How Chanel Returned to Growth in 2025

Chanel returned to growth in 2025 after a difficult year for the luxury sector. A creative reset led by artistic director Matthieu Blazy, combined with an influx of first‑time customers, helped the brand regain momentum and reverse the sales decline it experienced in 2024. While the recovery was modest, it showed how product innovation and brand desirability can still drive demand even during a luxury slowdown.

Chanel’s return to growth

Chanel reported revenue of about $19.3 billion in 2025, representing roughly 2% growth at constant exchange rates. The result marked a turnaround from 2024, when sales fell 4.3% to about $18.7 billion amid softer demand across the global luxury market.

The rebound was modest but significant because it ended Chanel’s first post‑pandemic downturn and showed renewed momentum after several years of rapid expansion followed by a slowdown.

Profitability also improved slightly. Operating profit rose to roughly $4.7 billion in 2025, indicating that the company was able to stabilize margins despite continued investment in retail expansion and brand activities.

The Matthieu Blazy effect

A major driver of the recovery was the arrival of creative director Matthieu Blazy, whose early collections reinterpreted classic Chanel products.

His approach focused on reinventing core icons such as:

• Flap bags
• Ballet flats and shoes
• Tweed jackets and ready‑to‑wear staples

Rather than radically reinventing the brand, Blazy refreshed signature designs in ways that maintained Chanel’s heritage while generating new excitement. According to reporting on the company’s results, these updated classics drove demand that exceeded supply, highlighting strong consumer interest in the new direction.

First‑time buyers helped fuel demand

Another key element of the rebound was the influx of customers who had never previously purchased Chanel.

The refreshed product lineup and renewed brand buzz attracted new shoppers, expanding Chanel’s customer base at a time when many luxury brands were struggling to recruit younger or first‑time buyers.

This dynamic matters because luxury growth increasingly depends on new customer acquisition, not just repeat spending from existing high‑net‑worth clients. By pulling new consumers into its ecosystem, Chanel strengthened its long‑term demand pipeline.

Product desirability and pricing strategy

Chanel has historically relied on price increases and strict distribution control to maintain exclusivity. The company does not sell its ready‑to‑wear or leather goods collections online, pushing customers to visit boutiques instead.

New products such as premium handbags and shoes—like high‑end leather flap bags or luxury ballet flats—encouraged affluent shoppers to visit stores to purchase in person.

This retail‑focused strategy reinforces Chanel’s brand positioning and helps sustain high margins compared with many other fashion brands.

Retail expansion continues

Alongside its product push, Chanel continued expanding its physical retail network. The company has invested heavily in boutique openings and renovations, aiming to elevate the in‑store experience and reinforce the brand’s exclusivity.

Luxury brands increasingly view boutiques not just as sales points but as immersive brand environments, making store investment a core part of long‑term strategy.

How Chanel compares with LVMH and Hermès

Chanel’s return to growth occurred during a turbulent period for the luxury industry, making comparisons with rivals revealing.

LVMH: growth slowdown

LVMH, the world’s largest luxury group, reported €80.8 billion in revenue in 2025, but sales declined 5% on a reported basis and about 1% organically. Profit from recurring operations totaled €17.8 billion, with net profit falling about 13% year over year.

The results reflected weakening demand in some categories and regions, particularly in fashion and leather goods.

Hermès: continued outperformance

Hermès continued to outperform most luxury peers. In 2025 the company reported €16 billion in revenue, up 9% at constant exchange rates, with recurring operating income of €6.6 billion.

That translated into an operating margin of about 41%, one of the highest in the global luxury industry.

Where Chanel sits

Compared with these rivals, Chanel’s performance sits somewhere in the middle:

• Stronger momentum than the broader slowdown affecting many luxury groups
• But still far behind Hermès in terms of growth rate and profitability

Its modest 2025 rebound suggests stabilization rather than a full acceleration.

What Chanel’s recovery signals for luxury

Chanel’s 2025 results highlight several broader trends shaping the luxury sector:

• Creative leadership matters. Fresh design energy can quickly reignite demand.
• Iconic products remain powerful. Reinvented classics often sell better than entirely new concepts.
• New customer acquisition is critical. First‑time buyers are becoming a key driver of growth.
• Retail experience still matters. Physical boutiques remain central to luxury brand strategy.

In a period when many luxury houses struggled with slowing demand and pricing fatigue, Chanel’s return to growth demonstrates how brand heritage combined with carefully refreshed design can restore momentum.