Sustainable Fashion Strategy Is The Focus Of Chanel Entry Into Sustainable Competition

Driven by social and economic benefits, the implementation of sustainable fashion strategy has become the focus of the development of luxury brands.

According to the fashion business news, with the increasing investment of LVMH and Kai Yun group in environmental protection and public welfare business, luxury brand CHANEL has announced that it has acquired a minority stake in Evolved by Nature of Boston green chemical company, but the details of the spanaction have not yet been disclosed.

Evolved by Nature mainly designs and develops products based on biomaterials for textiles and medical devices, such as liquid silk made from natural silk. CHANEL said in a statement that the cooperation enables the brand to explore various innovative fabrics and textile equipment, and is part of the group's investment in green technology strategy.

Last December, CHANEL announced that it would no longer use special animal fur in future products, including crocodile skin, lizard skin, snakeskin and skate skin. Bruno Pavlovsky, President of CHANEL fashion department, said it is becoming increasingly difficult to purchase fur that meets brand quality requirements and ethical standards. Therefore, the brand will focus on developing textile and leather materials in the future.

The sustainable development strategy of luxury and fashion brands covers the whole industrial chain, from raw material and fabric development, to sustainable packaging and commodity recycling. Whether it is high-tech companies that acquire and develop biological materials, or explore fur substitute fabrics, they are all different levels of sustainable development of CHANEL and other luxury brands.

There are indications that CHANEL is increasing the investment of sustainable fashion, which undoubtedly broke the two yuan competition pattern of LVMH and the two luxury group of open cloud. Some analysts believe that the competition between LVMH and Kai Yun group and CHANEL is rising from the contention of the original consumer market to the contention of social discourse, and this trend has become increasingly evident in the past year.

At last month's Copenhagen fashion summit Copenhagen Fashion Summit, more than 1300 guests from 42 countries including Nike, H&M group, PVH and Kai Yun group discussed the theme of revolutionary inclusive growth and innovative solutions to sustainable development, calling for strengthening cooperation and policy promotion in the industry and supporting the application of sustainable materials.

Kai Yun group takes the lead by virtue of its long-term sustainable development strategy. Group Chairman and CEO Fran C ois-Henri Pinault promised at the conference that since 2020, Kai Yun group has only recruited models over the age of 18 to participate in its fashion show or fashion blockbuster, and said, "as a global luxury group, opening the cloud knows the impact of the brand image on the outside world, especially for the younger generation. It is our responsibility to set an example for the entire luxury industry. We hope that more companies will be involved in such an action.

As early as 2013, Kai Yun group developed the environmental profit and loss statement (EP&L) to measure the impact of the brand on the environment in the process of production and sales, including social cost and economic cost. It was shown in the form of currency. In 2016, the "My EP&L" mobile terminal application program was developed. In 2017, the "2025 strategy" was launched to promote green strategy from three aspects: reducing environmental gains and losses, and strengthening overall cooperation and innovation in the industry.

In October of the same year, Gucci, the representative brand of Kai Yun, renounced the use of animal fur, including mink, hyenas, raccoons, foxes, rabbits and karat Kurt tailed sheep. Animal Welfare Standards, an open source project on Animal Protection announced last month by Kaiyun group, is the most comprehensive criterion for luxury and fashion industry so far, covering the entire supply chain.

Since 2017, Kai Yun group has been promoting the concept of sustainable fashion in China. In the fashion week of Shanghai, we held the "innovative luxury laboratory", launched the Chinese version of the environmental profit and loss account EP&L WeChat Mini program, established the Sustainable Development Award K Generation Award, and held the Forum on innovative materials in Shanghai in April this year.

LVMH, another magnate in the luxury industry, has not slackened its efforts in sustainable fashion. As early as more than 20 years ago, LVMH set up the Ministry of environmental protection, and took sustainable development as an important part of enterprise strategy. Last year, the LVMH internal fund said it supported 112 green projects, double the number of previous years. At the same time, the environmental protection KPI has been worked out, and the carbon dioxide emissions will be reduced by 25% by 2020.

Kai Yun and LVMH's two luxury goods groups have long been unable to agree on sustainable development strategies. Although the two sides drafted the labor relations and model health insurance statute together in 2017, the minimum age of the model was set to be 16 years old. However, after opening the cloud to announce that only 18 years old or more models were hired in 2020, LVMH did not share the same position with Kai Yun station. Instead, it showed that the 16 to 18 year old models really needed a safe working environment and atmosphere instead of losing their job opportunities. LVMH would not agree or follow suit and would stick to their position.

Although LVMH has invested a lot of energy in sustainable development, Kai Yun group has gained the upper hand. It has established a leading image of sustainable development in the public through marketing activities worldwide. In order to compete with the social voice of Kai Yun group, LVMH also needs a clear public image, and technology is becoming a key card for LVMH to suppress the cloud group. The latter played an important role in the Viva Technology summit in Copenhagen, France, at the same time as the fashion summit in Paris, attracting a lot of attention.

However, as sustainable development becomes the consensus of the industry, LVMH will not let go of sustainable development at all. Last month, LVMH announced that it had signed a strategic partnership agreement with the United Nations Educational, scientific and Cultural Organization (UNESCO) for five years to support the Intergovernmental science project Man and Biosphere (human and biosphere, or MAB). In addition, the LVMH group will also participate in MAB's research projects and provide designated infrastructure resources for the project to help establish animal protection area trials for long-term conservation of biodiversity.

LVMH and Kai Yun group, as leaders of the industry, are leading more brands to the strategy of sustainable development. In recent years, the luxury and fashion industry has long been questioned about environment and public welfare. Many brands are beginning to realize the importance of sustainable development in brand image strategy, and take corresponding measures successively.

Fur is the most critical and sensitive issue in sustainable development. At present, luxury brands are announcing their abandonment of fur in a way of exponential growth. The fashion and luxury brands that have joined the zero fur camp include Burberry, Armani, Versace, Gucci, CHANEL and so on. Last year, Burberry, who caused a great deal of destruction of the total value of 28 million 600 thousand pounds, also promised that it would no longer destroy its stock products and turn it into a sustainable way of handling inventory, such as recycling, reuse and donation.

Following the CHANEL, the newest luxury consortium joined the alliance is Prada. At the end of last month, the group announced that its brand will no longer use animal fur from the 2020 spring and summer women's wear series. PJ Smith, director of fashion policy at the Humane Association of the United States, believes that Prada's decision marks the shift of the head brand of the luxury goods industry from the original opposite side to the same line. Joh Vinding, chairman of the international zero fur alliance, also said that with the increasing number of luxury brands, consumer attitudes towards animal fur have also changed.

In 2015, the German fashion brand Hugo Boss joined the international anti fur alliance and began to comply with the fur ban of alliance one hundred percent from the autumn and winter series in 2016.

In 2015, Stella McCartney won the British Fashion Awards with a pure white #FurFreeFur series fur imitation coat.

In the spring of 2016, Giorgio Armani also began to abandon fur materials from the 2016/17 autumn and winter series.

In June 2017, Yoox Net-A-Porter, a luxury fashion business group, hopes to make further progress in the field of sustainable development and zero cruelty fashion, and promises that all products made from animal fur will be removed from its online store.

In October 2017, Gucci CEO Marco Bizzarri suddenly announced its accession to the international zero fur alliance.

In December 2017, VF group, the parent company of Vans, announced that it would no longer use fur.

In March 2018, Donatella Versace, the second generation head of the Versace, said that Versace had begun to take action instead of using animal fur. She thought that it should not create fashion by killing animals.

In March 2018, the San Francisco City Council recently passed the law prohibiting the fur trade to become the largest anti fur city in the United States.

In April 2018, John Galliano, the current creative director of Maison Margiela, announced that it would no longer use animal fur.

In May 2018, chief executive of Bottega Veneta said that future leather materials will no longer come from animals.

In June 2018, following the announcement that the fur would no longer be used, Gucci would stop using Angola rabbit hair.

In September 2018, Burberry CEO Marco Gobbetti announced that the brand would no longer burn backlog stocks and no longer use animal fur such as rabbit hair, fox hair, mink and raccoon skin.

In September 2018, the British Fashion Association decided to stop using animal fur in London Fashion week.

In September 2018, Losangeles will ban fur sales in 2020.

In September 2018, PETA invested in Farfetch to urge more luxury brands to stop using animal fur.

In October 2018, Diane von Furstenberg decided to stop using animal fur.

In October 2018, Coach joined the international zero fur alliance and announced that it would no longer use animal fur.

In October 2018, Jean Paul Gaultier said that he was considering giving up the use of fur.

In December 2018, CHANEL will not use any rare animal fur such as crocodile skin.

In February 2019, 3.1 Phillip Lim announced that it would no longer use animal fur.

In May 2019, Kai Yun group issued animal welfare guidelines.

In May 2019, Prada announced that it would no longer use animal fur from the spring and summer series in 2020.

So far, only five of the top luxury brands are Hermes and LVMH Louis Vuitton. However, for LVMH, although its brand has not yet joined the wave of zero fur on a large scale, it has begun to strictly control the source of rare animal skins. In 2011, it bought the Hang Lung Group, one of the largest crocodile leather manufactory in the world, and tried to ensure compliance with the ethical standards from production to sales.

The environmental declaration of CHANEL and other brands is undoubtedly a blow to Hermes. When 90% of the top luxury brands announced that they had stopped using animal fur, they still insisted on using rare animal skins as raw materials to earn high profits.

Only five of the top luxury brands are Hermes and LVMH Louis Vuitton, which has not been formally declared, especially Hermes.

At the annual general meeting held last week, investors once again questioned the moral character of the brand of crocodile skin. Hermes CEO Axel Dumas had to respond to the fact that the brand's suppliers and farms had more strict guidelines for crocodiles than local regulations, so every farm could respect the health of animals. The brand would supervise the suppliers and farms in person every month, "this is part of the Hermes culture." He does not think that the use of animal fur is a brand of Hermes, but a public health problem.

This is also about the future competition of young consumers. On the issue of sustainable development, consumer psychology is clearly developing in an irreversible direction. According to McKinsey's millennial survey, 66% of the millennials are willing to pay higher prices for environmentally friendly products, and 42% of the millennials hope that the production process can be spanparent. This shows that sustainable development strategy not only brings social benefits to the brand, but also brings economic benefits that can not be underestimated.

The seesaw battle of the head luxury brand is rising from the consumer market to the influence of social discourse power. With the improvement of consumers' awareness of environmental protection and public welfare, sustainable development is of great help to brand competition for social discourse power. This CHANEL's attempt at sustainable development strategy has continued to spread the flames of war without smoke.

For a long time, LVMH, Kai Yun and CHANEL, as the three giants of the luxury goods industry, are becoming increasingly fierce in the consumer market.

Sales data of CHANEL, LVMH's Louis Vuitton and Kai Yun group's Gucci are also getting closer. According to CHANEL's first public earnings report in 108 years, its annual sales in 2017 reached $9 billion 620 million, operating profit of $2 billion 690 million, and net profit of $1 billion 800 million. It is reported that CHANEL will continue its public performance report this year, and Bruno Pavlovsky revealed that 2018 was another year when its performance exceeded expectations.

In 2017, Hermes surpassed herm's Gucci first entered the 8 billion euro club for the first time a new record, and the brand's sales record was 10 billion euros last year according to the Louis Vuitton, the core brand first disclosed by LVMH boss Bernard Arnault, a difference of 2 billion European yuan from Gucci.

Previously, there was a news that CHANEL would be bought by LVMH. In response, Jean-Jacques chief of LVMH, chief financial officer, responded this week that the valuation of the current business scale of CHANEL has approached 100 billion euros, which is a great challenge for any buyer. Although Jean-Jacques Guion later denied its share of CHANEL's market value, it clearly led the industry to have a further understanding of the current market structure.

According to fashion business today, the market value of LVMH is 180 billion euros, the market value of Kai Yun group is 61 billion 300 million euros, and the market value of Hermes is 64 billion 300 million euros, which means that CHANEL has become the second largest luxury group after LVMH.

CHANEL, LVMH and Kai Yun group maintain a relatively stable position, but competition is becoming increasingly sticky. Even though the sustainable development strategy of Kai Yun group seems to have been in front of LVMH and CHANEL, Gucci was once caught in the racial discrimination crisis due to black sweater and scarf products this year. The aftershocks of the negative impact on brand and Kai Yun group remain.

CHANEL, as the latecomer of sustainable fashion, is facing enormous competitive pressure. After announcing the use of rare skins and fur, and investing in green chemical company Evolved by Nature, CHANEL seems to be relatively slow and prudent in its strategy of sustainable development to conform to market trends, but has not yet shown enough ambition.

The more unstable the industry is, the more eager it is to seize the future. At present, sustainable development is recognized as an important driving force for future development. Luxury brands gradually realize that the meaning of luxury has changed. Once, craft, fabric and design were considered as necessary conditions for luxury goods. Nowadays, expensive and rare materials are not necessarily luxury goods recognized by young consumers, but emotional value and moral value are the only ones. It is possible to achieve new growth if we push the border and do things that are not easy to do and break the traditional thinking of the industry.

In the final analysis, all these are the struggle for the future dominance of the luxury battlefield in 3 to 5 years.