What Fashion Can Learn From Chanel’s New Global CEO

This week, Chanel surprised the fashion world with its choice of a new global chief executive.

The luxury giant tapped Leena Nair, the former chief human resources officer at Unilever, generating front-page headlines in her native India. She received an outpour of congratulations on social media, comparing her to other Indian business leaders who have risen to the top of Western companies including Microsoft, Twitter and Pepsi Co., whose former chief executive officer Indra Nooyi publicly congratulated Nair on her new role.

While her background in consumer packaged goods is not entirely unprecedented — a number of luxury industry leaders from Dior’s Pietro Beccari and LVMH’s Antonio Belloni at LVMH came from Henckel and Procter & Gamble, respectively — Nair’s appointment stands out because of her expertise in human resources.

“HR is no longer a backroom department, it’s a vital part of running any successful business,” Nair wrote in a LinkedIn post four months ago. “And if you want to support your people, you need to understand how the business works, and you need to be visible within the business.”

Young talent today seek employers that put diversity, inclusion and social responsibility front and centre. Luxury competitor Kering, for one, has spent the last few years focusing on sustainability through initiatives like its environmental profit and loss account and investment in secondhand marketplace Vestiaire Collective.

Chanel has been slower to change and has been reticent about its sustainability initiatives (Chanel declined to comment). One professor of fashion design told The Guardian that Chanel is still “adhering to a Eurocentric, colonialist approach to fashion.” By handing its top position to an HR pro, Chanel is signalling that modernising its culture is just as important as generating profits.

Nair’s ascension to the top job at Chanel also marks an important step for gender and inclusion within fashion. When she assumes her position in January, Nair will be the only woman of colour running a major global luxury brand.

For Nair, however, it’s not just the glass ceiling that she’s shattering. In contrast to luxury leaders like François-Henri Pinault or Bernard Arnault, she was born and raised in India. Nair climbed the ladder at Unilever throughout her 30-year tenure before eventually becoming the first woman and youngest-ever chief human resources officer at Unilever, which in itself makes her a strong candidate to take the lead of a global brand like Chanel.

But in an industry where the key customers are predominantly women, fashion has a poor track record in promoting women to top positions. Luxury, in particular, has long stuck with safe and familiar hires; often choosing white men from privileged backgrounds.

Fashion has a major opportunity to be a pioneer in giving women leadership roles and this week, Chanel has demonstrated that it is ready to take the lead.

THE NEWS IN BRIEF

FASHION, BUSINESS AND THE ECONOMY

Nike acquires virtual fashion start-up RTFKT. The terms of the deal with the company, which specialises in virtual sneakers and other accessories, were not disclosed.

Neiman Marcus nearly quadruples earnings with reduced markdowns. The Dallas-based retailer booked $156 million in earnings for the period ended Oct. 30, up from $41 million in the same period last year, people familiar with the matter told Bloomberg.

Inditex nine-month net profit more than triples to $2.8 billion. The Zara owner said sales were pacing ahead of levels seen in 2019 and up by a third compared to 2020. This comes as the company has shuffled its senior management. Marta Ortega, daughter of the company’s founder, is set to take over as chair next April.

H&M quarterly sales rise 8 percent, returning to pre-pandemic levels. The Inditex competitor’s sales were in line with expectations, clocking in at $6.2 billion.

US retail sales trail forecast, suggesting drag from inflation. The value of overall retail purchases increased 0.3 percent, the smallest advance in four months after a revised 1.8 percent gain in October, Commerce Department figures showed Wednesday.

Milan’s men’s fashion week confirmed in January with 23 physical shows. The recently rebranded Zegna will open Milan Fashion Week’s January menswear edition‚ which is planned to go ahead in physical form from Jan. 14 to 18, the event’s organising body, Camera Nazionale Della Moda Italiana, said.

Boohoo falls to five-year low as shoppers return more party wear. The UK online fast-fashion retailer — which has been recently plagued by a labour scandal — slashed its earnings and sales projections. It said sales growth will be no more than 14 percent, down from an earlier projection of 25 percent.

Chanel names winners of inaugural ‘Next Prize.’ Winners of the €100,000 ($113,000) prize — which supports the wider arts — include Jung Jae-il, a Berlin-based composer, performer, music director and producer and Rungano Nyoni, a Zambian filmmaker based in London.

China’s factories speed up, new Covid pain hits retailers. Factory output in the region grew faster than expected in November, but retail sales only rose 3.9 percent from a year earlier, below the 4.6 percent growth expected.

Chinese manufacturing hub fights its first 2021 Covid-19 outbreak. The province Zhejiang reported 74 locally transmitted cases with confirmed symptoms on Dec. 12, official data showed on Monday, almost double the previous day’s 38 cases.

PEOPLE

Chanel names fashion outsider chief executive. Unilever human resources chief Leena Nair will lead the business in a time of transformation, following several changes in governance and financial structure for the French luxury brand. Chanel’s current CEO Alain Wertheimer, who co-owns the brand with his brother Gerard, will become global executive chairman when Nair joins in January.

Michele Norsa exits Salvatore Ferragamo. The luxury group’s executive vice chairman will depart on Dec. 31. Former Burberry chief executive Marco Gobetti will be co-opted to the board of directors in addition to serving as chief executive and general manager (a move announced in June), and Angelica Visconti will take on the role of vice chairman, effective Jan. 1, 2022.

Dries van Noten appoints Axel Keller president. The former Jil Sander chief executive will succeed Matteo De Rosa at the luxury fashion brand, and Sabine Fineau will join as vice president.

Vetements names Guram Gvasalia creative director. The Zurich-based fashion house’s co-founder and chief executive’s first presentation was last month’s Fall 2022 collection. Vetements has not had a creative director since Gvasalia’s brother, Vetements co-founder and Balenciaga creative director Demna Gvasalia stepped down in 2019.

Compiled by Joan Kennedy.