Chanel snaps up four companies to secure high-end silk supplies

Fri Jul 22, 2016 2:27pm EDT
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By Astrid Wendlandt

PARIS (Reuters) - French luxury goods maker Chanel has created a silks production unit by investing in high-end specialists, it said on Friday after completing the third deal in four months aimed at strengthening its supply chain.

Chanel said the four companies, in the Loire region, were long-standing suppliers involved in every step of silk production from yarn making to weaving and printing.

"Through these investments, Chanel is reaffirming its commitment to the long-term sustainability of a high-quality segment and to ensuring the longevity of the silk weaving industry in France," Bruno Pavlovsky, President of Chanel Fashion said a in a statement.

Chanel plans major investment in the four companies to boost their production capacity and modernize their manufacturing tools, Pavlovsky added.

Three of them carry the government-sponsored label Entreprise du Patrimoine Vivant, reserved for companies delivering traditional, high-end artisan work.

In recent years, every major luxury group including Hermes, Kering, Richemont and LVMH has been snapping up suppliers, from tanneries to flower growers, securing access to high quality raw materials in competition that grows more fierce every year.

Many acquisitions have involved small suppliers struggling to cover high production costs with artisan production volumes.

Relentless vertical integration has made life difficult for smaller labels such as shoe maker Pierre Hardy and Lanvin, France's oldest fashion brand, which have to fight to access key suppliers.   Continued...

Perfume Coco Mademoiselle of French luxury brand Chanel on display at the duty free during the inauguration of the commercial zone at the Nice international airport Terminal 1 in Nice, France, June 10, 2016.  REUTERS/Eric Gaillard