In a dramatic shift for the company, Chanel Inc., the U.S. subsidiary of Chanel Ltd., is transforming its wholesale business into a concession model.
The company plans to operate concession departments in its major accounts, which include Neiman Marcus, Bergdorf Goodman, Saks Fifth Avenue, Nordstrom and Bloomingdale’s. The process began last year with Bloomingdale’s 59th Street location, and this year several others were converted, namely Saks in Greenwich, Conn., and Atlanta and Neiman Marcus in Atlanta. The rest will be phased in over the next year.
“You might be wondering why, after 12 years of relative silence, am I doing a real interview,” said John Galantic, president and chief operating officer of Chanel Inc. “It’s a time of pretty major change here. The old saying is ‘don’t waste a crisis. But I look at it the other way more, which is when the business is very strong and the demand very desirable, there’s much more leverage and leeway to make change.
Luxury players such as Louis Vuitton, Dior, Gucci and Prada frequently operate concession models in department and specialty stores; handbag departments in the U.S. American department stores are among the few worldwide that continue to operate primarily on a wholesale model; most department stores in Europe and Asia rely primarily on concessions, particularly for luxury brands.