At one house I owned I took the cornice down, replaced w/ rods, and used the wooden cornice for a boarder, but the fabric and batting can look very good!
I see there's a light fixture behind the cornice, so it would look worse if you remove the cornice. Get one of those stick-on motivational quotes from Wally-World -- Live, Laugh, Love -- and put that on the cornice. Get a little topper that matches your kitchen decor and just put up to cover a third of the window top. Then cut a board wider than the existing window sill and attach with screws. Get some pretty planters and add some flowers for a garden window.
I have used that cling film that resembles a stained glass window, I think that would look good there, and then you could paint the cornice to match the design you chose. It is fairly inexpensive at lest to me, because I know what actual stained glass goes for. Hope this helps.
Leave the cornice up use a tension road and hang a swag curtain even with the window not the cornice.You can still have the shade behind the curtain to block out sun if need be .Maybe paint something on the cornice and a little something on each door to the cabinets in corner by the knobs of the same thing smaller .It can be anything that goes with the theme of your kitchen . Birds and Bird houses are big now and it could be a branch with a bird on the doors and a bird house on the cornice with branches and some birds.Its what ever you like and remember your the one looking at it every day so make it something you will enjoy seeing all the time.
I'd leave it up and either give it any of the above ideas. Whether you want that to be the center of attention with a dash of color (material covered or logo), it will be an eye catcher. If you'd care to spice the cabinets with a dab of charm by changing the handles that could also do the trick. Maybe try the little curtain 1st to see how that all looks before the hassle of covering or mural? Best of luck for you're cover.
In my previous house, I had the same look. I put a glass shelf between the cabinets. I used 1/4" glass. I then put my African violets on it. No curtains, just the shelf. Made a big difference.
I would stencil the cornice and I would take the stencil pattern into the kitchen in other areas. I had this cornice and I stenciled long Ivy with vines. Then I took only the ivy and added them to my white square tiles in random areas. In 20 years the paint never came off even above the stove if it were I would just add clear nail polish over the stencil area only and if you make a mistake scrap it off! I see you have painted cabinets you could put the some of the stencil on the cabinet too. Or on the back of your kitchen chairs. Stencil is coming back as is wallpaper!
If you are looking for an update, I would take the cornice down. Replace the fluorescent light with a nice pendant light and hang a coordinating fabric roman shade on the window.
If you planning to update a little, the best way is to take down that wood cornice that’s dated and add a Roman pleated shade but be sure the paint the aluminum window frame. They have small can at hardware store in many colors. Add new handl pulls
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