While competitors like Kering buy up shares in resale platforms, Chanel is doubling down on its legal battle with The RealReal. The dispute between the luxury secondhand market and the well-known fashion house is complicated, but it is not entirely surprising. Chanel has been an outlier amongst luxury fashion players, sticking to its old habits instead of embracing change. Could that hurt the brand's progress on sustainability?
Let’s start with the difference in approach to resale.
Luxury fashion was hesitant about the growing secondhand market at first. Companies like The RealReal, ThredUp, and Rebag can take away sales, and no brand wants to lose potential customers, especially to a platform they have no control over. That is the other issue. Luxury consignment stores advertise that everything they sell is authentically real, no fakes allowed. However, that has proven not to be entirely true — this is what part of the dispute with Chanel is about. Despite these concerns, resale continues to grow, even without brands' support. To remedy at least part of the problem, brands and their corporate owners are buying into secondhand platforms and creating new partnerships to have some control over how their brand is presented and what is sold. Hence the recent stake that Kering — the owner of Gucci, Alexander McQueen, Balenciaga, and more — took in Vestiaire Collective — a secondhand selling site that just raised $216 million in funding. While Kering's news broke, the Chanel and The RealReal fighting — which has been going on since November 2018 — got more intense and confusing. And it's not just resale; Chanel has consistently fought what other brands are embracing.
Forget fewer digital fashion shows; Chanel will stick to its six in-person events per year.
Early on in the pandemic, when in-person events were first canceled, a group of fashion designers, executives, and retailers banded together to create Rewiring Fashion. An organization facilitated by the media site The Business of Fashion, it was supposed to encourage a reset of the fashion calendar and a reimagining of fashion shows. A petition put forth by Rewiring Fashion currently has 2,184 signatures from CEOs, founders, head designers, and other top-level people at some of the biggest fashion brands. That includes signories from Kering and Louis Vuitton, but not from Chanel. In fact, less than a month after Rewiring Fashion was launched, Chanel declared it would keep releasing and showing six collections per year, a few more than the two collections suggested by Rewiring. When interviewed by The Business of Fashion, Bruno Pavlovsky, Chanel's president of fashion activities, defended the "creative freedom" provided by each show, even if the travel to and from them is responsible for increasing the brand's carbon impact. Chanel's stance seems to be that since they can afford to keep going with the status quo, why change things?
Fighting the changing of the fashion industry will make the brand less sustainable, both profitably and environmentally.
Like practically every other brand, Chanel has invested some money in environmental initiatives. A recent example is the $35 million the brand has committed to solar power improvements in California, which will benefit low-income families, acting as a source of carbon offsetting for Chanel in the process. Of course, that $35 million can only have so much impact, especially when any environmental good is being negated by Chanel's continuation of in-person shows and new clothing production, both of which are responsible for significant greenhouse gas emissions. The luxury brand can put up small investments, but it will never be sustainable without changing its operations. The only hope is that over time, Chanel comes around to resale, fewer digital fashion shows, and other industry changes that will result in a cleaner planet, healthier people, and more economically sustainable businesses.
The Bottom Line:
The years-long fight against resale is just one example of Chanel resisting change that other brands are embracing. If this refusal to adjust brand operations with the times continues, Chanel may soon find itself more unsustainable than its competitors.
Chanel is suing The RealReal for allegedly selling counterfeit bags (The Fashion Law)
Rewiring Fashion (Rewiring Fashion/The Business of Fashion)
Why Chanel doesn’t want to change the fashion system (The Business of Fashion)