The tweed jacket on the third floor of 31 rue Cambon has been there since February

The tweed jacket on the third floor of 31 rue Cambon has been there since February. It is not for sale. It sits on a dress form in one of the ateliers, mid-construction, basted sleeves hanging loose, the armholes still chalk-marked. The woman working on it has been at Chanel for nineteen years. She will finish it in three weeks. Someone will wear it once, perhaps twice. This is not unusual.

Chanel operates at a scale that makes the handmade jacket feel like an anachronism and a necessity at the same time. The house reported €19.7 billion in revenue for 2023, most of it driven by handbags and fragrance. The jacket exists anyway, made the same way it was made in 1957, because Chanel has decided that certain things do not bend to logic.

Foundations and the Coco mythology

Gabrielle Chanel opened her first shop in 1910. She was thirty-seven when she showed her first full collection in 1925, already late by the standards of the era. What she built was not particularly revolutionary in concept—she borrowed from menswear, from sportswear, from uniforms—but it was revolutionary in degree. She took the waistline off the dress. She put women in jersey. She made the shoulder a clean, unpadded line. These sound like small moves now. In 1925, they collapsed a century of tailoring convention.

The suit arrived in 1954, after the war and a long absence. Chanel was seventy-one. The proportions were exact: a boxy jacket with a weighted chain sewn into the hem, a skirt that hit just below the knee, sleeves that stopped at the wrist bone. It was not designed to flatter in the way that Dior's New Look flattered. It was designed to move, to sit on a body that walked and worked and did not require assistance getting dressed.

Karl Lagerfeld arrived in 1983 and stayed for thirty-six years. He understood that Chanel was not a set of rules but a vocabulary, and he used it to say different things each season. He put the tweed jacket over jeans. He sent models down a runway built to look like a supermarket, a rocket launch, a Parisian street. He kept the double-C logo in play but refused to let it calcify. What he did not do—and this mattered—was try to make Chanel young. He made it current, which is not the same thing.

The Virginie Viard era and its discontents

Virginie Viard took over in 2019, two months after Lagerfeld died. She had been at the house since 1987, first in embroidery, then as Lagerfeld's right hand. The appointment made sense on paper. She knew the ateliers, knew the vocabulary, knew what Chanel was supposed to feel like.

What followed has been five years of work that is competent, wearable, and oddly inert. Viard's collections do not make mistakes. They also do not take risks. The tweeds are softer, the silhouettes more relaxed, the shows smaller in scale. The Spring/Summer 2024 show, staged on a beach set with real sand, felt like a holiday brochure. The clothes were fine. They were also forgettable, which is a more serious problem for Chanel than being divisive.

The criticism has been consistent and increasingly loud. Viard's Chanel feels like Chanel in the way that a good copy feels like the original—all the notes are there, but the resonance is missing. The tweed jacket has become a signifier of the tweed jacket, not a garment with its own point of view. The shows generate polite applause and no conversation. In an industry that runs on both reverence and provocation, Chanel under Viard has managed neither.

Revenue has not collapsed, which complicates the narrative. The house continues to perform, buoyed by handbags—the Classic Flap, the Boy, the 19—and by No. 5, which remains one of the best-selling fragrances in the world. But growth has slowed. Competitors, particularly Hermès and Brunello Cucinelli, are taking market share among the clients who used to buy Chanel by default. The brand still has heat in certain categories. Ready-to-wear is not one of them.

The commercial engine and what it runs on

Chanel does not publish detailed financials, but the broad strokes are clear. Leather goods account for roughly half of revenue. Fragrance and beauty make up another quarter. Ready-to-wear, haute couture, and watches split the remainder. The business is less dependent on fashion than almost any other luxury house, which gives it room to take risks in the ateliers. It has chosen not to.

The handbag business is where Chanel has been most aggressive. Prices have risen sharply—over 60 per cent since 2019 for the Classic Flap—without a corresponding drop in demand. The strategy is textbook Hermès: restrict access, raise prices, let scarcity do the work. It has been effective, at least in the short term. Whether it holds when the broader luxury market softens is an open question.

The fragrance arm operates almost independently. No. 5 was created in 1921 and has never stopped selling. Chance, Coco Mademoiselle, and Bleu de Chanel have all become category leaders. The perfumes do not need the runway to succeed, but they benefit from it. A strong collection gives the whole house a lift. A weak one does not sink the fragrance sales, but it does not help them either.

Chanel's refusal to sell online—still, in 2025—is both a strength and a liability. It forces clients into boutiques, which preserves a certain experience and allows for tighter inventory control. It also cedes ground to competitors who have made e-commerce seamless. The house insists this is a choice, not a limitation. The distinction may not matter if the next generation of clients decides that going to the store is not worth the effort.

Where the house stands now

Chanel is in a strange position. It is commercially robust, culturally adrift, and creatively static. The ateliers remain extraordinary—there are over 600 people working in the Métiers d'Art workshops alone—but they are not being asked to do anything new. The shows are well-executed and mostly irrelevant. The brand has cache, but cache is not the same as momentum.

There is talk, persistent and unconfirmed, that Viard's tenure may not last much longer. The house has not commented. What is clear is that Chanel cannot continue as it has been and expect to hold its position. Hermès succeeds by being Hermès more intensely each year. Chanel under Viard has been Chanel more quietly, which is not a strategy that works when you are trying to justify a €10,000 jacket.

The question is not whether Chanel will survive—it will, barring a catastrophic miscalculation—but what it will become. A heritage brand that trades on its past? A commercial juggernaut that happens to make clothes? Or something that feels, again, like it has a point of view worth paying attention to?

The jacket on the third floor is nearly finished now. The sleeves are set, the lining tacked in, the buttons sewn by hand with a chain stitch that will not come loose. It weighs exactly 450 grams. The woman who made it has started on the next one. She does not think about revenue or creative directors or market share. She thinks about the fall of the cloth and whether the shoulder sits clean. Somewhere in that gap—between what the atelier knows and what the house is willing to say—is the future of Chanel, if it can figure out how to close it.