Chanel's $700 Million Mystery: What is the Real Reason Behind Their Secret Funding?

Brings in mind the phrase " I came not to praise Caesar but to bury him"... Brutus😎

Who on earth would invest a billion dollars in an overpriced luxury brand when the economic shit is about to hit the fan? By the time the controllers are done, people aren’t going to be able to afford the basics. No one is going to be clamoring to buy $8,000 handbags. I don’t know if you guys have noticed but food costs and property values have doubled in like 3 yrs. That inflation trajectory is not sustainable and it’s going to get ugly.

Weird situation: capital can not be counted as revenue or profit so they can not use this to fake their yearly sales or profit numbers. But CHANEL is a very profitable company and I can not imagine cash flow is a problem in this company so why they need €700 million fresh capital is weird. Or they must plan on a huge investment that needs funding.

SD, u r cracking my a** up how you’re pronouncing GOOGLE 😂. I’m doing dishes and have to run to the screen to watch u say it lol. U r the best!

Rewatching… strange situation here. Big growth due to price increased. And profitable too. They got what they want!

My view is that Chanel is not yet ready to go public (or at least wants to hold on to being a private company for as long as they could) hence the private placement. The good side is that they can only offer it to selected investors by invitation so there is a way for them to vet who invests in and gets a stake in the company. That may be one of their ways to keep the majority stakeholders as they are and not dilute this. Plus it’s true that private placements are leas cumbersome and have less requirements than IPOs which could take ages to complete and require stringent disclosures the moment a company goes public.

Companies raise capital for many different reasons (eg. for expansion, debt reduction, other investments etc). A private placement doesn’t directly increase profits…that will depend on how effectively the raised funds are utilized. If they are issuing bonds (instead of selling shares) that would increase Chanel’s debt obligations.

And if these investors don't see a return on their investments, does that mean they'll sell them on to a higher business

Hey Dacob. Again I need to say Im not surprised. I was working for them for few years. Seems like last few good years but I have seen what was going on on let say low level of busines. It looked like they were cutting costs wherever they could. I worked in Fragrance and Cosmetics. So from cutting allocation for staff, reducing training to quality of products (see nail polishes) and so on. That behaviour was more suited to company ith finantial problems

My personal thinking: we know the investors? If not…. My idea is that they have to pump money into CC with an other company which are also owned by the W. Family….. And maybe that is the better solution like to pump it inside form private…. Anyway sounds not so good….

Love the news style reporting! Perfect!

Overpriced French stuff. I don’t want to pay extra to be condescended to. There used to be an allure to many luxury brands, still is for Hermes for the time being, but the gold is beginning to rub off. The big difference IN STYLE between fast fashion, every day clothes and expensive luxury goods is closing. Why pay a $1000 for sweatpants??? Why buy a silk blouse if no one wears that style anymore. Much office wear is wash and wear. Why buy something dry clean? - your getting extra work for a style that is passé. Style is converging between the upper, middle and lower classes. More brands are going to look like the Row or a fast fashion brand. I think we are on the cusp of completely new production methods coming into effect. The overproduction, completely handmade, sweatshop or atelier, will be a thing of the past. AI design, personalized sizing, machine made from raw materials to cutting to the finishing hem and embellishments is not only cost effective for the producer but I will finally, as a petite, be able to buy a pair of pants. 😂

Weren't they bidding up on a building in NYC's 5th avenue, bidding up against LVMH. It is possible they needed the urgent funding for the bidding to proceed? I wonder if LVMH has also taken up a loan recently 🤔 or is possible that Chanel did win the bid, and now they must proceed with the partial payment, and probable own cash for the rest.

I don’t think they are selling, like to who rn? LVMH is not doing too hot either, i think they want extra money they know they can pay back too expand or something, u just never know with chanel😂 but hopefully it goes into their much needed infrastructure

A private placement does not show out as profits.

This is part of a trend in finance, private equity has grown so much. The internet claims that a competing stock exchange is planned to be created in Texas. This way, the companies that participate in the TX stock exchange, won't have to follow New York State requirements, such as proving the diversity of management.

Dacob, in my opinion we fashion suckers already have our banker fuel of thinks that have meaning and cultural value, so we are not getting fooled by this mirage of relevance, that the “business”people are trying to emulate, just using the name of the brand to creating hype and FOMO. We know what’s going on. Hope that they pay the price of their greed, not us. Hope they stop thinking that they can fool us poor, and start to make fashion and luxury again.

Mysteries abound.

You do realize MANY businesses operate in this manner. Not sure what the issue is here…

Sign of the times, Dacob. Sign of the times. Production is going up. Inflation is global. Rich people aren't buying Channel. They are buying non label, Like the queen. They have cut off the middle class rise. Everyone uses credit cards. Unfortunately, money can't buy class. Channel is passe in 2024. What are they designing? Look at the shows. Go to the shops. Look at what they have. A bunch of cheap looking logo crap. Plus the bags. Is luxury going out?