The crumbling theater in which Karl Lagerfeld staged Chanel's Couture show for Fall 2013 was a convincing evocation of a culture in ruins, bar the backdrop, which featured a perfectly airbrushed vision of a sci-fi skyline, a city of the future. That backdrop came to life tonight when Lagerfeld presented Chanel's Cruise collection in Dubai, where brushed steel towers poke at the sky in shapes that are plucked from the dreams of feverish futurologists. It's been a decade or so since the designer was last here and he scarcely recognized the place. You can only imagine how much that excited a man who regards yesterday as complete anathema. "The next step, the new reality," he declaimed enthusiastically of Dubai. "This is something totally unexpected. You couldn't imagine it fifty years ago."

So it was slightly odd that the clothes Lagerfeld showed left the impression of something you might actually imagine a hundred years ago, when Paul Poiret's injection of Eastern exoticism freed fashionable Parisians from the restrictions of the 19th century. "Better to do that than the sixties, the seventies, what everyone else does," said Lagerfeld, with nary a hint of defensiveness. "This is my idea of a romantic, modern Orient, a new One Thousand and One Nights." And there was no place more appropriate to offer it up than Dubai, where West and East, today and tomorrow, real and fake meet in a duty-free, shopaholic embrace. Chanel encapsulated the notion with its show space, a gigantic rectangular hangar covered in a lattice that looked on first glance like the kind of traditional Islamic fretwork that wraps the Institut du Monde Arabe in Paris. It was actually Chanel's interlocking double C's.

Real and fake? That was the essence of the show, most obviously in the way precious and costume jewelry were mixed to confusing effect, but also in the shifting sense of time and place. Fin-de-siècle silhouettes, huge jet-set hair, Aladdin's slippers: Everything underscored the strange and wonderful hybrid that Lagerfeld has made of Chanel, from the venue—the seemingly solid hangar was an ephemeral fantasia whipped up on a strip of sand—to the post-show entertainment, a hyperkinetic performance by the exultantly ambiguous Janelle Monáe. Perfect! Ambiguity offers Lagerfeld the nothing-is-quite-what-it-seems effect that he craves. Here, it was evident in the fabric treatments that defied immediate comprehension: clusters of beading, three-dimensional geometries, decaying tweeds and patchworks.

Before his arrival, a flurry of newspaper articles trumpeted the re-ascendance of Dubai as a market hungry for prestige European labels. It was a temptation to track concessions to that market in this new Chanel collection. Lagerfeld toyed with the local design lingo in his use of gilding, fretwork, and the sickle-moon motif—plus an unfortunate outbreak of harem pants. There were also tunic tops hemmed in a sequined version of the Dubai skyline. But he didn't see concession. "The world is not that big anymore," he said dismissively. "You don't have to be from here. These clothes are for women all over the world." Still, it was telling that the clothes that exerted the most appeal were the most generically international. The plainest, in other words. Joan Smalls in layers of sand-colored crepe had a timelessly glamorous zing. Valley of the Dolls met Valley of the Kings.