Unpacking Chanel’s 2024 Performance: Profit Pressures and Strategic Bets

Chanel’s 2024 financial results are in—and they’re a revealing snapshot of where the brand, and much of soft luxury, stands today.

Sales dipped 4%, and operating profit dropped a significant 30%. While Chanel cites macro softness—especially in China’s leather goods market—the real story is layered. The brand isn’t just reacting to headwinds. It created some of its own.

During the pandemic boom, Chanel aggressively raised handbag prices, betting on insatiable demand. But in 2024, that move backfired. The brand’s pricing power is now constrained, especially with more discerning Chinese consumers. The result: leather goods, Chanel’s core profit engine, underperformed—dragging down an otherwise growing portfolio that includes ready-to-wear, beauty, fine jewelry, and watches.

Interestingly, Chanel is doubling down on its long-term strategy by investing heavily in beauty retail. The company spent $1.8 billion last year opening standalone fragrance and beauty boutiques, including many in China. Unlike most competitors still reliant on Sephora or Ulta, Chanel has always owned its retail presence. That early DTC commitment is now being extended into beauty, ahead of the curve.

Still, Chanel remains one of the most profitable and admired brands in the world. But the challenge is now clear: Matthieu Blazy, recently hired to lead design, must reignite product desire—especially in handbags and shoes, which remain Chanel’s real growth levers.

Chanel’s identity has always lived in the tension between fashion and legacy. The next few years will test whether that hybrid model can still win in a more discerning global market.