The Gulf Time Newspaper One of the finest business newspapers in the UAE brought to you by our professional writers and editors.
Bloomberg
Chanel Ltd., known for No. 5 perfume, little black dresses and financial secrecy, opened its books for the first time to reveal almost $10 billion in sales last year — a level that rivals luxury leader Louis Vuitton.
It also reveals a vastly larger fortune for the two brothers that own the luxury giant than prior estimates. Alain and Gerard Wertheimer each have about $23 billion based on
the results, about $8.7 billion more than previously calculated by the Bloomberg Billionaires Index.
That makes them the fourth- and fifth-richest people in France and among the
40 wealthiest on the planet.
The closely held French fashion house said it disclosed the numbers partly to repel rumours it could be taken over. Chanel recorded net profit of $1.8 billion last year on revenue of $9.6 billion. Sales rose 11 percent on a constant-currency basis as the industry benefited from Asian demand.
“Our financial strength gives us the means to remain independent and to focus on the long term,†Chief Financial Officer Philippe Blondiaux said.
A Chanel spokesman said the company had no immediate comment on the brothers’ net worth.
The billionaires’ grandfather purchased a majority stake in the business from Gabrielle “Coco†Chanel in the 1920s. She founded her namesake brand in 1910 and revolutionised fashion with a sporty and chic silhouette that put a swift end to the corsets and frills of the
Belle Epoque. Lagerfeld is now 84 years old, and the company has disclosed no plans for
his succession.
“We’re a very discreet family, we never talk,†Gerard was quoted as saying in an article in the New York Times in 2002. “It’s about Coco Chanel. It’s about Karl. It’s about everyone who works and creates at Chanel. It’s not about the Wertheimers.â€
Chanel’s financial disclosure fuels a race for bragging rights among the fashion industry’s biggest brands, after Kering SA’s Gucci said it aims to lift revenue to $11.6 billion from 6.2 billion last year.
While Gucci is growing more rapidly, Chanel has relied on the strength of its cosmetics
division even as its main rivals focussed more on fashion and handbags.