Reinforcing its upscaling drive, Chloé is to phase out its See by Chloé business over the next three years, WWD has learned.
Established in 2001 amid a brand segmentation craze, See by Chloé at its peak represented about 10 percent of the total business, and the Compagnie Financière Richemont-owned brand expects the move to dent its topline growth in the short term.
But it is emboldened by the strong commercial traction of its new purpose-driven business model and the design direction of Gabriela Hearst, who last month unveiled her third collection for Chloé to largely positive acclaim.
Disclosing the development exclusively to WWD, Chloé chief executive officer Riccardo Bellini characterized the phaseout as a “natural and necessary evolution for the long term” as the fashion house continues to elevate its image, product lines — and soon its customer experience via a new boutique concept.
Chloé employees were informed of the gradual shutdown on Thursday, as well as See by Chloé’s suppliers and business partners. There are 19 freestanding See by Chloé stores in Japan, but the business is roughly 65 percent wholesale, concentrated in Europe and the United States.
In an interview, Bellini described strong business momentum for its main designer collection that should rapidly compensate for the loss of the See by Chloé volume, while putting the brand in a stronger position for long-term growth in the burgeoning luxury sector.
“We see this as a natural and necessary step in order to continue the renovation of our first line, and to reaffirm a one-line, single-brand umbrella approach as our strategy going forward, with consistent positioning across all of our expressions,” he explained.
While not giving any figures — Richemont does not break down financial results by brand — Bellini said Chloé revenues in 2021 were “up significantly versus pre-COVID[-19] times,” fueled by double-digit growth in ready-to-wear and handbags, triple-digit gains in footwear, and robust full-price selling.
Parent of Cartier, Van Cleef & Arpels and a fleet of top Swiss watchmakers, Richemont groups its fashion and accessories houses Alaïa, AZ Factory, Chloé, Delvaux, Dunhill, Montblanc, Peter Millar, Purdey and Serapian under “other business.” In the fiscal third quarter ended Dec. 31, revenues in this division gained 40 percent to 610 million euros, representing 17 percent growth on the third quarter of 2019.
In the interview at his Paris office, Bellini trumpeted strong progress with Chloé direct-to-consumer sales, which now account for 60 percent of the total business, versus 40 percent for wholesale. The ratio was the opposite pre-pandemic, and the long-term goal is to get to 75 percent directly controlled revenues.
He also noted that Chloé’s digital penetration doubled during the pandemic, now accounting for about 25 percent of all brand sales.
Hearst’s take on the brand’s spirit and legacy, combined with her firm eco convictions and practices, seems to be gaining traction.
“Gabriela has been amazing in sharpening the image and creative offer of the brand, elevating the quality and the craft, and injecting a sense of integrity and values,” Bellini explained. “I call it product with a soul.”
He cited a “very positive dynamic” in terms of new client acquisition, noting that most of them are initially after rtw, returning to the store more frequently and spending more per visit. Chloé devotees of yore are also returning, he noted.
Licensed products, notably eyewear and fragrance, are making progress, Bellini said, citing double-digit momentum with fragrances, including classic scents and its more upscale l’Atelier des Fleurs Chloé line.
Since joining Chloé in late 2019 from Maison Margiela, Bellini has been retooling the brand’s business model to one that is purpose-driven, community-based and accountable for its environmental and social impact, in addition to being highly creative.
Over the past year, Bellini quietly renewed creative teams across multiple categories. Key hires included Giovanni Morelli, a seasoned handbag designer who most recently worked at Valentino, but was part of Phoebe Philo’s team at Chloé when it plunged into the leather goods business and turned out the Paddington and Silverado, the brand’s first “It” bags. Morelli has also designed leather goods for Loewe and Marc Jacobs.
Leather goods account for roughly half of the Chloé business, with rtw representing 30 percent and shoes 20 percent, Bellini noted.
The executive hinted that Hearst would in the future unfurl many new creative expressions for the Chloé brand, marking its 70th anniversary this year. One will be a new retail concept that should be unveiled this year and that will represent an “overall upgrade” in line with the brand’s convictions about low environmental impact and social good.
Chloé boasts about 120 stores worldwide, and it plans to add about eight locations this year, Bellini noted.
Billed as a more casual and less expensive expression of the Chloé brand, See by Chloé was introduced under then-creative director Stella McCartney and once touted as a business that could eclipse the main line.
But as the market became more polarized, in recent years many of Europe’s big designer houses walked away from — or are in the process of winding down — their younger secondary brands and diffusion lines, including Valentino, Dolce & Gabbana, Victoria Beckham and Missoni.