Chanel Sees Revenue Growth in 2025 as New Designs Attract First-Time Shoppers
Chanel’s 2025 Performance and Market Impact
By Helen Reid
Revenue Growth Driven by New Designs
LONDON, May 19 (Reuters) - Parisian fashion house Chanel has drawn in shoppers who had never bought the brand before, as creative director Matthieu Blazy's reinvented versions of classic bags, shoes and jackets drove demand that outstripped supply and a return to growth.
The privately-owned company on Tuesday reported a 2% rise in revenue in 2025 in currency-adjusted terms to $19.3 billion. Chanel's revenue had declined 4.3% in 2024 when even the most high-end fashion labels reached the limits of demand after making big price hikes in a post-pandemic luxury boom.
Blazy, who took over from Virginie Viard last year and presented his first collection in October, has reinvigorated the brand with designs such as the slouchy leather "maxi flapbag", retailing for $8,500, and bright, frayed versions of the classic Chanel tweed jacket.
Creative Momentum and Financial Performance
"What we saw in 2025 was a creative momentum across all our business activities," Chief Executive Officer Leena Nair told Reuters in an interview, adding that investments made in 2024 had laid the foundations for the sales rebound.
Chanel's operating profit also grew 5% to hit $4.7 billion, up from $4.5 billion in 2024 but lower than its level in 2021 to 2023.
Demand, Supply, and New Client Acquisition
Demand Has Far Outstripped Supply
'DEMAND HAS FAR OUTSTRIPPED SUPPLY'
When Blazy's first collection landed in stores in March shoppers flocked to buy new handbags, two-tone pumps in mint green and black for $1,450, and multicoloured tweed jackets.
First-Time Shoppers and Market Response
“The recruitment of new clients – who hadn’t previously bought Chanel - has been phenomenal," Simon Longland, director of fashion buying at high-end department store Harrods in London, told Reuters in an interview.
“The demand has far outstripped supply, correctly so on some of the special pieces because, while there may be people disappointed they don't have the jacket they wanted, if everyone who wanted the jacket had got it, they would all be arriving somewhere in the same jacket," Longland added.
Competitive Landscape and Global Performance
Comparison with Rivals and Regional Growth
Chanel's 2025 growth rate was slower than rival Hermes, which grew sales 9.8% to 16 billion euros, but better than LVMH's fashion and leather goods division (including Louis Vuitton and Dior), which declined 5% to 37.77 billion euros.
Despite Trump's tariffs, the U.S. drove most of the growth, with sales up 7.2% in currency-adjusted terms in the Americas region, while Asia-Pacific - Chanel's biggest region by sales - declined 0.8% and Europe grew 2.5%.
Chanel raised prices by 3% overall and 2% for fashion products in 2025, and plans similar increases this year, said Chief Financial Officer Philippe Blondiaux. He said Chanel's business in the Middle East - accounting for around 4% of revenue - had been resilient despite the Iran war.
Having opened 41 stores last year, Chanel plans to open 30 stores this year including nine fashion boutiques, with openings planned in Boca Raton, Florida, and Palo Alto and San Diego in California.
Industry Implications and Future Outlook
Threat to Rivals, or Sign of Luxury Revival?
THREAT TO RIVALS, OR SIGN OF LUXURY REVIVAL?
As rising inflation means fewer shoppers have the means to buy luxuries, Chanel's success could threaten the turnaround attempts of Dior, Louis Vuitton, and Gucci, analysts say.
"The bears (where our own view is currently tilted) would argue that in the context of anaemic industry growth, Chanel's revival has to come at the expense of peers," Morgan Stanley analysts wrote.
Positive Indicators for the Luxury Market
But rival luxury labels could also see the hype around Chanel as a positive, in that it shows a revival is possible.
"I view it as a good indicator for luxury that Chanel is creating a buzz that you've just not had in quite a few years,” said Harsharan Mann, portfolio manager and consumer sector lead at Aviva Investors in London.
“Chanel’s success does show luxury really is an offer-driven market and even in a tougher economic environment, if you bring in new creativity it can drive interest and sales,” said Mann.
Influence on High-Street Retailers and Ownership
High-street retailers have taken note and copycat Chanel looks have proliferated in recent months, from a faux-tweed yellow and black check fringed jacket for $169 at Zara, to a cropped cream jacket with Chanel-esque gold statement buttons for $59.99 at H&M.
Chanel is owned by French billionaire brothers Alain Wertheimer and Gerard Wertheimer.
(Reporting by Helen Reid; editing by Barbara Lewis)
