Is Dior Catching Up to Chanel?
In 2018, Dior entered the realm of mega brands, becoming luxury’s sixth player to attain sales in excess of 5 billion euros, joining the ranks of Louis Vuitton, Chanel, Gucci, Cartier and Hermès. According to a new Morgan Stanley research report, fast-growing Dior has become an appreciable earnings driver for parent LVMH Moët Hennessy Louis Vuitton, though it still trails Chanel in terms of profitability. However, “we see no structural reason for Dior’s profit contribution not to get close to that of Chanel’s today (currently 3x higher).” Analyst Edouard Aubin decided to compare the financial performance of Dior and Chanel, which recently began publishing its accounts as part of the move of its financial headquarters to London. Both brands have outpaced the industry by posting double-digit top-line growth in recent years — and not by increasing third-party distribution, according to his calculations. “Rather it was done by building up desirability via massive communication spend (frequency and magnitude of shows, sponsoring of exhibitions, etc.) and product creativity,” he wrote in a report Thursday, noting that Chanel still does not sell any fashions or leather goods online. Dubbing Dior a ” real standout in the industry,” Morgan Stanley expects its total sales to grow 18.7 percent in 2019Follow WWD on Twitter or become a fan on Facebook.
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