Luxury fashion isn’t supposed to blink.
Even when the world tilts — tariffs rise, demand dips, and raw materials cost more — the most exclusive brands usually lean in. They hike prices, limit supply, and signal even more exclusivity.
A handful of years ago, I remember walking into a Chanel boutique and spotting the Classic Flap bag. I glanced at the price tag, winced, and promised myself that one day, I’d have one.
Related: Cartier and Van Cleef owner announces surprising year-end results
The next year, that same bag was over $1,000 more.
💵💰Don’t miss the move: Subscribe to TheStreet’s free daily newsletter💰💵
When I asked about the jump, a sales associate explained the brand quietly raises prices every year — especially on classics — and advised me to “buy sooner rather than later.” So I did.
And sure enough, prices continued climbing like they were training for a Chanel-themed Mount Everest.
Now, that trend is continuing — but maybe (hopefully) with a little less intensity.
Chanel plays offense as others retreat
Christian Vierig/Getty Images
Chanel expands while keeping price hikes in check
Chanel just reported its first annual sales drop since 2020 — down 4.3% — and a 30% fall in operating profit. But instead of slowing down, the brand is going all in, according to Reuters,
It plans to keep its $1.8 billion capital investment steady this year — a 43% jump from the year before — and will pour another $600 million into its supply chain, including stakes in a French silk supplier and Italian jeweler.
Chanel also plans to open 48 stores in 2025, with nearly half landing in the U.S. and China. Just six of those will be fashion boutiques — the rest aim to boost categories like beauty and jewelry.
Related: Burberry plans major layoffs in desperate reset for luxury brand
Despite inflation and rising gold costs, Chanel only raised prices by about 3% last year. And while CFO Philippe Blondiaux said another increase may come in 2025, he signaled it would likely stay in line with inflation.
That’s a more restrained stance at a time when the luxury market is cooling. And Chanel’s betting that a gentler approach to pricing — paired with global expansion — might just be the edge it needs.
Chanel doubles down on investment as others cut back
Chanel’s approach stands in stark contrast to the rest of the luxury pack.
What makes Chanel’s approach so risky — and potentially brilliant — is that it’s playing offense while the rest of the industry tightens its belt.
Most brands are raising prices and consolidating. Chanel is opening more stores and taking a more flexible stance on pricing. Bold move, Coco.
It’s a gutsy move, especially in a shaky market. But it also signals confidence — both in its loyal customer base and in its long-term vision.
The big question now? Whether Chanel’s spend-big, price-softly strategy can shake off the slowdown and keep its double-C crown intact.
Related: Veteran fund manager unveils eye-popping S&P 500 forecast
