The Hidden Chanel Family: A Luxury Empire Revived From the Ashes
When Coco Chanel established her distinguished fashion house, little did she know that the empire she would build would become a family affair.
Alain and Gérard Wertheimer, 75 and 72, respectively, are two of the five richest billionaires in France. Their wealth has increased many times through huge acquisitions and businesses, of which Chanel is just one of them. Currently, the illustrious brothers together are worth a combined total of $63.3 billion as of 2023, according to Forbes.
The Wertheimer family keeps very quiet and rarely speaks to the press about wealth, company, family life, relationships, or even hobbies. They've never even attended the opening of a Chanel store, and if they attend the brand's fashion events, they drive their own cars and sit in rows four or five. In 2002, Gérard told New York Times reporter Dana Thomas, "We're a very discreet family."
Rising from the Ashes
Following Coco Chanel's death in 1971, Chanel as a brand was on the decline. In 1974, Alain and Gérard took over as co-owners of the Chanel brand after their father, Jacques Wertheimer, died.
Using his business acumen, Alain began the fashion house's return to its former glory by expanding the ready-to-wear segment and re-establishing market share to lead the luxury perfume sector. By scaling back the number of vendors selling Chanel No. 5 to only luxury retailers and increasing his investment in the brand's beauty sector, he created a scarcity that revived consumer interest and improved sales.
He also recognized the advantage of using endorsements from celebrities like Marilyn Monroe and Audrey Tautou to improve the fragrance's appeal.
But perhaps Alain's most important and profitable change was persuading German designer Karl Lagerfeld to become creative director. At the time Lagerfeld joined Chanel, he said: "When I joined Chanel, it was a 'sleeping beauty in the woods.' Not even a pretty person. It is exhausting. So it is my job to bring a dead woman to life."
Alain, who has been called a "marketing genius," knew how to make the most of Lagerfeld's creations to create a high fashion image, popularizing the Chanel brand not only within elite circles but also to the rest of the world.
Chanel's long list of celebrity clients includes Kristen Stewart, Nicole Kidman, Gisele Bündchen, Lily-Rose Depp, Cindy Bruna, Romy Schonberger, Rianne van Rompaey, Sigrid Agren, Whitney Peak, and more. The combination of celebrity and exclusive luxury has made Chanel a "giant" in the fashion industry with countless shops and boutiques around the world.
Strategic Vision
Never discounting and not selling on social networks, regardless of competitors, are the principles that Chanel always follows to keep itself separate from other fashion brands in the capital market.
The House is famous for its simple yet sophisticated, classic, and modern style combines products inspired by the past and its bold brand identity such as tweed with fine details like tied bows and chains. This instills the brand's motto: "Fashion can fade, but style is forever." Chanel does not create products according to the latest trends but always has unity in style, spirit, and quality, allowing customers to recognize them without seeing the logo.
To maintain brand value, Alain and Lagerfeld both focused on exclusive products and devised a different marketing strategy from other brands, from price to promotion.
First, Chanel never cuts prices. If other high-end fashion brands all launch seasonal discount campaigns to attract customers, Chanel only adjusts prices according to the market but does not change the basic price. This is how Chanel makes a difference in the luxury industry.
To increase sales, Chanel developed more affordable lines like skincare, makeup, eyeglasses, and even watches at lower prices have helped Chanel almost control the market.
Second, Chanel does not do much business on social networks. In recent years, the company has spent over €1 billion expanding in other countries and pouring money into online advertising campaigns. However, Chanel does not see online business as a sales channel, especially for high-end fashion products, jewelry, accessories, cosmetics, or watches. According to Alain, Chanel wants to minimize the phenomenon of counterfeit and fake products and protect the brand's value.
Instead, Facebook, Instagram, and Twitter accounts are only used to provide the latest information, fashion events, or newly launched collections to increase brand awareness. Then, customers will come directly to the store for advice, where Chanel has carefully invested in the care team to bring the best experience to customers.
As of 2023, Chanel is one of the leading luxury fashion brands in the world with a brand value of $19.4 billion. Currently, the Wertheimer brothers not only co-own Chanel but also a series of famous vineyards throughout Europe, such as the vineyards in Bordeaux, the Napa Valley, and Domaine de l'Île located on the island of Porquerolles near the southernmost tip of Côte d'Azur, France.
Today, Alain is the chairman of Chanel, while Gérard heads the watch division. They are the third generation to run the 110-year-old company.
