Chanel Inc. is cutting 70 roles in the US as the luxury fashion and beauty label warned it faces a more difficult economic environment.
The decision to reduce headcount follows previous moves to limit spending and will help Chanel âbetter adapt to the current economic challenges,â it said in a statement Wednesday. The 70 jobs represent about 2.5 percent of its US workforce.
The online publication Puck News first reported the cuts this week.
Chanel is generally considered one of the most exclusive and resilient labels since it caters to the wealthiest customers who are able to spend more than â¬10,000 ($10,420) on a handbag. But the job cuts come after a wider downturn in demand for high-end goods since a post-pandemic boom.
âWe expect ebbs and flows in demand in any market,â Chanel said, adding that the US is still an important part of the companyâs long-term strategy.
The Americas represented about 20 percent of total sales at Chanel in 2023, compared to 28 percent for Europe and 52 percent for Asia Pacific.
The company had about 36,500 employees in 2023, according to its annual results presented last May. Chanel reports earnings once a year.
Last week, Richemont reported sales for the last quarter that beat estimates amid a strong performance at its Cartier jewelry brand. That triggered hopes that the worst may be over for the downturn in demand for high-end products.
LVMH Moët Hennessy Louis Vuitton SE will report earnings on Jan. 28.
Consulting firm Bain predicted in November the personal luxury goods industry was set to be flat last year but could gain as much as 4 percent this year.
Chanel is owned by Alain and Gerard Wertheimer, whose fortunes are estimated at about $46 billion each, according to the Bloomberg Billionaires Index.
By Angelina Rascouet
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