Despite Chanel’s vast portfolio of luxury goods, it’s the brand’s investment in the cosmetics sector that is coming up trumps, currently accounting for 55% of its annual revenue.
Although the luxury brand is widely recognised for its fashion line, Chanel’s investment in the skin care category has seen it rake in $2 billion a year from its cosmetics arm alone, according to Financial Review analyst, Elisabeth King.
The Chanel No. 5 perfume is currently one of the best-selling fragrances out there, but it is the brand's perseverance to crack the skin segment since the 80s, King says, that has seen it succeed where other designer brands have stumbled.
By choosing to invest in its own research laboratories, the luxury house has been able to be as innovative as it wants with the likes of its' 'Precision' brand, which went on to become the world’s eighth best-selling premium skin care collection.
“The real tipping point arrived in the mid-’90s when Chanel announced its long-term aim to clinch a place among the world’s top 10 prestige skincare brands. The company launched CERIES (Epidermal and Sensory Research and Investigation Centre), an autonomous centre devoted to researching the physiology and biology of the skin,” King reports.
Other game changing products launched by the brand include; 'Hydramax Plus', which concentrates on boosting skin hydration and 'Ultra Correction Restructuring Lift Complex', which targets the mid-face area that sags with age.
"Within five years, more than one-third of Chanel’s global beauty advertising budget involved skin care," King informs.
Hoping to continue its run of success in this area, the cosmetic giant is now concentrating on partnerships that will allow it to develop purer skin care lines.
Its' research and technology department recently teamed up with French plant biology specialist 'Plant Advanced Technologies' (PAT) to develop a line of pure active ingredients.
As a result of the joint venture, Chanel is set to launch its first regenerating anti-aging skin care product this year featuring an active ingredient developed by the biology specialist’s latest technology.
Over the last five years, Chanel teams have been working with PAT engineers to provide an extraction and culture from Edulis molecules. Three other projects associated with other extracts plants are also said to be in development.