March 16, 2019
The world was in shock when the house of Chanel announced the passing of Karl Lagerfeld.
An icon in the fashion realm, many mourned his death. Millions flocked to social media to pay tribute, including Penelope Cruz and Rihanna. He was celebrated for numerous things – for being a fashion genius, a true visionary or, as Cara Delevingne placed it, “a dear friend”. Of course, some made controversial statements in the wake of his death, but that’s another article for another day.
For now, here’s how Karl Lagerfeld revolutionised the industry. How one man built Chanel to the brand it is today – and how the brand’s worth skyrocketed after his death.
Karl Lagerfeld’s Legacy
The finale of Chanel’s FW19 fashion show. Source: Vogue.com/Alessandro Lucioni for Go Runway
Last week, Chanel presented the final collection designed by Karl Lagerfeld during Paris Fashion Week. Virginie Viard, the woman who succeeded Lagerfeld, took the final bow on his behalf. This collection will undoubtedly be marked in history as the grand finale of his 64-year long career, with more than 3 decades spent as the creative director of Chanel.
In 1983, Lagerfeld took over the reins at Chanel and turned it into a household name.
He oversaw nearly 8 collections a year at Chanel, while also advising the creative team at Fendi and his own namesake brand. He is best known for the massive spectacle Chanel fashion shows, often taking place in the historic Grand Palais in Paris. Some of the best hits included the Chanel supermarket from the Fall/Winter 2014 collection and the space-themed collection from Fall/Winter 2017 – complete with a functioning rocket.
Chanel FW17 fashion show in the Grand Palais, Paris. Source: Vogue.com
In the early ’90s, he helped push the brand into the new decade and presented a new, sexier and younger version of the Chanel woman.
The hemlines for the classic tweed suits were made shorter and he placed more emphasis on the double C logo for accessories. In other words, he took a risk that paid off.
With a modernised Chanel brand image, sales quickly picked up. Today, the brand brings in over $10 billion in annual sales revenue.
Naomi Campbell modelling for Chanel Spring 1994. Source: Vogue.com
In the past few decades, Chanel’s key products have revolved around bags and accessories due to the monogram logo during the ’90s. The iconic Chanel flap bag created by Coco Chanel in 1955 remained as Chanel’s hallmark bag but has since been revised during Lagerfeld’s reign at the brand.
The bag was reissued in different sizes, colours and finishes. He also introduced the Chanel Boy Bag in 2012, a tribute to the original bag.
Left: Chanel Boy Bag Right: Chanel Classic Flap Bag
A Resale Goldmine
Moments after his death was announced, the RealReal reported an influx in searches and sales for Chanel, especially for accessories and bags. FarFetch, a multi-brand retailer echoed similar sentiments.
Omnilytics’ data showed an approximately 33% increase in a total sell-out for vintage Chanel sold on FarFetch.
The chart below shows the comparison of sell-out rates 2 weeks before the announcement and 2 weeks after.
From the 1st to the 18th of February, the total sell-out for Vintage Chanel was 42%. Two weeks later, the sell-out increased to 75.2%. Among the products that sold out on Tuesday were the Classic Flap, Chanel Wallet-on-Chain and V-stitch chain bag.
Chart of total sellout performance for vintage Chanel at Farfetch for February 2019.
The bidding-based resale website, StockX noticed a 25% increase in the number of bids for Chanel on their platform too. eBay, on the other hand, reported a spike in searches for Fendi items. According to WWD, searches for Karl Lagerfeld on Depop increased 1351% after his death.
A similar phenomenon happened when Pheobe Philo stepped down as the creative director of Celine too. After her departure, sales for Philo’s designs experienced a surge in sales.
Event triggered sales such as these affect both market demands and price fluctuations. Rarer Lagerfeld-led Chanel items will undoubtedly increase in appreciation value. Such examples are the limited edition Chanel couture clutch going for £49,854 and a 2018 Chanel surfboard from 2018 going for £9,150.
Chanel surfboard going for £9,150 on Vestaire Collective.
Of course, this isn’t uncommon. Fashion, like other businesses, is reliant on the basic rules of economics.
Current and anticipated events will impact supply and demand, especially in the resale market. Big shifts at a brand can ultimately lead to appreciation values of their products.
Understanding what consumers are buying into and how the stock is moving will assist in setting market prices according to market demands.
With that said…
But still, the world cannot deny the impact that Karl Lagerfeld had. He embodied the definition of an artist – and will continue to be remembered as such.