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Chanel is not immune to the global luxury downturn. The French luxury house’s revenues decreased 4.3 per cent to $18.7 billion in 2024 (on a comparable basis at constant currency). Operating profit was down 30 per cent to $4.48 billion.
“Our 2024 performance follows a period of unprecedented growth for Chanel in which revenues nearly doubled over the previous three years,” said Chanel’s global CEO Leena Nair on a call with Vogue Business on Tuesday. “Macroeconomic and geopolitical volatility is unquestionably challenging for business, and we’ve seen these conditions have an impact on sales in some markets. As a hundred-year brand, we expect ebbs and flows, and we continue to navigate with our long-term strategy.”
Chanel increased its capital expenditure by 43 per cent to a record $1.76 billion in 2024 and plans to maintain the same level of investment in 2025, said Philippe Blondiaux, global CFO, who was also on the call. “We’ll invest a record high amount in the vertical integration of our supply chain this year — close to $600 million — and we’ll continue to invest in the sustainable transformation of our business.”
“We always set our own course, which is why last year we invested more than ever in our fundamentals,” Nair continued. “We made a record level of investment in our boutique expansion, in our client experience, in our creative ecosystem and savoir-faire.”
By region, Chanel’s growth in 2024 was led by Europe (up 0.6 per cent). The Americas were down 4.2 per cent and Asia Pacific down 7.1 per cent. By category, the fashion business “experienced a more challenging context in mainland China, but this was partially offset by strong performance in Japan and Europe”, according to a press release. Fragrance and beauty was driven by makeup and skincare, while the watches and fine jewellery division experienced “dynamic growth”.
After revealing on 2 April that he planned to impose tariffs of 20 per cent on imports from Europe, President Donald Trump later announced a 90-day pause on most reciprocal tariffs (scheduled to end on 8 July) and said import tariffs would be reduced to 10 per cent. While some European luxury companies have been quick to pass the 10 per cent tariff on to American consumers, Chanel plans to stick to its global pricing policy and has a wait-and-see attitude.
“The situation is extremely volatile, negotiations are underway. So we believe the most responsible posture we can take is to wait for the end of the discussion. When things are decided, we ll make a decision on this,” Blondiaux said. “Just to take a step back in terms of pricing, last year the average price increase for fashion was 3 per cent globally, and it was more or less the same for all the product lines. We’ll continue to monitor our prices in 2025 in line with global inflation.”
Chanel typically increases prices every March and September, but it won’t this year, “precisely because of the extreme volatility of the context, we are waiting to see what will be the outcome of all the ongoing discussions”, Blondiaux added.
On the US market, Blondiaux said: “ The US in 2024 was under pressure due to a quite difficult macroeconomic environment. We believe in the US as a long-term opportunity. We continue to invest in the US. We’ve opened a new flagship on Fifth Avenue. We have expanded our boutique in Dallas. We are totally confident that the US remains a land of opportunity for us.”
Nair also stressed the long-term potential of China. “It’s one of the most dynamic and important markets for the luxury ecosystem. 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.” She added that the brand is engaging new clients in the country as it expands in cities like Nanjing and Chengdu.
Blondiaux said the brand remains under-distributed in the country versus its competitors. “We have in fashion 20 boutiques plus four Salons Privés, which compares with usually more than 40 or 50 for most of our competitors. So we’ll gradually expand our distribution, focusing on Tier 2 and Tier 3 cities, because we believe that in the long term, China is a country offering fantastic opportunities.”
Matthieu Blazy: A new chapter for Chanel
Chanel’s growth in 2024 places it right in the middle of a polarised market. LVMH sales dipped 1 per cent in 2024, Kering sales were down 12 per cent, while Hermès sales were up 15 per cent, and Prada Group up 17 per cent.
This raises already high expectations even higher for Matthieu Blazy, the house’s new artistic director for fashion, who took on the role on 1 April and will present his debut collection in just four months.
As speculation surrounding Chanel’s next designer intensifies, we lay out the key priorities for the role.
Nair, who praised the work and expertise of the design studio which has been leading the creative part since Virginie Viard left in June 2024, said: “Matthieu is one of the most talented and gifted designers of his generation, his vision and understanding of Chanel codes convinced us that he was someone who was the best suited for the job. We are completely impressed by his mastery of natural, luxurious materials, his commitment to products, and his commitment to craftsmanship. He is spending a lot of time with the ateliers and in the workshops. We are really excited about what his chapter is going to bring to Chanel.”
Nair, who joined Chanel from Unilever in January 2022, said Chanel is a brand with depth that takes time to truly understand. “I know about it. I did this when I joined four years ago, really immersing myself in the brand, spending so much time with our patrimoine, our heritage, really deep diving into it. So we are approaching Matthieu’s transition, stepping into the role with patience and perspective. We are not just focusing on one collection, but focusing on all the collections to come in the next few years. A vision needs time to unfold. Impact is built over time. So we are doing this in the unique Chanel way with time, with patience, with thoughtfulness, with intentionality.”
Blondiaux added: “What we’ve done last year and continue to do this year in terms of investment is probably the best way to prepare Matthieu’s success because we’ve invested over the last 10 years in close to 70 entities to secure the best quality or materials.” He cited the recent investment in Mantero, a historical Italian silk manufacturer. “Matthieu is spending quite some time visiting all these entities with open eyes. It’s the best way to prepare for Matthieu’s success and to give him the best raw materials to work with.”
In an interview with Vogue Business in May 2023, Nair dismissed the idea of expanding to the menswear category. But speculation is heating up again, fuelled by the fact that Blazy earned his menswear stripes under Raf Simons and then at Bottega Veneta and the fact that Chanel recently released an eyewear campaign starring American rapper Kendrick Lamar — not to mention that Timothée Chalamet has been seen wearing Chanel jackets, scarves and bags.
On Tuesday, Nair was clear: “ It’s going to be the same answer: no, we are not planning to enter men’s. But I’m very happy when I see men all over the world wearing Chanel.”
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