year, at a time when the Reserve Bank hiked interest rates five times, inflation was stubbornly above 4 per cent and food and grocery prices recorded almost 10 per cent inflation, more than $1bn was spent on luxury fashion, apparel and jewellery embossed with famous branding.
The financial results for two of the world’s leading fashion houses, Hermes and Chanel, reveal a booming business in Australia that is reaping record sales.
The Australian arm of luxury French fashion house Hermes, known for its Birkin bags that start at about $12,000 and which can sell for well over $100,000, saw its sales leap almost $90m in a single year, or 23 per cent, to $477.13m for calendar 2023.
This is despite Hermes having only six stores in Australia.
While a takeaway coffee is transitory, a Birkin bag is forever and for those households flush with disposable income it is never a bad time to visit a Hermes store.
Across the road at Chanel, the epitome of style, sophistication and luxury, sales also rose despite cost-of-living pressures.
The fragrance and fashion house most famous for its Chanel No. 5 perfume recorded sales of $598.5m in 2023, up 4.8 per cent.
Total sales in Australia for the 114-year-old brand founded by French designer Coco Chanel have jumped almost 25 per cent in the past two years.
The latest accounts lodged with corporate regulator the Australian Securities & Investments Commission show Hermes Australia, whose boss of more than 22 years is Karin Upton Baker, lifted its profit to $108.8m from $87.74m in 2022 – a rise of 24 per cent.
At Chanel Australia, although its profits in 2023 were down 41 per cent to $50.14m, profit in 2022 jumped 32 per cent, and over the past two years it has paid almost $80m in dividends to its overseas Chanel parent.
The luxury retail market is showing remarkable growth and resilience worldwide, despite cost-of-living pressures keeping many shoppers fixed on bargains, with a recent report from Bain & Co tipping the luxury industry to reach global sales of $2.5 trillion in 2023, growth of about 10 per cent on 2022.
The Bain report singled out Australia as being a “fertile ground for growth” for luxury brands
Melbourne’s Chadstone shopping centre, the nation’s largest and a leading purveyor of luxury brands, having more than 40 international fashion houses under its roof including Hermes and Chanel, is witnessing first-hand the buoyant trade in luxury retail.
“We have over 40 international luxury brands under one roof and this offering is a major drawcard for local and international shoppers alike,” said Chadstone centre manager Daniel Boyle.
“Luxury shopping is alive and well at Chadstone; no matter the time or day of the week, you will often see queues at the luxury boutiques.
“We find the luxury shopper will make an occasion of the visit, taking advantage of the 1:1 service and elevated in-store experience provided by these prestigious international brands.”
Mr Boyle said the luxury category remained a key focus of its leasing strategy at Chadstone.
Recently, the shopping centre opened a new flagship store for jewellery retailer Michael Hill, which had a heavier focus on premium and luxury items than its other stores and included a $1m pair of diamond earings.
Last year, Vicinity Centres, the owner of Chadstone, noted that the Covid-19 pandemic had demonstrated Australia was home to a large customer base for luxury.
More Coverage
Originally published as Luxury French fashion houses Hermes and Chanel enjoying a sales boom in Australia
Westpac banks on new CEO to take over from King
Wealth and business banking boss Anthony Miller will continue Westpac’s technology and risk transition plans when he takes over the top job from Peter King in December.
Solomon Lew sacks Smiggle boss, citing misconduct
Billionaire Solomon Lew’s retail conglomerate Premier Investments has sacked its longtime boss of its kids stationery brand Smiggle, citing misconduct, as the group also reports slowing sales and earnings.