A LONG-TERM PERSPECTIVE In 2016, we launched La MONTRE MONSIEUR, We are also building a long-term partnership the first CHANEL watch with a movement with Palais Galliera as the exclusive sponsor, designed and manufactured completely responsible for financing the construction of in-house. Structured around a single circular new exhibition rooms. The Palais Galliera will bridge that connects all the elements of the become the first permanent fashion museum movement, we created it through an artistic in France and contribute to promoting both and investment haute horlogerie partnership fashion and Paris by making its exceptional with independent watchmaker Romain Gauthier. fashion archives accessible to all. Downstream, we are investing significantly for the long term in the client experience, working THINKING LONG TERM THROUGH out how best to embrace digital innovation in OUR PRICING STRATEGY a way that maintains both the exclusivity and In 2015, we were the first in our industry sector to quality of the overall CHANEL experience. introduce worldwide price harmonization for handbags. Our strategy is to increasingly personalize This decision was made in order to reduce price client service and experiences while differentials that may have existed across markets maintaining our long-term commitment to and in order to offer our products to all of our clients physical retail boutiques, which are an integral at a harmonized price, regardless of location. part of how our clients interact with CHANEL. Our value chain is part of a much broader Our strategy was a bold one initially, but it was a luxury system, which must continually be move in favor of our customers. For them, and purely nourished, protected, and supported. out of fairness, it was no longer acceptable for us For example, earlier this year, we announced to allow significant price differentials to develop. sponsorship for two projects that will support We were courageous first-movers in this matter and Paris’ position as the home of fashion. First, are satisfied with how our strategy has played out: we will invest €25 million in the restoration The resale market has decreased, the traffic in our and renovation of the Grand Palais, a symbol boutiques is clearly more balanced, and we have the of architectural innovation in Paris since opportunity to better serve our clients and create an its creation. CHANEL and the Grand Palais experience in line with our standards of excellence. have developed a close bond, initiated by Karl Lagerfeld in 2005. The exceptional nave of the Grand Palais is the location of many elaborate Haute Couture runway shows, and an iconic building that truly represents Paris.