Chanel announced yesterday its financial results for 2024, marked by a sharp decline after several years of record growth. The Rue Cambon-based fashion house is suffering from the slowdown in the global luxury market, while continuing to pursue an ambitious investment strategy.
Chanel is slowing down its rapid pace. The company, now the world's second-largest luxury brand, yesterday unveiled lower financial results for the 2024 fiscal year. Its net profit fell 28.2% to €3.4 billion, while revenue declined 4.3% to €16.2 billion.
“After a period of exponential growth, we have been faced with more challenging macroeconomic conditions,” said Leena Nair, Chanel's CEO, referring to the tense international context. Nevertheless, she announced the opening of 48 new stores in 2025, proof that the company is committed to the long term despite the headwinds.
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After growth of 16% in 2023 and 17% in 2022, these figures could be interpreted as a simple return to post-pandemic normality. But they also reveal a strategic shift in a more complex environment. The brand is facing a sharp slowdown in its two historic growth engines: Asia-Pacific (-7.1%) and the United States (-4.2%). Chanel is also awaiting clarification on US customs policies, which could further impact its pricing strategy.
This last point is not insignificant: repeated price increases on iconic products, particularly handbags (+7% in 2023, +3% in 2024), could have dampened the enthusiasm of an “aspirational” clientele that is as sensitive to status as it is to price.
At the same time, Chanel is pursuing a bold investment policy: $1.755 billion will be injected in 2024, up 43% on the previous year. These investments are mainly focused on luxury real estate, with the purchase of 42 Avenue Montaigne in Paris and the opening of a new flagship store on Fifth Avenue in New York.
“Our choices are part of a long-term vision,” emphasized Philippe Blondiaux, Chanel's chief financial officer. The company is now targeting high-potential markets such as India and Mexico, while continuing its strategy of moving upmarket.
The workforce has also been strengthened, with 38,400 employees compared to 36,500 in 2023. This is further proof that Chanel, despite the turbulence, continues to invest in the future.
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