Chanel Returns to Growth as Blazymania Kicks In

PARIS — Chanel sales returned to growth last year, shaking off a punishing industry downturn with investments in new stores and a sweeping creative revamp that positions the French couture and beauty giant to gain further ground on rivals in the coming months.

“Our long-term approach to investment fuelled a year of exceptional creative momentum across the house, which we see positively impacting the 2025 numbers and contributing to the continued strength of our brand,” CEO Leena Nair told The Business of Fashion.

New designs by creative director Matthieu Blazy are still trickling into stores but the designer’s runway debut in October, followed by buzzy outings from New York to Biarritz, have already generated renewed excitement for the label, sparking “Blazymania” shopping frenzies and putting Chanel at the top of Lyst’s brand heat rankings in the first three months of the year.

Sales began to grow by high single-digit percentage points in the second half of the year across product categories and regions, momentum that has continued through the first few months of this year, CFO Philippe Blondiaux said.

“We are on track and confident for the year ahead and beyond,” Nair said. “All indicators are green.” Blazy has brought “new energy, lightness, a strong focus on fabrics and materials” to the brand, she added.

Revenue for the year ending December 31 rose 2 percent to $19.3 billion, with growth led by the US. This compares to a 5 percent decline at LVMH’s fashion and leather goods division, which houses Louis Vuitton and Dior, while sales were down 10 percent at Gucci-owner Kering. Chanel has focused on maintaining a high level of investments, including in its retail network, while many of its rivals are in retrenchment mode, closing stores. Operating profit rose 5 percent.

If Chanel sales grow 10 percent this year, compared to expected 2.5 percent growth for the industry, the brand could grab nearly a third of luxury sector growth this year, Morgan Stanley said in a note this week.

The house increased investments by nearly half in 2024, and has since maintained a high level. Last year’s investments included $700 million in manufacturing, including leather goods after reports of diminished quality weighed on the brand. Other investments were made in client relations, including events, while half of capital investments went towards distribution, with the opening of 41 new stores, in China and Japan as well as Mexico.

The company has also opened a new fragrance manufacturing plant in France and is building new global headquarters in London, set to open at the end of 2026.

The executives said they plan to stick to limited price increases this year, in line with inflation like last year, when prices were increased by 3 percent overall, with a 2 percent rise for fashion.

High end fashion labels including Chanel and Dior have been taking a more cautious approach to price increases after shoppers balked at steep hikes without corresponding product innovation as the post pandemic luxury boom wound down.

In Asia, where Chanel sales were down 0.8 percent over the year, Mainland China, Hong Kong and Taiwan turned positive in the fourth quarter, a trend that has continued into this year, the executives said, expressing confidence about China’s long term potential. China’s slow recovery from a property crisis has crippled the luxury goods industry, which has entered its third year of slump.

“The results of the momentum we see in China today is the result of all the investments we’ve been making in this very important country for us,” said Nair. The executive, who travelled there last month for a week, said she saw “vibrancy” in the market, early signs of GDP stabilization and enthusiasm for Blazy’s collections.

Chanel plans to keep investing in China this year after reopening its Shanghai Plaza 66 boutique and five new fragrance and beauty boutiques last year. It will open a second salon for VIP clients in Shanghai this year.

The house’s specialised crafts centre 19M will present a cultural program at Shanghai’s Museum of Art Pudong in September.

Stay tuned to BoF for updates on this developing story.