We have been able to make some significant investments for the long term over the last few years across all our activities. Upstream in the FASHION activity value chain, for example, we have invested in a number of manufacturing and production sites. These are essential for CHANEL, but also for the luxury sector as a whole, to thrive — from the footwear manufacturer Roveda in Italy to the Bodin-Joyeux tannery in France and the cashmere producer Barrie Knitwear in Scotland. All these production companies are part of an ecosystem, one we have created for the European luxury-fashion industry to deliver outstanding creations, but also one that enables us to ensure the long-term sustainability of specialist industries that might otherwise disappear. Within our FRAGRANCES & BEAUTY activity, we have built in-house creative teams and designers in Paris; integrated research and development activities in Paris, New York, and Tokyo; and fully owned production facilities north of Paris. Our focus on the long term means we can take a slower, more deliberate approach to new product development. The fragrance market is highly competitive, driven by hundreds of new product launches every year. However, we do not believe this rhythm of new product launches is sustainable for the CHANEL brand over the long term. For this reason, we introduce new fragrance products, on average, every 10 to 12 years. This ensures we have sufficient financial and human resources to build our brands over the long term. For example, we launched the new GABRIELLE CHANEL FRAGRANCE 12 years after COCO MADEMOISELLE. The result of this long-term brand vision is that we have three brands in the top five worldwide. Focusing on the long term has also meant we can deliver products that are both desirable and sustainable for our customers. One aspect central to the development and growth of our WATCHES & FINE JEWELRY activity has been the consolidation of all aspects of watch and jewelry making. Investing in our own horological manufacturing capabilities in Switzerland and an integrated fine-jewelry workshop on Place Vendôme was a strategic decision that strengthened our authenticity. HOW WE MEASURE BRAND EQUITY In order to measure brand equity, we carry out annual studies of consumer perceptions of our brand. Each study takes into account a large number of consumers across all of our key markets. The studies analyze brand perception according to detailed criteria such as saliency (brand awareness), value (what qualities the brand represents for consumers), strength (to what extent the brand is loved by consumers), and desirability (to what extent the brand is “for me”). The company has conducted brand equity studies for over 25 years. The results are analyzed in detail each year and discussed among the brand’s top management, laying the foundation for our key strategic decisions. INTRODUCTION