Chanel spent €118 million on Paris building near flagship store
(Bloomberg) -- Chanel Ltd. splurged on a property near its main boutique in Paris last year as luxury brands seek to secure prime locations for their stores.
The building, located at 23 rue Cambon — close to Chanel's flagship boutique at No. 31 — was purchased for €118 million ($133 million) in September, according to a property database.
The acquisition 'was part of the record level of investment made during the year, including in real estate,' a Chanel representative said.
The luxury label known for its tweed suits and No. 5 fragrance has had a presence on the street since 1910, when founder Coco Chanel opened a hat shop. Rue Cambon is located near the Tuileries Garden and the Place de la Concorde, where the exclusive Crillon hotel sits, making it a top tourist destination. The Elysee Palace, the official residence of the French president, is also situated nearby.
Owning a store can protect a retailer from ever-increasing rents and make it easier to justify the significant expense of turning boutiques into destinations where well-heeled customers want to spend hours shopping. Luxury players, notably LVMH Moët Hennessy Louis Vuitton SE, have invested heavily to transform stores into art and food destinations.
Chanel also announced last year that it bought a building on Paris's upscale avenue Montaigne, without disclosing the price.
Earlier this week, Chief Financial Officer Philippe Blondiaux said the company spent around $600 million buying property last year.
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