00:00We have calculated the dividend payouts for the owners of Chanel since 2017.
00:07And that windfall comes up to about $21 billion.
00:12So it's very important. It's quite massive.
00:14And that $21 billion windfall feeds into the family vehicle, which is called Moose.
00:20And they've invested in different businesses, including notably, for instance, in the U.S., the fashion brand, The Row.
00:28Oh, interesting. The Row. It is a nice fashion brand.
00:30A little out of my bracket most of the time, but we can aspire.
00:34But why does this matter? Because Chanel has had a bit of a rough go.
00:38I know for a while they really didn't even have an in-house designer.
00:41The house of Chanel was making the collections kind of in collaboration.
00:44Talk to us about why this is an odd time to be taking out that much money and to pay
00:49yourself that big of a dividend.
00:512025 was a better year for Chanel.
00:54They returned to growth after a drop in sales in 2024.
01:01Basically, Chanel also suffered the slowdown and then the downturn in demand for luxury goods.
01:07You know, after the post-pandemic, there was a boom in luxury goods.
01:11People wanted to go out.
01:12They wanted to look good.
01:13And Chanel enjoyed this.
01:15However, there was probably in the last two years, there was probably a lack of interest from consumers for Chanel
01:23goods because they probably didn't innovate enough.
01:27They didn't create products that inspired a lot of desirability.
01:32When you talk about the luxury houses in general, to your point, they have had a slowdown.
01:39Part of it is because there was just such that extraordinary growth.
01:43And you even have the CEO of Yves Saint Laurent this week saying exactly that, that the growth was extraordinary
01:48but not sustainable.
01:49And brands need to work harder at retaining aspirational clients and, to your point, making products that people really want.
01:56You know, it strikes me there was this bit of a scandal where it turned out some of the bags
02:00were being made very cheaply and the markup was very high.
02:03There's been a lot of complaints about the quality of these products and what they're charging them for.
02:07Or is this kind of a turning point for these houses that they need to get back to basics if
02:11they want to save their business model as it is?
02:16Absolutely.
02:17I think there was a point where brands in the post-pandemic, they got complacent.
02:21They probably thought that the sky was the limit.
02:24They could increase prices and not see a repercussion or backlash from consumers.
02:30And actually, that is what happened at some point when, for instance, in the case of Chanel,
02:35a classic flap bag about two years ago in Paris, it went above the symbolic 10,000 euro level.
02:44And so that obviously makes people think twice.
02:48And, you know, it's basically the same product, but I can see that the prices are just going up and
02:54up.
02:54And analysts, they call this greedflation.
02:57And some brands were accused of increasing prices too much compared to other ones.
03:03And in this category, I think, you know, people agree to say that Chanel was probably one of them, maybe
03:08Dior as well, and others.
03:10And in order to gain, again, the attention from consumers, there was, in the past two years, there was a
03:18big creative reshuffle among the top fashion brands,
03:21whether that's Christian Dior with Jonathan Anderson, of course, Chanel with Mathieu Blaisier.
03:26And he used to be at Bottega, right?
03:28Gucci, Demna.
03:30Sorry?
03:30Sorry, I used to be at Bottega.
03:32He came from Bottega, Veneta.
03:35Yeah, yeah, absolutely.
03:36But also Celine and other ones.
03:39So basically, you need to show that you need to increase the value perception of your products.
03:45And I think that's what the brands would agree on.
03:50One way to get excitement and get new consumers potentially is these drops we're seeing,
03:55these collaborations between higher-end brands and slightly more affordable brands.
03:58And I wanted to talk to you about this Swatch collab with this very high-end watch brand that I'm
04:04going to let you say,
04:04because I'm going to mess it up, and I know all the watch nerds are going to come for me,
04:07including my brother.
04:08But they had these pop Swatches that literally caused stampedes and frenzies and stores to have to shut because they
04:15couldn't deal with this.
04:16What was this, and why was it such a big deal, and do you expect to see more of these?
04:20Absolutely.
04:20So it was a collaboration between Swatch, you know, Mass Watches, you know, a big, you know, democratic watch brand.
04:28And then Audemars Piguet, and this is probably the top of the pyramid with Rolex and Patek Philippe.
04:35Audemars Piguet, just to give you a sense, they produce about 50,000 watches a year versus Swatch, the brand.
04:42They produce 4.4 million watches a year.
04:47So you've got a mass brand and then a very exclusive brand.
04:50It generated mayhem in the run-up.
04:53People were camping outside the stores for a couple of days ahead of the sale, which was on Saturday, the
04:5916th of May.
05:00And that was across all over the world.
05:02And it was in Swatch, you know, stores.
05:05It was in physical stores.
05:07It wasn't an online, you couldn't buy them online.
05:10And the thing is, as you say, we saw scenes of mayhem, of chaos, sometimes people being, sometimes pepper spray
05:17because, because they didn't really.
05:20Some of the fights, yeah, they refused to open.
05:21Some of the stores didn't even open because they said, we're not engaging in this.
05:25We're not opening today.
05:25Go home.
05:26I think there was a disappointment in the execution.
05:29In the concept, I think it's up for debate.
05:31It's probably going to be very positive for Swatch.
05:34Swatch, you know, they're suffering because they are, you know, it's a mass brand and the value right now is
05:42in the top of the pyramid, so in the exclusive brand.
05:47And for Audemars Piguet, Elida Ressa, the CEO of Audemars Piguet, she said it's probably going to generate interest again
05:54in mechanical watches, which, you know, volumes of mechanical watches have also been falling over the past few years.
06:01So that is probably also the positive for Audemars Piguet.
06:05But some people will say, actually, Audemars Piguet doesn't need that because it's super exclusive.
06:09Okay.
06:10So we'll have to see in the numbers of Swatch.
06:12And we'll have to see how many people who buy those watches can actually read them because apparently this is
06:15a thing.
06:16People can't read analog watches anymore.
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