Founded in 1910, the small shop selling ladies headwear had moved to the upmarket Rue Cambon within a year. The house became especially famous with the elegant little black dress, tweed suit, and its signature No. 5 fragrance, which debuted in 1921. The fragrance is supposedly name after her lucky number (or because she picked the fifth sample by the perfumeur, Ernest Beaux? There are simply too many stories surrounding the myth of this fragrance.[citation needed]) Ernext Beaux later went on to create many other perfumes for Chanel, including No. 22 (1922), Cuir de Russie (1925), and Gardenia (1925), and Bois des Isles (1926), all of which were reintroduced as boutique exclusives around 1986.

Chanel revolutionized haute couture fashion by completely replacing the traditional corset with the comfort and casual elegance of simple suits and dresses. (Although fashion historians have sufficient evidence to believe that Paul Poiret, Coco Chanel's early rival, was probably the first designer to do so. She introduced to the world her signature cardigan jacket in 1925 and signature “little black dress” in 1926, introducing a more sultry and seductive definition to “sexy.” She had numerous other major successes that changed the fashion industry including the ever popular "'Chanel suit'", an elegant creation composed of a knee-length skirt and trim, boxy jacket, traditionally made of wooven wool with black sewing trim and gold buttons, worn with large costume-pearl necklaces. Elite women of high societies around the world began to flock to the now legendary Rue Cambon boutique to commission couture outfits from her. The House of Chanel became an icon of elegance and from then on, the name “Chanel” became synonymous to elegance, wealth, and elitism, as well as the ultimate sign of French high class, la coquettrie.

After No. 5, Coco Chanel's fashions became even more well-known and were purchased by the high flyers of London and Paris society alike. Chanel took to living at the Hôtel Ritz Paris, and her suite of residence has become famous and is now named the "Coco Chanel Suite."

Chanel is also known for its quilted fabric which also has a "secret" quilting pattern sewn at the back to keep the material strong. This material is used for clothing and accessories alike. During the early 1970s London socialite millionairess Diane Boulting-Casserley Vandelli was ambassador to the brand, making it ever more popular amongst the European jet-set and upper classes. The brand is now headed by German-born designer Karl Lagerfeld, who had previously designed for the House of Fendi, where his most memorable achievement was the creation of the signature "FF" logo print (referred to as Zucca) commonly used on handbags.

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