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The luxury fashion house’s net income is reported to have dropped 35% in 2016, year-on-year.
Controlled by Netherlands based Chanel International BV and not publicly traded, the 2016 annual report has been filed at the Commerce Registry in Amsterdam on August 16. If no detailed results are disclosed, French newspaper Le Monde and Swiss business magazine Bilan are said to have accessed the 91-page long document which shows a drop in net income of almost 35% in 2016.
Reportedly, auditors Deloitte say in the document that “on an equivalent benchmark, at constant exchange rates, the results are stable compared to 2015”. Despite the second half of 2016 showing improvements, the terrorist attacks in Europe are said to have affected the luxury brand’s sales, resulting in a drop in net income of 35% to US$ 874 million. Operating income is said to have dipped 20% to US$1.28 billion, resulting in a 22.5% decline in profitability, compared with 25.7% a year earlier. Net profitability fell to 15.4% (21.5% in 2015).
The lower performance has also been partly attributed to the sale of the subsidiary, Chanel UK which allegedly represented about 11% of the Group’s total sales, to another entity also controlled by the holding.
If Chanel’s results show a decline, the company’s dividends, however, are reported to have increased. Owners Wertheimer brothers are said to have granted themselves US$3.41 billion compared with US$1.64 billion in 2015 (+108%), resulting in the company's available cash declining from US$1.3 billion to US$980 million.
Sources: Le Monde/Bilancomments powered by Disqus