In its new era, Chanel wants shoppers to look beyond bags

The gritty Lower East Side underground location was a surprising choice for Chanel’s first New York fashion show in seven years, even if the Bowery station’s out-of-service platform is often used as a film set and doesn’t have a pizza rat in sight. The setting signaled a re-energized chapter at Chanel, under the creative direction of newly appointed 41-year-old Matthieu Blazy.

Blazy’s arrival in April has given the brand “an incredible halo effect" and its business is “better than ever," Bruno Pavlovsky, president of Chanel fashion, said in an interview on Monday, the day before the runway show. Blazy’s collection showcased jeans and quarter-zip sweaters alongside sequined dresses. Pavlovsky said clothes like these would be more prominently integrated at Chanel’s boutiques, where quilted leather handbags have long been the key draw.

Before the first of two showings began, Tilda Swinton floated gracefully through the crowd in a feathery Chanel top, causing Condé Nast chief content officer Anna Wintour to note wryly that Swinton looked “great for the rain." Jon Bon Jovi, bundled up in a black turtleneck and combat boots, smiled politely for photographers. Seated patiently on one of the show’s low benches, the fashion designer Dapper Dan wore a sequined three piece suit he said he’d made as a homage to the late Karl Lagerfeld.

Christine Baranski, currently starring in “The Gilded Age," said navigating the subway stairs had her slipping out of her Chanel heels. “I thought, ‘Ooooh, OK. And then when do we get to the nice hall with the fashion show?’" Baranski, 73, joked.

American rapper and newly appointed Chanel ambassador A$AP Rocky wore a red Chanel suit at the first presentation on Tuesday. He arrived linking arms with actress and fellow house ambassador Margaret Qualley. They sat in the front row, as did Chanel clients like Jenn Smith, 49, of Boca Raton, Fla., who said the brand had put her up at a five-star hotel and had taken its group of clients to “The Nutcracker" the night before.

Once a train rolled into the station, models hopped off and strutted down the platform as if they were commuting, stopping to read a newspaper and chat on a pay phone. The collection mixed high fashion, Chanel signatures such as tweed skirt suits and an elevated version of New York kitsch. Among the leather jackets, cap-toe shoes and feathered gowns was an I ❤️NY T-shirt made of sequins, a knitted Superman-inspired sweater and a quilted handbag made to look like a squirrel.

The Métiers d’Art show was Blazy’s second runway for the brand. The annual collection celebrates Chanel’s group of couturiers and artisans who are responsible for feathers, goldsmithing, embroidery and more.

After the show, Blazy said that he appreciated the subway as an equalizer; he recalled once sitting next to someone dressed as Spider-Man.

Blazy, who previously spent three years as creative director of Kering-owned Bottega Veneta, said his collection offered a “cinematographic lens" on New York styles that are “slightly exaggerated." He said he’d worked with the métiers to experiment with new ways to weave Chanel’s iconic tweed suits, and that he’d played with basics, like making a denim-looking blouse out of silk.

“I was interested in American sportswear, and the idea of ease, stretch, moving," he said.

Pavlovsky said the brand wanted shoppers to find its ready-to-wear outfits more easily in stores, instead of its clothes separated from handbags and shoes.

“I don’t need to sell more bags," said Pavlovsky. “I’m not trying to push and to become a bag company. We are a fashion company."

The brand will be spending the next five years upgrading free-standing stores and department-store boutiques with this “full look approach," Pavlovsky said, with Chanel’s clothing better integrated with accessories and shoes.

Last year, amidst a global luxury slowdown, Chanel revenue declined 4.3%, with the privately held group making $18.7 billion in 2024, down from $19.7 billion in 2023. This year, Chanel is “back to single-digit growth," Pavlovsky said.

“If we compare our business to five years ago, we more than doubled our business," Pavlovsky said.

Chanel has hiked up prices in recent years, causing shoppers to gawk at accessories that cost as much as luxury rival Hermès. A medium-size classic flap bag now costs $11,300, up from $5,800 in 2019. The brand’s handbags have become coveted by customers who see purses from Chanel and rivals like Hermès as both a fashion statement and a potential investment. Pavlovsky said prices have not deterred its clients.

“The people who continue to buy Chanel and love Chanel feel comfortable with the level of prices," he said.

Pavlovsky defended Chanel’s price tags, noting they reflect the cost of craftsmanship, high quality and labor. “We have not increased our margin," he said. “The best of the best is expensive and not always accessible."

The U.S. is Chanel’s largest market, Pavlovsky said. The brand believes it’s important for Chanel to stay close to its top customers, who Pavlovsky said spend around $100,000 annually with the brand. Florida and California are key markets, he said.

Recently introduced handbags, such as the slouchy Chanel 25, has helped the brand find new customers, though Pavlovsky said Chanel was more interested in keeping its top shoppers happy.

Recruiting new clients, Pavlovsky said, “is not an obsession at Chanel."

Write to Chavie Lieber at Chavie.Lieber@WSJ.com