Chanel is reportedly buying its flagship London store from landlords for about $402 million, 30% above asking price

• Chanel is paying about $402 million — 30% more than the asking price — to buy its flagship London store, The Times reported.
• Chanel has rented the store on Bond Street up until now, and competed with a range of overseas investors to secure the deal.
• The street is the world's third-most expensive to own a business on, with annual rents averaging £1,333 ($1,753.8) per square foot towards its northern end.

Luxury French fashion house Chanel is buying its flagship London store for around £310 million ($402 million), The Times reported on Tuesday.

This is around 30% more than the reported asking price of £240 million ($315.7 million).

The store is on Bond Street — the street's northern end, known as New Bond Street, is the world's third-most expensive to own a business on.

The branch of the luxury French fashion house has three floors of clothing, jewellery, and beauty products, and is one of 14 Chanel boutiques in London, though many are located in department stores. When it opened in 2013, the store in London's fashionable West End was the world's largest Chanel boutique.

Swedish pension fund SEB is selling the property through advisory firm JLL. In August, the store became the first property on Bond Street, popular with designer brands, to come to the market since the pandemic began.

The fashion house competed with private investors from Hong Kong, the US, and central Europe, as well as the Abu Dhabi royal family, The Times reported.

Tourism has hit luxury goods, but Bond Street still draws brands

The decline in international tourism and the rise in home working during the COVID-19 pandemic has hurt the luxury goods market. In September, Springboard announced that less than half as many people visited central London than at the same time last year.

The slump has hit turnovers. Stores in the area have an annual turnover of around £10 billion ($13.2 billion), but March to year-end sales are expected to fall to roughly £2.5 billion ($3.3 billion), according to NWEC, which represents traders in the area.

Despite the drop in earnings, Bond Street is still popular with designer brands. In June, French fashion house Balenciaga took over a lease on the street, while a new store for Italian fashion house Brunello Cucinelli also opened.

The northern section of the street, known as New Bond Street, was last year found to be the world's third-most expensive street to own a business, with annual rents averaging £1,333 ($1,753.8) per square foot.

In 2019, Chanel reported revenue of $12.3bn, which was 13% higher than 2018. The fashion house also reported a 16.6% jump in operating profit to $3.5 billion.

In June, the firm said it expects to turn a profit in 2020, though it anticipates a significant drop compared to 2019 figures.

Chanel did not immediately respond to Business Insider's request for comment.