Chanel, long seen as a bellwether of the global luxury market, reported a 4.5 per cent decline in sales for 2024, falling to 18.7bn dollars, as economic pressures and shifting consumer behaviour weighed on the industry. Operating profit fell more sharply, down 28.2 per cent to 4.5bn dollars, according to results released on Tuesday. The downturn marks a notable contraction at one of the sector’s most resilient houses—renowned for its ability to defy broader market turbulence.
The slowdown aligns with a broader malaise afflicting the high-end fashion and luxury sector. Industry giants including LVMH and Kering have reported weaker-than-expected results, In the first quarter of 2025, LVMH reported revenue of 20.3bn euros, marking a 2 percent decline year-over-year. The company's fashion and leather goods division, encompassing brands like Louis Vuitton and Dior, experienced a 5 percent drop in organic sales. In the same period Kering reported a 14 percent decline in revenue, primarily driven by a significant 25 percent drop in sales at its flagship brand, Gucci.
Chanel’s global chief executive, Leena Nair, addressed the macroeconomic headwinds directly: “It’s a challenging time in the world… and it continues to be challenging.” Speaking to investors, Nair underscored the company’s long-term vision and commitment to strategic investment despite current pressures.
Founded in 1910, Chanel has often distinguished itself from industry peers by remaining privately held and independent. Unlike publicly traded competitors, the French house is not beholden to shareholder demands, allowing it a degree of strategic patience rarely seen in the sector.
In response to the downturn, Chanel is placing renewed emphasis on its fashion division. The maison will soon unveil its first collection under the direction of Matthieu Blazy, the former creative lead at Bottega Veneta, who joined Chanel in late 2024. Blazy’s appointment follows the quiet departure of Virginie Viard and signals a fresh creative direction for the brand, with industry insiders anticipating a stronger push into ready-to-wear innovation.
Speculation continues to swirl around a potential men’s line—a notable departure for a house long focused on womenswear, accessories, and beauty. While Chanel has never formally entered the men’s market, the move would reflect both commercial opportunity and the evolving landscape of luxury consumption.
Despite the overall earnings dip, Chanel is doubling down on one of its most resilient revenue streams: fragrance and beauty. The company opened 53 standalone beauty boutiques in 2024, with another 48 openings planned for 2025, strengthening its direct-to-consumer (DTC) model, the Business of Fashion said. Chanel's expansion in this segment comes amid rising competition and a more price-sensitive consumer environment in beauty—a category that, while broad-reaching, has thinner margins and lower brand exclusivity compared to haute couture.
The fragrance and beauty market is not without its challenges, Still, Ms Nair reiterated Chanel’s long-term approach: “We remain committed to our investments because we always take a long-term approach. We’ve navigated many ebbs and flows in these 100 years that we’ve been around, and we’re using this moment always to focus, to double down on what makes us uniquely ‘Chanel.’”
Industry analysts suggest that Chanel’s market power, driven by brand heritage and scarcity, remains a formidable moat. China, especially, holds opportunity for the French luxury house. “It’s one of the most dynamic and important markets for the luxury ecosystem, Nair told Vogue Business. "The pace of adoption of luxury, the frontiers of online/offline retail. We opened 15 new boutiques in 2024. In 2025, we’ll open another 15 boutiques, and we continue to do a lot of investment in celebration in China.”