Chanel Sales Drop 4.3% Amid Market Slowdown, Maintains $1.8B Investment Plans

Chanel reported a 4.3-4.5% decline in sales in 2024, with revenues falling to approximately $18.7 billion, and profits dropping by over 28%, marking its first sales decline since 2020 due to economic headwinds and changing consumer behavior. The luxury brand faced significant challenges in key markets, with sales down 7.1% in Asia-Pacific and 4.2% in the Americas, while Europe showed modest growth. Despite these setbacks and a 30% operating profit drop, Chanel plans to maintain its high investment levels, including $1.8 billion in capital spending and $600 million in supply chain internalization, as it opens 48 new stores predominantly in the U.S. and China. CEO Leena Nair emphasized the uncertain macroeconomic and geopolitical environment but reaffirmed confidence in long-term growth, particularly in the U.S. market, and highlighted the appointment of new creative director Matthieu Blazy who will not introduce menswear. Chanel is also cautious on pricing, suspending planned increases amid tariff uncertainties and inflation concerns, though a 3% price rise occurred last year with potential further increases tied to gold prices for jewelry. Overall, Chanel continues to invest aggressively in store expansion and supply chain control despite the current downturn and market volatility.