Chanel Profit Falls as Luxury Downturn Hits Sales (Correct)

Chanel Ltd. profit plunged last year as the closely held company splurged on expanding its retail network and marketing to remain visible amid a luxury industry downturn.

Operating profit slid 30% to $4.48 billion as revenue fell 4.3% on a comparable basis, it said in a statement Tuesday. The region that includes China — which generates about half of Chanel’s revenue — saw a 7.1% sales fall.

The slump came as the luxury market struggles to emerge from a period of sluggish growth caused in part by Chinese shoppers reining in costly purchases. The industry’s outlook has grown even gloomier ...