Chanel announced they will cut 200 jobs, or 10% of its work force, on New Year’s Eve day this year. The layoffs will affect all staff on fixed and temporary term contracts.
Many predicted that luxury brands would remain immune in the face of a recession, but it appears that this market is quite vulnerable as retailers and high fashion brands struggle to cope with tightened purse strings and falling sales figures.
Many leading labels are offering discounts and stalling new store openings while they attempt to renegotiate development and marketing plans and project realistic sales targets for the coming year.
The job losses, described by some commentators as the label’s worst crisis since founder Coco Chanel fired all her staff at the outbreak of war in 1939, represent almost 10% of the company’s production workforce. The redundancies come after a difficult year for the fashion, perfume, cosmetics and accessories businesses where growth has almost ground to a halt.
The announcement of Chanel’s job cuts came shortly after the French label announced that their Mobile Art Exhibit, a travelling show that featured artwork inspired by Chanel’s quilted handbags, would not be continuing its world tour. The pavilion was designed by architect Zaha Hadid and was due to visit London, Moscow and Paris after the New York installation, but the project was halted so Chanel could “refocus” their strategic investments.
