Inside The Factory That Makes $10

VERNEUIL-EN-HALATTE, France — Chanel is lifting the lid on the making of its $10,000 classic flap handbag.

For the first time, the French luxury house has opened the doors to one of its leather goods factories as part of its ongoing push to promote its pillar style. The move comes on the heels of last year's high-profile advertising campaign for the 11.12 handbag , starring Brad Pitt and Penélope Cruz.

Bruno Pavlovsky, president of fashion and president of Chanel SAS, said that while the ad blitz helped to burnish the aura of the timeless bag, it coincided with a sharp drop in luxury spending, particularly in China, and growing pushback against a series of price increases that have placed Chanel in the same bracket as rival Hermès.

"We offer high value-added products that require exceptional know-how and materials, as well as extensive training with passionate teams," he added. "If we don't show why it's expensive, people can't know."

Regardless of market fluctuations, the quilted handbag is intrinsic to the house's mystique, maintaining its draw across generations. "At Chanel, there is No.5 and there is the iconic bag," said Pavlovsky. "These are the two drivers of the brand."

Unlike Hermès, which has established a network of directly owned leather goods workshops across France, Chanel has historically worked with a group of manufacturers in France and Italy that collectively employ several thousand people.

Though most of its suppliers also work with other brands, Chanel has partnered with many of them for decades and supported them at critical junctures — during the coronavirus pandemic, for example, or when the original owners retire and hand over the management reins.

Often, that support has come in the form of discreet investments . Among its most recent acquisitions are stakes in two Italian companies: costume jewelry and metal accessories maker Leo France and shoe manufacturer Grey Mer.

Nowadays, Chanel produces two-thirds of its bags with factories that it controls, and one third with suppliers that remain independent, Pavlovsky specified.

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