By
Bloomberg
Published
Jun 6, 2024
The billionaire family behind Chanel will have pocketed $12.4 billion in payouts from the luxury brand’s earnings over the past three years, contributing to a massive increase in their personal wealth and underpinning efforts to diversify away from high fashion.
The Wertheimers’ Cayman Islands-based holding company for Chanel is to receive a $5.7 billion dividend for 2023, the largest annual payout since the maker of expensive tweed ensembles and quilted flap bags began publishing results in London six years ago. This adds to the $1.7 billion for the previous year and $5 billion for 2021, according to filings.
The windfall contributed to a 19% rise in the clan’s net worth over the past year to $108 billion, and about a 26% increase since the 2021 dividend was paid, according to the Bloomberg Billionaires Index. The media-shy brothers Alain, 75, and Gerard, 72, are credited with owning equal shares in the closely held company, which they inherited as grandsons of one of the original business partners in Gabrielle “Coco” Chanel’s perfume operation.
The Wertheimers are among an ultra-wealthy group of French citizens whose luxury goods and cosmetics fortunes have ballooned in recent years as consumers splash out on expensive handbags and perfume. They include Bernard Arnault, founder of LVMH and the world’s richest person, L’Oreal SA heiress Francoise Bettencourt Meyers, who is the wealthiest woman, and the family behind handbag maker Hermes International SCA.
The most recent dividend proposed for the Wertheimers coincides with a softening of the luxury sector for some brands. Chanel is among the companies that have so far weathered the downturn in demand — revenues rose 16% last year to almost $20 billion. Chief Financial Officer Philippe Blondiaux said this year could mark “more significant investments in real estate.”
At the same time, the Wertheimers’ family office, Mousse Partners, has been using proceeds to invest in sectors outside of the industry. Last year, the firm headed by half-brother Charles Heilbronn was among a trio of France’s wealthiest dynasties to help take private Rothschild & Co. investment bank.
Mousse Partners has also invested in a wide range of startups including Brightside Health, digital advertising firm Brandtech Group, biotechnology company Evolved by Nature and health-care provider Thirty Madison, according to statements.
The Wertheimers reap benefits from the way their empire is structured geographically. Cayman Islands doesn’t impose taxes on dividends for local businesses while the UK, where Chanel is based, doesn’t typically levy withholding taxes on dividends paid from a British firm to another overseas.